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CBN to Bar Errant Bank Customers From Forex Market

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  • CBN to Bar Errant Bank Customers From Forex Market

The Central Bank of Nigeria on Wednesday raised concerns about what it called the indiscriminate and suspicious manner some bank customers were spending dollars and other foreign currencies abroad through their naira debit cards.

Consequently, the regulator said it had through the Bankers’ Committee concluded that bank customers who spent above the $50,000 annual forex limit it imposed would be barred from the nation’s forex market.

The Director, Banking Supervision, CBN, Tokunbo Martins, stated this after the 329th Bankers Committee meeting held at the CBN office in Lagos.

She said, “In the CBN’s move to manage the demand for forex, there was a rule that was put in place that people are not allowed to withdraw more than $50,000 annually on their naira debit cards.

“For a while, the policy has been abused by bank customers, and the CBN had not taken any step to that effect. We have decided to take the steps now to enforce the rule. So, we want members of the public to remember that that rule is in place.”

She added, “All your accounts are linked to a particular Bank Verification Number. Now, that the BVN only allows you to withdraw only $50,000 per annum. If people continue to breach that rule, they will lose access to forex market.”

Martins also ruled out a possible lay-off of workers in the banking sector, saying the Bankers’ Committee was committed to keeping their staff members.

The CBN chief said, “One of the things we discussed, you must have been hearing about an impending retrenchment in the banking industry. So, we understand that many bank workers are experiencing fears about possible retrenchment in the industry.

“We discussed it among the banks; banks are committed to not retrenching their workers. So, whatever rumours are flying around about mass retrenchment happening or not happening, that is not true.”

Tokunbo also debunked a report by a Dubai-based investment bank that seven of the nation’s banks were having inadequate capital.

Arqaam Capital, the Dubai-based investment bank, had said seven Nigerian banks were undercapitalised with two of them close to being insolvent.

The CBN director said Nigerian banks were facing economic challenges but had strong capital buffers to weather the storm.

Martins said, “Banks have strong capital buffers; banks are feeling the headwinds.”

She said the Nigerian banking industry’s non-performing loan ratio of 11.7 was better than some European countries’ with about 15 per cent or 18 per cent NPL ratio.

According to her, the challenges facing the nation’s banking sector as regards the rising NPL is a global matter.

The Deputy Managing Director, Guaranty Trust Bank Plc, Mrs. Cathy Echeozo, said commercial banks through the committee were committed to allocating more forex to manufacturers in order to enhance economic activities and prevent lay- offs in the manufacturing sector.

She said, “We met with the team from the Manufacturing Association of Nigeria to ensure that manufacturers employ thousands of people and so on. “We discussed how to boost the supply of forex to our manufacturers so that they can continue to produce their products.”

The Managing Director, Stanbic IBTC Bank, Mr. Yinka Sanni, said the Bankers Committee discussed how the country could tap into the funding opportunities in the pension industry.

He said, “We were also reminded of the role/responsibility of banks to help grow the economy, especially the manufacturing sector. As bank CEOs, we agreed to ensure that the economy grows. We also looked at how the country can leverage the opportunity in the pension industry.”

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

Peter Obaseki Retires as Chief Operating Officer of FCMB Group Plc

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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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Finance

MTN Nigeria Generates N1.35 Trillion in Revenue in 2020

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MTN Nigeria Grows Revenue by 15.1 Percent from N1.169 Trillion in 2019 to N1.35 Trillion in 2020

Despite the COVID-19 pandemic and challenging business environment, MTN Nigeria realised N1.346 trillion in revenue in the financial year ended December 31, 2020.

The leading telecommunications giant grew revenue by 15.1 percent from N1.169 trillion posted in the same period of 2019.

Operating profit surprisingly jumped by 8.5 percent from N393.225 billion in 2019 to N426.713 billion in 2020.

This, the telecom giant attributed to the surge in finance costs due to increased borrowings from N413 billion in 2019 to N521 billion in 2020.

MTN Nigeria further stated that the increase in finance costs was the reason for the decline in growth of profit before tax to 2.6 percent.

MTN Nigeria grew profit before tax by 2.6 percent to N298.874 billion, up from N291.277 billion filed in the corresponding period of 2019.

The company posted N205.214 billion profit for the year, a 0.9 percent increase from N203.283 billion recorded in the 2019 financial year.

Share capital remained unchanged at N407 million. While Total equity increased by 22.3 percent from N145.857 billion in 2019 to N178.386 billion in 2020.

MTN Nigeria’s market price per share increased by 61.8 percent from N105 to N169.90.

While market capitalisation as at year-end also expanded by 61.8 percent to N3.458 trillion, up from N2.137 trillion.

The number of shares issued and fully paid as at year-end stood at 20.354 million.

MTN Nigeria margins were affected by Naira devaluations and capital expenditure due to the new 4G network coverage roll-out.

Margins were adversely affected by the effect of naira devaluation and expenses associated with new sites’ roll-out to boost 4G network coverage in FY’20.

“On the former, we note that MTNN expanded the scope of its service agreement with IHS Holding Limited and changed the reference rate for converting USD tower expenses to NAFEX (vs CBN’s official rate previously). Thus, over the full-year period, the company’s operating margin contracted by 1.9 ppts YoY to 31.7%,” CardinalStone stated in its latest report.

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