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21 Banks Borrow N4.06tr From CBN in Three Months

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CBN

Banks have been frequenting the Central Bank of Nigeria (CBN) Window to borrow cash to boost their liquidity positions, according to the CBN Economic Report for the second quarter, released yesterday.

Twenty-one commercial banks borrowed N4.06 trillion from the CBN’s Window in the first quarter- between April and June.

The figure, the report said, was by far higher than N560.8 billion borrowed in the first quarter- from January to March this year, the report released yesterday showed.

The funds came through the Standing Lending Facility (SLF), which is an overnight CBN credit available on banking days between 2 pm and 3.30 pm, with settlement done on same day value. Funds were sourced mainly from time, savings and foreign currency deposits, as well as accretion to unclassified assets. The funds were used, largely, to extend credit to the private sector and payment of claims on demand deposit.

The CBN attributed the huge borrowing figure by banks to foreign exchange illiquidity in the system, which it said, hindered the smooth running of the foreign exchange inter-bank market and this led the bank to float a special foreign exchange auction.

The apex bank said the settlement of these transactions drained liquidity in the money market. Consequently, inter-bank money market rates spiked and the trend in standing facilities reversed as there was more patronage at the Standing Lending Facilities (SLF) than the Standing Deposit Facility (SDF).

The regulator said provisional data indicated that total value of money market assets outstanding at the end of the second quarter of 2016 stood at N10.46 trillion, showing an increase of 6.7 per cent, compared with the level in the first quarter. The development reflected the 8.09 per cent and 2.73 per cent growth in Federal Government of Nigeria bonds and treasury bills, respectively.

The report, posted on the CBN’s website, said developments at the CBN standing facilities window in the review quarter indicated higher patronage at the SDF window, during the first two months of the review quarter.

The trend, however, reversed with the settlement of a large volume of foreign exchange purchased at the special auction conducted on June 20.

“Total request for Standing Lending Facility (inclusive of Intraday lending facilities converted to overnight repo) during the review period amounted to N4.06 trillion, with N1.46 billion in interest earned, compared with SLF of N560.80 billion and interest earned of N0.28 billion in the preceding quarter,” it said.

This amounted to N3.50 trillion and N1.18 billion increase in SLF and interest earned, respectively, from the levels in the first quarter of this year. It said the total deposit at the SDF window during the review period was N6.01 trillion with a daily average of N100.22 billion, compared with N6.61 trillion in the first quarter of this year.

The report said the cost incurred on SDF in the review quarter stood at N1.74 billion, compared with N1.08 billion, in the preceding quarter.

It said the commencement of the new foreign exchange policy on June 20 influenced the direction of the financial market thereafter.

CBN data also showed that the total assets and liabilities of the commercial banks stood at N31.23 trillion at the end of the preceding quarter of 2016, representing an increase of 9.6 per cent over the level at the end of the preceding quarter.

The funds, it said, were sourced, mainly, from time, savings and foreign currency deposits, foreign liabilities and unclassified liabilities. The funds were used, mainly, to increase claims on private sector, acquire foreign and unclassified assets.

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.

Finance

Ecobank To Pay Customers N5 For Every Dollar Received

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ecobank

Ecobank To Pay Customers N5 For Every Dollar Received

Ecobank has implemented the CBN scheme which offers N5 for every Dollar received into domiciliary accounts or as cash over the counter. Korede Demola-Adeniyi; Head, of Consumer Banking, Ecobank Nigeria, who announced this in Lagos stated that the decision is in line with the CBN directive and fully aligns with efforts to encourage the inflow of diaspora remittances into the country.

She noted that the “CBN Naira 4 dollar scheme” is an unprecedented incentive for senders and recipients of international money transfers.

Korede Demola-Adeniyi said that the scheme takes effect from 8th March and will run till 8th May 2021. “Ecobank will pay N5 on every Dollar so beneficiaries will not only get the foreign currency sent from their family and friends abroad, but they will also get extra Naira”, she stated.

Only recently, Ecobank had a first-of-its-kind virtual Diaspora Summit to discuss opportunities for Nigerians living abroad and the various platforms available to assist them with their investment decisions and remittance needs. The event had major players in the remittance space, diaspora audience, government officials and notable stakeholders in attendance.

Further, the Managing Director, Ecobank Nigeria, Patrick Akinwuntan has disclosed that apart from consistent engagement with Nigerians in the diaspora, Ecobank is leveraging its digital technology to make remittances to Nigeria and Africa easy, convenient and affordable.

Mr. Akinwuntan stated that growing evidence has shown a positive relationship between diaspora remittances and economic growth.

“Ecobank will continue to pursue its mandate of helping to enhance the economic development and integration of Africa, through the 33 countries where the bank operates on the continent. Ecobank’s Rapidtransfer and mobile app (Ecobank Mobile) enable Africans, wherever they are, to easily and instantly send money to bank accounts, mobile wallets and agent locations across 33 African countries”, he stated.

Ecobank Nigeria, a member of the Pan African Banking Group is committed to supporting Africans in the diaspora by providing advisory services, remittance solutions, investment options and financial planning schemes. The bank also offers mortgages, treasury bills, capital market instruments, among others.

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Banking Sector

Peter Obaseki Retires as Chief Operating Officer of FCMB Group Plc

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FCMB

The Board of Directors of FCMB Group Plc has announced the retirement of Mr. Peter Obaseki, the Chief Operating Officer of the financial institution, with effect from March 1, 2021. He was also an Executive Director of the Group.

His retirement was approved at a meeting of the Board of the Group on February 26, 2021. This has also been announced in a statement to the Nigerian Stock Exchange (NSE) by the financial institution.

The Chairman of FCMB Group Plc’s Board of Directors, Mr Oladipupo Jadesimi, thanked Mr. Obaseki for his valuable service and excellent support to the Board for many years.

FCMB Group Plc is a holding company divided along three business Groups; Commercial and Retail Banking (First City Monument Bank Limited, Credit Direct Limited, FCMB (UK) Limited and FCMB Microfinance Bank Limited); Investment Banking (FCMB Capital Markets Limited and CSL Stockbrokers Limited); as well as Asset & Wealth Management (FCMB Pensions Limited, FCMB Asset Management Limited and FCMB Trustees Limited).

The Group and its subsidiaries are leaders in their respective segments with strong fundamentals.

For more information about FCMB Group Plc, please visit www.fcmbgroup.com.

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Banking Sector

COVID-19: CBN Extends Loan Repayment by Another One Year

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Central Bank Extends One-Year Moratorium by 12 Months

The Central Bank of Nigeria (CBN) has extended the repayment of its discounted interest rate on intervention facility by another one-year following the expiration of the first 12 months moratorium approved on March 1, 2020.

The apex bank stated in a circular titled ‘Re: Regulatory forbearance for the restructuring of credit facilities of other financial institutions impacted by COVID-19’ and released on Wednesday to all financial institutions.

In the circular signed by Kelvin Amugo, the Director, Financial Policy and Regulation Department, CBN, the apex bank said the role-over of the moratorium on the facilities would be considered on a case by case basis.

The circular read, “The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from nine per cent to five per cent per annum for one year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 pandemic on the Nigerian economy.

“Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.

“Following the expiration of the above timelines, the CBN hereby approves as follows:

“The extension by another 12 months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities.

“The role-over of the moratorium on the above facilities shall be considered on a case by case basis.”

It would be recalled that the apex bank reduced the interest rate on its intervention facility from nine percent to five percent and approved a 12-month moratorium in March 2020 to ease the negative impact of COVID-19 on businesses.

To further deepen economic recovery and stimulate growth, the apex bank has extended the one year-moratorium until February 28, 2022.

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