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Nigerian Naira Slides to N360 a Dollar

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NAIRA

The Nigerian Naira plunged to N360 against the US dollar at the parallel market on Wednesday, following a supply shortage of the greenback in the interbank market.

The local currency was traded at N354 against the US dollar on Tuesday, before supply gap in the interbank market widens the difference between the parallel market and interbank rates.

Foreign exchange dealers attributed the development to inadequate liquidity in the forex market.

While currency analysts have said until the Central Bank of Nigeria address the current shortage and devise a better solution to liquidity issue at the interbank level, this will continue.

“This is a liquidity problem, any shortage or additional supply of the greenback will definitely impact the Naira,” said Samed Olukoya, a foreign exchange analyst at Investors King Ltd. “Once addressed, the forex market should return to normalcy.”

The central bank has used intermittent intervention to prop up the Naira exchange rate at the interbank level, but with crude oil prices below $50 a barrel and militant resumed attack that has reduced production by 600,000 barrels a day. It is not clear how the Central Bank of Nigeria plan to sustain the forex market or contain parallel market from reaching N400 a dollar this year.

Currency experts had earlier predicted that the abandonment of Naira’s fix rate would attract foreign investors to offset the anticipated forex deficit, but the global uncertainties caused by the exit of the U.K from the European Union continue to cast doubt on that assumption.

“Nothing much is really happening on the supply side of the market. Liquidity issue is still there. We actually felt that foreign investors should have been coming in by now,” said Kunle Ezun, a currency analyst at Ecobank Nigeria.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Banking Sector

Bank Directors Advocate for Improved Corporate Governance In The Sector

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Bank Directors of Nigeria Association

The President, Bank Directors Association of Nigeria, Mrs Osaretin Demuren, has called on bank directors to enhance their corporate governance practices to ensure stability and accountability in the banking sector.

She said this during BDAN’s 24th annual general meeting in Lagos on Wednesday.

According to her, it is important to ensure that the appointment of directors is properly approved and that only qualified candidates are appointed.

“Corporate governance should be entrenched in bank directors. Even when recruiting directors, you have to find out on what basis, and not everyone is corporate governance-compliant,” she said.

She added, “We have gone beyond banking where banks should be owned by individuals. Once that is out of the way, then corporate governance can be entrenched.

“But when you have an individual, whether directly or indirectly behind, then it is now left to the regulator or the nation to call that person to order.”

The BDAN president, who was set to step down, had her tenure extended by the council and members by another 90 days pending an election and appointment of a new president.

In her opening remarks, she said, “I took over as the president of BDAN in October 2018, at the 21st annual general meeting.

“Since assuming office, I can confidently say that with the support of my colleagues, we have been able to deliver on the mandate of the association by increasing members’ participation, increase in revenue as evident in our financial statements and improved quality of our programmes.

”There is still more to be done notwithstanding especially with regards to advocacy with the regulators. I am sure whoever takes over as president will further deliver on our aspirations.

“I am therefore informing this meeting that this is the last meeting I will be acting in the capacity as president as my tenure as the chairman of Guaranty Trust Bank has come to an end and we are in a transition period.

“In view of this, we will also have a transition period where I will be speaking with my colleagues chairmen of banks on who will be my successor.”

She assured that members would be carried along throughout the process.

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Banking Sector

Grobank Renamed As Access Bank South Africa After Acquisition

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Access Bank

Following the completion of all regulatory procedures, Grobank Limited has been officially renamed Access Bank South Africa Limited.

A statement titled ‘Grobank formally becomes Access Bank South Africa’ said the deal was finalised after Access Bank’s acquisition of controlling shares in the former Grobank Limited, South Africa.

“With this new development, Access Bank South Africa Limited is positioned to deliver a robust banking operation that connects key African markets,” Access Bank said on Wednesday.

According to the statement, at an official closing ceremony in Sandton on Monday, top executives of the two banks were upbeat about new opportunities for clients, noting that the bank would continue to support all its stakeholders while opening doors to growth opportunities both in the short and long term.

The Chief Executive Officer, Grobank, Bennie Rooy, said, “This is an extremely exciting day for the South African banking industry.

“Our corporate customers will now have increased access to trade finance, treasury, international payments and loans through the wider distribution network offered by Access Bank’s presence in the key trade corridors that connect Africa to the rest of the world.”

Banking with Access Bank South Africa, he added, meant greater security as well as access to more products and services through a best-in-class digital platform, and a full retail banking suite will soon be on offer.

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Banking Sector

Zenith Bank Sustains Profitability in Q1 2021

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Zenith Bank

Zenith Bank Plc, Nigeria’s most profitable lender, reported another strong profit after tax of N53.060 billion in the first quarter (Q1) of 2021.

In the unaudited financial statement obtained by Investors King, the amount was higher than the N50.5 billion achieved in the first quarter of 2020.

Gross earnings moderated from N166.814 billion in Q1 2020 to N157.309 billion in Q1 2021.

Interest and similar income also declined from N114.330 billion in Q1 2020 to N114.330 billion in Q1 2021. While the bank cut down on interest and similar expenses from N32.829 billion recorded in the first quarter of 2020 to N18.008 billion.

Net interest income stood at N83.168 billion, up from N81.501 billion achieved in Q1 2020.

Profit before tax expanded from N58.788 billion in Q1 2020 to N61.022 billion in Q1 2021.

The lender paid N7.962 billion in income tax in the first quarter of 2020, while profit after income tax deduction stood at N53.060 billion.

Zenith Bank gained N5.698 billion from foreign currency translation differences and another N1.387 billion from fair value movements on equity instruments to bring other comprehensive income for the quarter to N6.065 billion.

Therefore, total comprehensive income for the quarter stood at N59.125 billion.

Going forward in 2021, Zenith Bank said the ongoing economic recovery and improvements would translate into improved financial performance.

This is expected to be supported by local and international COVID-19 vaccination campaigns, rising commodity prices, and global economic growth of up to six per cent, as estimated by the International Monetary Fund (IMF).

“The Group will continue to position itself to take advantage of positive developments in the domestic and global economy to deliver improved financial performance and returns to all its stakeholders,” Zenith Bank noted.

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