- Banks Get Dollar Surplus as CBN Offers $100 Million
The Central Bank of Nigeria (CBN) ended the week with a fresh dollar intervention at the interbank market worth $100 million, while banks were unable to pick them all. The development showed a surplus dollar position in the banks, particularly for the retail segment- personal business travel allowance, medical tourism and school fees, among others.
Specifically, while the banks had earlier made bids worth $91 million, CBN on its part offered $100 million and the lenders ended up picking $81.35 million, leaving about $18 million for the apex bank.
The Acting Director of Corporate Communications, CBN, Isaac Okorafor, attributed the inability of authorized dealers to pick up the entire offer of the CBN to increasing dollar supply and sense of apprehension among dealers who anticipate a further crash in the rate of the dollar.
Despite the development, analysts at Afrinvest Securities Limited, said the conditions are now right for CBN to open up the interbank market, considering the renewed interest to close long dollar positions by both individuals and corporates, through further adjustment in the interbank rate.
They also pointed out that renewed pressure on oil prices despite subsisting oil production cut agreement is an important anchor for spot exchange rate speculations. “CBN remains the dominant player, indicating that the improvement in the balance of payments and aggressive interventions are yet to fully transmit into business and investment confidence,” they said.
But Okorafor reiterated the determination of the bank to sustain its current interventions in the market, adding that “those who doubt the capacity of the CBN to sustain the intervention in the foreign exchange market are beginning to have a change of mind”.
While the interbank rate close the week at N307/$, naira sustained gains at the parallel market to N378/$, widening the speculative losses and triggering further apprehension among speculators, who anticipate further losses given the continued crash of the dollar.
Meanwhile, the interbank lending rates- Open Buy Back and Overnight declined by 4.8 per cent and five per cent respectively when compared to previous week’s record, as they closed the week at 9.5 per cent and 10 per cent apiece.
Both rates had closed high mid-week at 43.3 per cent and 44.4 per cent respectively and remained at same level on Thursday, although they had traded at 100 per cent apiece on Tuesday, as liquidity withdrawals by the apex bank were executed.
CBN had floated another securities auction worth N2.3 billion and N63.8 billion in 206-day and 360-day tenors respectively at 18 per cent and 18.6 per cent respectively, alongside the sale of $180 million at the interbank foreign exchange market.
These interventions contracted the quantity of money in circulation and triggered a hike in lending rates among banks, as they jostle for available cash to settle their bids.
Insider Dealing: Paul Miyonmide Gbededo Adds Another 612,326 Shares of Flour Mills to His Stake
Paul Miyonmide Gbededo, the Group Managing Director, Flour Mills of Nigeria Plc bought an additional 612,326 shares of the company.
The management stated this in a disclosure statement sent to the Nigerian Stock Exchange on Monday.
The managing director purchased the shares at N27.75 per share on November 20, 2020 at the Nigerian Stock Exchange in Lagos, Nigeria. Meaning, Gbededo has invested another N16,992,046.5 into the company.
This was in addition to the 3,284,867 shares valued at N91,642,269 and 4,200,852 shares worth N117.62 million purchased by Gbededo earlier in the month of November. Bringing his recent purchases to 8,098,045 million shares worth N226,254,315.5. See the details of the latest transaction below.
FCMB Reports 16.4 Percent Increase in Profit After Tax in Q3 2020
FCMB Group Plc, one of the leading financial institutions in Nigeria, reported a 16.4 percent increase in profit after tax for the third quarter of the year.
In the unaudited financial statements released through the Nigerian Stock Exchange (NSE), the lender’s profit before tax grew by 10.2 percent year-on-year to N4.8 billion while profit after tax increased by 16.4 percent to N4.2 billion.
FCBMB Group Plc expanded gross earnings by 4.8 percent to N48.3 billion during the period under review. Similarly, the bank’s net interest income rose by 30.03 percent year-on-year to N22.7 billion.
The strong performance continued across the board as net fee and commission income increased by 0.29 percent to N5.2 billion. Net trading income rose by 39.4 percent year-on-year to N1.82 billion.
Personnel expenses dropped by 7.9 percent to N6.9 billion during the quarter while general and administrative expenses declined by 7.52 percent year-on-year to N7.6 billion. Largely due to the COVID-19 lockdown.
Loans and advances to customers rose by 10.8 percent to N793.14 billion between December 2019 and September 2020. Total desposits from customers during the same period grew by 26.7 percent to N1.2 trillion.
The bank’s total assets increased by 22.12 percent to N2.04 trillion.
Stanbic IBTC Obtains Approvals, License to Establish Life Insurance Subsidiary
Stanbic IBTC Holdings Plc on Friday announced that it has obtained all required Regulatory Approvals and a license from the National Insurance Commission to establish a wholly-owned Life Insurance subsidiary, Stanbic IBTC Insurance Limited (SIIL).
In a statement signed by Chidi Okezi, Company Secretary, Stanbic IBTC and released on Friday, the bank said “The establishment of this new subsidiary essentially complements the bouquet of product offerings by Stanbic IBTC as it continues its goal of being the leading end-to-end financial solutions provider in Nigeria. In this regard, SIIL will aim to facilitate long term insurance for already financially included individuals and will seek to become the preferred Insurer in the Life Insurance Business.
“Stanbic IBTC Holdings PLC, a member of Standard Bank Group, is a full-service financial services group with a clear focus on three main business pillars – Corporate and Investment Banking, Personal and Business Banking and Wealth Management. The group’s largest shareholder is the Industrial and Commercial Bank of China (ICBC), the world’s largest bank, with a 20.1% shareholding. In addition, Standard Bank Group and ICBC share a strategic partnership that facilitates trade deals between Africa, China and select emerging markets. Standard Bank Group is the largest African financial institution by assets. It is rooted in Africa with strategic representation in 21 countries on the African continent.
“Standard Bank has been in operation for over 158 years and is focused on building first-class, on-the-ground financial services institutions in chosen countries in Africa; and connecting selected emerging markets to Africa by applying sector expertise, particularly in natural resources, power and infrastructure.”
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