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Banks to Close Branches as Recession Bites Hard

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Recession bites

A number of Deposit Money Banks in the country will close many of what they described as unprofitable branches as the economic recession continues to bite harder, investigation by our correspondent has shown.

It was similarly gathered that most of the banks would lay off hundreds of workers between now and December.

The revelation came barely 24 hours after Unity Bank Plc laid off about 300 workers, more than the 220 that was mentioned last week.

Diamond Bank Plc, Ecobank and Skye Bank Plc had earlier in the year sacked over 3,000 members of their workforce.

It was learnt that following the economic downturn in the country, a number of bank branches could no longer justify their existence as cost analysis had shown that the financial institutions were spending more on salaries and overheads than the income from the branches.

Some top bank executives, who confirmed the development to our correspondent under the condition of anonymity on Monday, said some lenders might be forced to relieve more workers of their duties before the end of this year.

An executive director in one of the banks that recently asked some of its workers to go said, “We have laid off some of our staff members but that it still not enough. Many branches are just existing for the sake of being there. They are not generating enough income. What they are bringing in is far less than what the bank is incurring as costs on them.

“We may have to close such branches before the year ends. I know a number of other banks that are planning something similar.”

Commenting on the development, an ex-banker and Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, described branch closure as an ongoing action in the banking sector, especially in times of economic downturn.

He, however, noted that banks were required to notify the Central Bank of Nigeria before closing any branch.

“It is an ongoing administrative thing in the banking industry. Banks will want to rationalise branches, especially in a difficult economy. Banks are planning to cut costs. Branch rationalisation is normal but the CBN has to be notified,” Chukwu explained.

The banking sector has been facing a number of challenges following the downturn in economic activities.

The slowdown in the economy, which has led to a high rate of non-performing loans in the banking system, made four lenders to lose at least N17bn in profits in the first quarter of this year.

Specifically, Ecobank Transnational Incorporated, Guaranty Trust Bank Plc, Unity Bank Plc and Diamond Bank Plc recorded a combined decline of N17bn in their profits before tax for the three months ended March 31, 2016, when compared with the corresponding period of 2015, according to the results of the financial institutions posted on the website of the Nigerian Stock Exchange.

When compared with the PBT of N30.52bn, N32.65bn, N4.26bn and N7.94bn recorded by the banks in the first quarter of 2015, the combined PBT of the four banks dropped by N17bn from N75.4bn in the first quarter of last year to N58.4bn in the same period of this year.

While Ecobank’s PBT fell from N30.52bn in the first quarter of 2015 to N20.63bn in a similar period of this year, GTBank’s dropped from N32.65bn to N30.68bn. That of Unity Bank dropped from N4.26bn to N1.05bn, while Diamond Bank’s came down from N7.94bn to N6.04bn.

In terms of their profit after tax, the four banks recorded a decline of N14bn.

Banks in the country had been posting sharp increases in profits before tax and profits after tax since 2011 after the establishment of the Asset Management of Corporation of Nigeria in 2010 following the banking sector crisis in 2009.

However, consistent drop in the global prices of crude oil, Nigeria’s main foreign exchange earner, since June 2014, caused banks’ profits to start declining at the end of 2015.

Majority of the 15 banks listed on the NSE recorded declines in their full-year profits in the 2015 financial year. However, a few ones such as Access Bank Plc, Zenith Bank Plc, United Bank for Africa Plc and GTBank outperformed the market despite sizeable volume of bad loans.

In the first quarter of 2016, 13 out of the 15 banks posted a combined PBT of N135.36bn, compared to N148bn in the corresponding period of last year.

Similarly, the 13 banks posted profits after tax of N116.6bn in the first quarter of 2016, compared to N126.4bn in the first quarter of 2015.

The 13 banks are Access Bank Plc, Diamond Bank Plc, Ecobank Transnational Incorporated, First Bank of Nigeria Limited, GTBank, FCMB Limited, Sterling Bank Plc, Fidelity Bank Plc, UBA Plc, Unity Bank, Wema Bank Plc, Union Bank Plc and Zenith Bank Plc.

Skye Bank Plc and Stanbic IBTC Bank have yet to release their full-year 2015 and first-quarter 2016 financial results.

An economic analyst and Head, Investment Advisory, Afrinvest West Africa Limited, Mr. Ayodeji Ebo, said the declining profit in the financial services sector was a reflection of the challenges facing the Nigerian economy.

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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FG Starts Registration, Categorization For Nigerian Fish Farmers

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The Federal Government of Nigeria, in its bid to solve the food crisis in the country, has kick-started the registration and categorization of all fish farms across the country. This move is also aimed at fighting the country’s economic challenges and encouraging export, inspection, data collection and record-keeping.

Investors King gathered that the Federal Department of Fisheries & Aquaculture, alongside states of the federation will commence the operation in the coming weeks. 

This development was disclosed at the end of a capacity-building training for fisheries officers and stakeholders involved in fish farming, processing and export recently.

During the training which was organized by the Norwegian Seafood Council (NSC), participants urged the Federal Department of Fishery to hasten the completion and perfection of the Aquaculture Residue Monitoring Plan for approval, in order to enable the export of farmed fish into the European Union and other countries.

In the same vein, the Norwegian Customs has said that Nigerians can now export fish to Norway without duties. However, the products must be of standard quality. 

“Exporters of Nigerian farmed fishes can only enjoy the zero duty rate the moment the ban on such fishes is lifted by the European Union”, the Customs said. 

Meanwhile, the Central Bank Nigeria (CBN) has expressed concerns over the absence of off-takers for fishery farmers in Nigeria. The bank said the situation is affecting the Bank’s ability to intervene in the aquaculture Anchor Borrowers’ initiative.

At the training, an official of the Development Finance Department, CBN, Mr. Samson Alatise said that the CBN is set to support the growth of the fishery sector in Nigeria “if there are the willing anchors that will take up the farmed fishes from the farmers.”

Alatise stated that there is a committee set up by the federal government to checkmate the activities of the sector in the absence of an undertaker. He also said that the “development is limiting the Bank’s participation in funding the aquaculture of ‘Cat’ and ‘Tilapia’ fishes. 

‘‘We are keen on funding aquaculture; the issue is that there is no viable anchor and this has limited the CBN’s participation in terms of growing the fishery sector.

“The CBN wants to see how it can be assisted to overcome the issue of non-availability of anchor,” Alatise added. 

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Walmart, Amazon, Apple, Others Top 2022 Fortune 500 List

Walmart took the top spot for the tenth year in a row, generating $5.1 trillion cumulative revenue over that time

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fortune 500

Fortune Magazine has released the 68th edition of their annual list of the top 500 US companies with Walmart, Amazon, and Apple topping the list.

Fortune 500 list is an annual list of the top 500 largest companies in the United States, ranked based on the total revenue each of the companies generated in their respective fiscal years. It is compiled by Fortune Magazine.

A check by Investors King shows 2022 top 500 largest companies in the United States earned a combined $16.1 trillion in revenue and realised $1.8 trillion in profits. Indicating that the 2021 revenue grew by $6.4 billion, or 19% when compared to 2021 numbers.

Breaking down this year’s list, Walmart took the top spot for the tenth year in a row, generating $5.1 trillion cumulative revenue over that time.  Amazon.com came second with a 22% increase in revenue in 2021 to cross the $450 billion threshold.

Apple, perhaps the most profitable company on the list for the eighth time in eight years, generated profits of $95 billion to sit in the number three position.

CVS Health and CEO Karen Lynch strive to produce Fortune 500 history as the highest-ranking firm ever led by a female CEO, at number 4.

UnitedHealth Group maintained its position as USA’s largest health insurance provider, with considerable growth in 2021. The corporation served 2.2 million more individuals this year than the previous year, and revenue increased by 12% to $287 billion, making it claim the 5th spot.

Exxon Mobil has risen from 10th to 6th place on the Fortune 500 after a difficult, pandemic-affected 2020. After COVID-related limitations drove energy consumption and oil and gas prices to plunge, Exxon Mobil trimmed costs to shore up its balance sheet, laying off 9,000 employees. These measures, combined with a resurgence in oil prices, let the business earn more than $23 billion in 2021, its highest annual profit in seven years.

Warren Buffet’s Berkshire Hathaway generated the second-largest profits among Fortune 500 firms last year, with $90 billion in net income. Its stock also soared, returning 23.2 percent in 2021, putting it in the 7th position.

Alphabet had a spectacular record, reaching $200 billion in sales for the first time. Alphabet was the best-performing Big Tech stock in 2021, with shares up nearly three times the Nasdaq’s 22 percent gain. It also put aside $50 billion for share repurchases and announced a 20-to-1 stock split to stimulate more investment. With steady growth in revenue and profit from 2006, Alphabet took the 8th spot.

Mckesson, one of the largest drug distributors in the country ranked 9th with a clear revenue of $238,228 million in the 2021 fiscal year despite a $4.5 billion loss.

Despite a fall in this year’s ranking, AmerisourceBergen increased its revenue by 12.7%, to $214 billion for the 2021 fiscal year. The company ranked 10th, following its counterpart, Mckesson.

2022 Top 10 Fortune 500 List

  • Walmart
  • Amazon
  • Apple
  • CVS Health
  • United Health Group
  • Exxon Mobil
  • Berkshire Hathaway
  • Alphabet
  • Mckesson
  • AmerisourceBergen

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Kaduna Airport Finally Resumes Operation, Azman Air Becomes First Airline to Reopen 

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Kaduna International Airport

After it suspended all flight operations for almost two months, the Kaduna Airport has finally resumed its flight operations, starting with Azman Air. 

The Federal Airports Authority of Nigeria (FAAN) announced that the Kaduna airport has commenced full flight operations after it was shut down due to an attack by gunmen. 

The acting General Manager, Corporate Affairs, Federal Airports Authority of Nigeria (FAAN), Faithful Hope-Ivbaze, confirmed to newsmen on Monday that “Flight operations to Kaduna airport have commenced today with Azman Air.”

Investors King gathered that Azman Air, via its official Twitter account, announced the resumption of flights to the Kaduna airport, making it the first airline to resume operations.

The tweet reads: “Azman Air landed at Kaduna Airport today 23rd May 2022, to the elation and cheers of passengers, stakeholders, and staff. 

“Azman Air is the first Airline to resume operations in the Kaduna Airport after it has been closed for almost two months. 

“It was a defining moment for the aviation community as the airport is reopened after being closed for two months. It’s so exciting to be back!”

The airport manager, Aminat Salami, said: “As you can see, I have all my management staff here. We have been closed from the 26th of March, close to two months and I’m very sure and you can see we are all excited and happy and I’m praying that Azman will continue their operations successfully and they should not be discouraged by the first flight because people are not really aware”. 

“We will try to do more of the video advert so that the passengers would improve as time goes on,” she added. 

Recall that in March, it was reported that gunmen attacked the airport and killed a security guard while the Kaduna-Abuja train was also attacked on the same day. 

The airline had stopped its flight operations into Kaduna following the attack at the airport eight weeks ago. 

The attack was however repelled by the airport security operatives.

 

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