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CBN Conducts Special Examination on Banks

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CBN-headquarters-Investors King

In order to ascertain the actual well-being of banks owing to the nation’s macroeconomic challenges and rising non-performing loans (NPLs), the Central Bank of Nigeria (CBN) is currently carrying out examination on banks.

At the end of the exercise, the banking sector regulator said, it would determine how best the industry should be supported.

The Director, Banking Supervision, CBN, Mrs. Tokunbo Martins, disclosed this in response to enquiries.

Banking sector NPLs have been predicted to jump to 12.5 per cent of the total loans of the banks this year, up from the central bank’s target level of five per cent at the end of last year, according to Agusto & Co, Nigeria’s main rating agency.
This is even worsened by the weakening consumer confidence and slide in the country’s Gross Domestic Product (GDP).

In view of the current macro-economic challenges in the country, the CBN last week announced that it had granted a one-off forbearance to banks this year to write-off their fully provided NPLs without waiting for the mandatory one year.

The CBN had explained that it acknowledged the request by banks to amend the requirements of Section.3.21 (a) of the Prudential Guidelines, which mandates banks to retain in their records, fully provided NPLs for a period of one year before they are written off.

“The CBN has no intention of repealing the provision of the above mentioned section of the guidelines. In view of the current macro-economic challenges, however, the CBN hereby grants a one-off forbearance this year 2016 to banks, to write-off fully provided for NPLs without waiting for the mandatory one year,” Martins stated in the circular addressed to all banks.

In a related development, in view of what it described as the abuse of access to its Standing Lending Facility (SLF) by banks and other authorised dealers, the CBN has also directed all authorised dealers to refrain from accessing the discount window on the settlement date for government securities’ auctions.

The securities referred to are CBN bills, Nigerian Treasury Bills and Federal Government of Nigeria bonds. It stressed that any violation of the directive would result in the denial of access to the SLF.

Responding to question on the need to conduct special examination on the banks to mitigate systemic risk in the industry, Martins stated: “I totally agree. We are currently carrying out examinations in that regard and also conducting stress test. At the end of it, we will determine how best the industry should be supported.”

Meanwhile, as the tenure of the Chief Executive Officer of the National Bureau of Statistics (NBS), Mr. Yemi Kale, ends today, financial market analysts have commended his contribution to the transformation of the country’s data system since his appointment in 2011.

The NBS has since 2011 grown as a reliable statistics body whose data have continued to be relied on nationally and internationally for effective planning.

Speaking on the achievement of the NBS boss since his appointment, Head of Research, SCM Capital Limited, Mr. Sewa Wusu, told THISDAY: “Kale has done significantly well. In terms of statistics on the Nigerian economy, such as inflation, GDP, and others that have really helped the economy in terms of planning and understanding the level at which the economy is performing, he has done very well.

“Today, we have series of data on the macro economy and that has helped in policy formulation and planning. Before Kale came, we didn’t have the robustness of most of the reports we are seeing now. To a large extent, the NBS has been living up to its expectation under Kale. That is what you enjoy when you have a round peg in a round hole. They know what to do at every point in time.

“More can still be done and he can still do more, that is why I am advising that his tenure be renewed. Lots of foreign investments banking firms now do proper analysis on the Nigerian economy because of the structured NBS data release timetable,” he stated.

One of Kale’s greatest achievements was seeing through the rebasing of Nigeria’s GDP which, in 2014 saw Nigeria emerge as the largest economy in Africa, a position, which it lost to South Africa recently. Among several other achievements including the unveiling of the Enhanced General Data Dissemination System (e-GDDS), which would help Nigeria attract the much needed Foreign Direct Investments (FDIs) into the country.

The e-GDDS is the data standards initiatives by the International Monetary Fund (IMF) which aims at enhancing member countries’ data transparency and promoting development of sound statistical systems. The page particularly serves as a one-stop publication vehicle for essential macroeconomic data.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Finance

World Bank Rates Nigeria Low on Infrastructure

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Despite the huge borrowing, the World Bank has rated Nigeria low on infrastructure. While asserting that the country’s infrastructural deficit would likely reach $3 trillion in the next 30 years, the bank noted that Nigeria’s development index is among the lowest in the world. 

According to the public finance review report prepared by the world bank, Nigeria was ranked 132 out of 137 countries on infrastructure. Going by the current rate of expenditure allocation for infrastructure, the Washington Based bank noted that “it would take 300 years to close the country’s current infrastructure gap”.

“Closing Nigeria’s infrastructure gap would cost at least four percent of GDP growth per year.” the report added. 

Investors King understands that infrastructure deficit and lack of basic amenities are some prevailing problems facing the country. These problems among others have created a negative impact on the economy. 

In November 2022, the Chartered Institute of Bankers of Nigeria (CIBN) also noted that the lack of key infrastructure development has impeded the country’s growth potential over the years.

The CIBN’s chairman, Ken Opara stated that  “Over the years, the public infrastructure deficit in Nigeria has become an issue of major concern. Generally, infrastructure is the foundation on which economic activities thrive. According to the Africa Infrastructure Country Diagnostic Report released in 2011 titled “Nigeria Infrastructure: A Continental Perspective”, about 40 percent of the productivity are caused by infrastructure constraints”. 

Similarly, the Vice President, Prof. Yemi Osinbajo while seeking the collaboration of the private sector disclosed that Nigeria will need $2.3 trillion to bridge the country’s infrastructural deficit. 

Osinbajo who spoke in August 2022 during the inauguration of the National Council on Infrastructure stated that only an effective collaboration with the private sector and key development stakeholders can help to beat the gap. 

The Vice President thereafter used the event to highlight some of the infrastructural achievements of the present administration which include the second Niger bridge, the Lagos-Ibadan expressway, and the Abuja-Kaduna-Kano Road. 

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Finance

Access Bank Unveils New Debit Card For Women

Access Bank created a new type of card for women in business

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Access bank

One of the leading commercial banks in Nigeria, Access Bank has unveiled a new debit card specifically designed for women entrepreneurs to celebrate their uniqueness and speciality.

The unveiling took place at the Grand Finale of  “W’’ Initiative’s Womenpreneur Season 4 in Lagos yesterday, Investors King learnt.

Speaking at the sideline of the event, Access Bank Chairman, Dr. Ajoritsedere Awosika noted that the new debit card is an innovation to identify with women particularly, women entrepreneurs. 

“Everyone globally likes to have an identity. Not just an ordinary identity but an identity that makes you unique and gives you an opportunity to spend in a unique way and have an assurance that you are recognised,” she noted. 

“With the WCard, a card meant for women , women of integrity, women who can go out there and stand on their own in the business world and for women who are able to walk in the lanes of integrity like access bank believes.’’ she added.

While introducing the W Branded Debit Card, Access Bank Head of Marketing and Communication, Chioma Afe stated that a survey was conducted to identify his women want to be differentiated. This survey was what led to the new debit card purposefully designed for women. 

Chioma further noted that Access Bank values its female customers and a dedicated card is the least the bank can do to identify with them. 

“At Access bank, we already had unique offerings for our female customers, so why not a debit card? when you hold it, it is not just Access, it says you are female, you are strong, you are impactful, you are innovative and you are inspiring and inspirational,” she stated.

Speaking at the event “W” Initiative and  Womenpreneur Pitch-a-Ton, the Managing Director of Access Bank, Roosevelt Ogbonna noted that the pitch programme which is now in its Season 4 has recorded tremendous success since its inception. 

According to Roosevelt, the programme “(is) a vision to support women-owned businesses to catalyse growth for the economy and make Nigeria a better place”. 

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Finance

Finance Minister Accused Budget Office of Padding

The budget office added N206 billion to the budget of Ministry of Defence, Ministry of Humanitarian Affairs and the Nigerian and the National University of Commission (NUC)

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Zainab Ahmed Finance Minister

The Budget Office of the Federation (BOF) has been alleged of being behind the recent budget padding totalling about N206 billion.

The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed disclosed in a statement issued by the ministry.

Investors King had earlier reported that some ministries and government agencies including the Ministry of Defence, Ministry of Humanitarian Affairs and the Nigerian and the National University of Commission (NUC) had raised alarm about padding in their respective budget proposal. 

Reacting to the development, the Minister of Humanitarian Affairs and Disaster Management wrote a letter to the Ministry of Finance, seeking clarification. 

Therefore, when appeared before the House Committee on Appropriations, the Minister of Finance noted that the error emanated from the Budget Office of the Federation. 

According to the statement released by the Ministry of Finance, the Minister told the legislators that “there was an error in the budget of the Ministry of Humanitarian Affairs as the N206 billion captured in the budget proposal of the ministry was wrongly coded by the Budget Office”.

She added that “the N206 billion alleged insertion, which had generated serious reaction within the week, was for the national social safety nets project funded by the World Bank and domiciled in the Humanitarian Ministry,” the statement read.

Zainab further clarified that the figure in question was not a deliberate act of budget passing but an oversight. 

“The wrong coding resulted in the item being wrongly captured as ‘purchase of security equipment but that it had nothing to do with Budget padding, but an oversight,” she said. 

Meanwhile, the House of Committee has berated the Minister of Humanitarian Affairs for her failure to appear before various committees of the House to defend the ministry’s 2023 budget proposal.

The committee thereafter advised her to resign if she was not capable to do her job. 

“Most times the committee calls the minister, she refuses to come. If she is not ready for the job, she should quit,” the committee chairman stated. 

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