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CBN to Move Against Banks Over Poor Services

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  • CBN to Move Against Banks Over Poor Services

The Central Bank of Nigeria (CBN) has warned the nation’s banks against poor services, asking them to shape up or close shop.The caution followed a series of complaints by customers of frustrations in completing their transactions at various branches or at Automotive Teller Machines (ATMs), most associated with system failures or poor network connectivity.

The Director of Banking and Payment System Department of the CBN, Dipo Fatokun, threatened to sanction any bank found wanting. He urged the public not to withhold such complaints, but speak out against inefficiencies.

Refusing to condone the excuse of system failures, Fatokun told The Guardian in a conversation: “Yes, there could be system issues, but it should be the exception and not the norm.”

As it is, the banking industry operations may soon be laden with the challenges of either malfunctioning of core banking software, inadequacy of the software, lack of trained personnel to operate them or negligence. This is because customers are increasingly turned down from updating their accounts except they go to the branch of domicile, on the grounds that it cannot be done through the unified core banking system. In other instances, funds transfers from one account to another, even within the same bank, are not completed, and may take up to one month or more, depending on the level of efficiency of the banks to return the funds to the owner’s account.

Reacting to the development, the CBN described such inefficiencies as unacceptable. With regard to money transfers, Fatokun said it was one of the simplest banking transactions. “After six minutes, the receiving account should be credited, if not, the bank should give a reason. Also the refund in the event of uncompleted transaction for one reason or another, should also take minutes not weeks or months.”

The developments, observed in major banks’ branches, have raised concerns over the availability of skilled personnel to carry out the operations, given the recent downsizing in the industry.

The situation has also raised questions over the functionality of the deployed banking software, as well as the validity of several claims by the operators of acquisition of sophisticated software aimed at ensuring the efficiency of the unified banking system.

Specifically, these banks were not able to update customers’ accounts that were previously opened in another branch as they failed to access the details. Officials of these banks claim it can only be done at the branch of domicile, a situation that appears strange given the level of the country’s payments system.

A customer of one of the top five banks, after going through the process of updating her account which lasted for more than one hour, was finally referred back to the branch of domicile.

Another customer confided in The Guardian that he too was referred to his branch where the account was opened in Kaduna, even as the account continues to hold on to huge cash as well as receive lodgements.

The CBN described such development as contrary to the modern banking industry.According to Fatokun, as long as there is no network failure, every account in a bank can be accessed from any of the same bank’s branch, which is the reason people make transactions across the country.

“It is not acceptable and no bank should give such an excuse. It is a setback to the progress recorded in our payment system. Please report such bank and branch to CBN for necessary action,” he said.

The ordeals of two customers from two different banks caused further inquest by The Guardian, which led to the discovery of similar complaints by customers from other banks.

Reiterating the importance of knowledge in the effective discharge of duties, Fatokun urged banks to train their personnel further in their specific areas of operations to stem inefficiencies.

The dilemma remains whether the situation is a matter of one branch integration challenge or a fast-spreading problem that may soon take the industry by surprise.

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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