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NDIC: Banks’ Bad Loans Stood at N1.82tn in December

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  • NDIC: Banks’ Bad Loans Stood at N1.82tn in December

The Managing Director/Chief Executive, Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umaru Ibrahim, has put banks’ total non-performing loans (NPLs) portfolio at N1.82 trillion as at December 2016.

Specifically, he said the 25 Deposit Money Banks (DMBs) had total loans portfolio of N18.53 trillion out of which N1.85 trillion or 10 per cent were NPLs where N740 billion or 40 per cent constituted Insider/Directors related loans.

According to him, the figure was far above regulatory threshold of five per cent for the DMBs.

Speaking during the defence of the corporation’s proposed 2017 budget before the House of representatives Committee on Insurance and Actuarial Matters, he added that while the banking industry indicated strong fundamentals in regulatory assessment and rating, regulators were concerned about the rising tide of NPLs in the banking system.

Meanwhile, the NDIC boss said it proposed to spend the sum of N76.72 billion for 2017 while also targeting a total income of N102.29 billion in the same period.

According to the corporations budget estimate for the year, its operating expenses was put at N43.22 billion or 49.94 per cent of total expenditure as well as total Capital expenditure of N43.32 billion or 50.06 per cent of the total budget.

The capital expenditure would be funded by the corporation’s General Reserve Fund which stood at N45.67 billion as at December 31, 2016.

Ibrahim added that a total of N47.25 billion was also being proposed as 80 per cent net Operating surplus to be transferred into Consolidated Revenue Fund (CRF) in 2017.

In his presentation, which was commended by the committee, Ibrahim stated that in 2016, the corporations actual income (net of provisions) was N85.02 billion which was expendable to the limit of 75 per cent in line with the provisions of Fiscal Responsibility Act (FRA) 2007 while its total expenses was N31.551 billion.

This gave a net operating surplus of N53.46 billion out of which the corporation made provision to transfer the sum of N42.77 billion or 80 per cent into the CRF.

According to him, as at Febuary 2017, the Corporation had made a total transfer of N35.89 billion into CRF while awaiting the conclusion of its 2016 External Audit report before transferring the outstanding balance of N6.88 billion to the CRF in line with FRA 2007.

In a statement signed by Hakeem Bakare, on behalf of the Head, Communication and Public Affairs, Ibrahim said with this, the corporation had surpassed its budgeted sum of N35.89 billion as against the actual sum of N42.77 billion transferred into CRF.

The members of the committee had expressed grave concern over the increasing wave of non-performing loans (NPLs) particularly delinquent insider related facilities in various banks and its consequences on the stability of the nation’s banking system-and members demanded an update on the state of the Nigerian banking system.

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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President Tinubu Approves Concrete Redesign for Abuja-Kaduna Road Amid Contract Termination

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The Federal Government has announced plans to address the difficulties faced by road users on the Abuja-Kaduna-Zaria-Kano road with the redesign of the dual carriageway.

This announcement was made by the Minister of Works, David Umahi via a statement on Wednesday.

The Ministry revealed that the 127 kilometers project has been approved by President Bola Tinubu.

This development comes two days after the Ministry of Works announced the termination of its contract with Julius Berger for the Section I (Abuja-Kaduna) of the Abuja-Kaduna-Zaria-Kano Dual Carriageway project in FCT, Kaduna, and Kano States.

Investors King understands that the contract for the rehabilitation of the road was awarded to Messrs Julius Berger (Nig.) Plc on December 20, 2017.

The project, initially valued at N155.7 billion, with a 36-month completion period was further categorized into three sections.

However, only Section II (Kaduna-Zaria) has been completed and partially handed over.

Section III (Zaria-Kano) is partially finished while Section I remains in a severely deteriorated state.

A statement from the Ministry explained that the decision to terminate the contract with Berger was based on non-compliance with reviewed cost, scope, and terms, stoppage of work, and refusal to remobilise to site.

The ministry on Wednesday, November 6, confirmed that Section I has been redesigned and re-scoped.

The statement reads, “The President, His Excellency, Bola Ahmed Tinubu, GCFR has approved that the remaining 127 kilometres of the Rehabilitation of Abuja – Kaduna – Zaria – Kano Dual Carriageway, Section I (Abuja – Kaduna) be redesigned using continuously reinforced concrete pavement (CRCP) instead of the present asphaltic one.”  

“The contract, divided into three (3) sections, was awarded to Messrs Julius Berger (Nig.) PLC on 20th December 2017 at an initial sum of N155, 748,178,425.50 billion (one hundred and fifty-five billion, seven hundred and forty-eight million, one hundred and seventy-eight thousand, four hundred and twenty-five naira, fifty kobo) with a completion period of thirty-six (36) months.” 

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Tax Expert Warns Tinubu: VAT, PAYE Hikes Will Deepen Hardship for Nigerians

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Due to Nigeria’s economic situation, tax expert Adebisi Oderinde has urged President Bola Ahmed Tinubu to halt plans to increase the VAT and Pay-As-You-Earn (PAYE) tax rates.

Oderinde, who is also the CEO of AOC-Adebisi Oderinde & Co, made the statement during the inauguration of the company’s Head Office in the Kara area of Ogun State.

He said the country’s economic conditions are challenging and particularly unfavorable for SMEs and warned that implementing tax reform could destabilize many small businesses as inflation has already eroded purchasing power in Nigeria.

With over 28 years of experience as a tax consultant, Oderinde noted that new tax reforms would likely worsen hardship across the country.

“My advice is to make hay while the sun shines, as the journey of a thousand miles begins with a single step, and slow and steady wins the race. The country is hard! As a tax practitioner, I continue to pray for our President, but he must heed the advice of elders, especially when it concerns tax reform,” he said.

“This is not the right time to reform any tax, nor to adjust rates. Nigerians’ purchasing power is very low. While some may think of VAT reform as beneficial, it would have a negative impact, especially on Lagos State. One part of the reform aims to cancel the consumption tax, which would hit Lagos hard, as the state earns more from consumption tax than any other state in the federation,” he added.

Oderinde further advised northern Nigeria not to support the proposed policy, warning it could disproportionately affect the region.

“They also want to increase PAYE, and recent data from the NBS in 2023 shows that the total IGR from the 36 states plus the FCT is about N2.4tn, with PAYE accounting for about 63%. If PAYE is raised, it will impact many states significantly. Instead of focusing on VAT, the northern states should consider that an increase in PAYE would affect them even more than VAT,” he explained.

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Power Restored Hours After Lastest Grid Collapse

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Electricity - Investors King

Electricity has been restored in some parts of the states that were hitherto affected by the nation’s power grid collapse.

Investors King gathered that some states including Lagos, Osun, Federal Capital Territory among others now have light.

Recall that the Transmission Company of Nigeria (TCN) had on Tuesday announced the latest National Grid collapse.

Checks by Investors King, however, revealed that the last disruption was the tenth time Nigeria would be experiencing total blackout due to grid collapse in about nine months in 2024 alone.

The situation has been raising concerns from Nigerians and other stakeholders even as others alleged that the collapse has led to inferno in people’s homes among other property destruction.

The General Manager of TCN Public Affairs, Ndidi Mbah, had assured members of the public that the grid collapse which occurred at 1:52 pm on November 5 would be speedily fixed.

The GM revealed that the grid collapse was caused by line and generator trippings, adding that efforts were on to rectify it.

Mbah had disclosed how the national grid experienced a partial disturbance due to a series of line and generator trippings that caused instability in the grid and, consequently, the partial disturbance of the system.

Each time the disruption through citizens into darkness, businesses are affected as many Nigerians task the Federal Government to tackle the menace.

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