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Currency Speculators’ll Lose Money, ABCON Warns BDCs

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  • Currency Speculators’ll Lose Money, ABCON Warns BDCs

The Association of Bureau De Change Operators of Nigeria has told its members they will lose money if they engage in sharp practices in the foreign exchange market.

It advised members to comply with the association and the Central Bank of Nigeria’s regulations in their daily operations.

The President, ABCON, Alhaji Aminu Gwadabe, said these at an emergency meeting organised by the association to warn members against the consequences of engaging in illegal forex activities.

He spoke in Lagos on Monday.

Gwadabe said, “The purpose of this emergency meeting is to address certain current issues that have emerged in the market. If you think you are keeping money (forex), you are deceiving yourselves; you are going to lose money. The CBN is going to inject liquidity into the system.

“Let us not be deceived. No amount of frustration or coercion will stop the CBN as it has agreed to give liquidity and it will be a surprise.”

He enjoined the BDC directors to cooperate with the CBN and security agencies as they stepped up efforts to stabilise the foreign market and the exchange rate.

The ABCON leader assured its members that the association would continue to update them on emerging industry trends.

He said, ‘Sometimes, government officials and security agencies cannot distinguish between licensed BDCs and a parallel market operators. They see us as parallel market operators.

“Of course, we cannot completely claim some of us are not part of the parallel market operator. We cannot say no to it until we all agree to do it well and comply with all directives. That is when the regulators, security agencies will be willing to at least listen to what we are telling them.

Highlighting the responsibilities of the BDC operators, Gwadabe said, “You are expected to comply with your Know-Your-Customer policy, cash transaction report, and association transaction report; these three compliance area are key.

“Again, the security agencies and regulators have put the directors of the BDCs under watch. Don’t say you have not been informed.”

He said the recent fall in the value of the naira against the United States dollar was unacceptable, urging members to play their parts for the local unit to reverse the loss.

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

CBN Maintains 11.5 Percent Monetary Policy Rate, Leaves Other Ratios Unchanged

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The Central Bank of Nigeria led Monetary Policy Committee (MPC) has left the interest rate unchanged at 11.5 percent to further stimulate activities in the real sector of the economy.

Godwin Emefiele, the Governor of Central Bank of Nigeria disclosed this at the end of the MPC meeting on Tuesday in Abuja.

He said other parameters, the Cash Reserve Ratio (CRR), Liquidity ratio, and asymmetric corridor, were left unchanged.

According to the Governor, the committee voted unanimously to maintain the current monetary policy and attributed the surge in inflation to structural policies, the increase in pump price and the recent #EndSARS protest.

Highlights of CBN-MPC’s  Decision

  • MPR was kept at 11.50%
  • The asymmetric corridor of +100/-700 basis points around the MPR
  • CRR was retained at 27.5%
  • Liquid Ratio was also kept at 30%

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Finance

Unity Bank Grew Gross Earnings by 8 Percent to N34 Billion in Nine Months

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Unity Bank Plc grew gross earnings by 8 percent despite COVID-19 and other headwinds that hurt the profitability of most businesses in the first nine months of the year.

A break down of the bank’s unaudited financial results for the period showed gross earnings rose by 8 percent to N33.91 billion for the nine months ended September 30, 2020, up from N31.26 billion posted in the same period of last year.

The lender’s total assets rose by 44 percent from N293.05 billion in the corresponding period of 2019 to N420.87 billion in the period under review.

Unity Bank grew profit before tax from N1.61 billion in 2019 to N1.71 billion in the period under review, while profit after tax expanded from N1.48 billion in the corresponding period to N1.57 billion in 2020.

Customers’ deposits stood at N332.36 billion during the period under review, up from N257.69 billion posted in 2019.

Commenting on the performance, Mrs. Tomi Somefun, the Managing Director/Chief Executive Officer, Unity Bank Plc, expressed delight at the strong growth recorded across the bank’s balance sheet, especially from both the liability and assets side of the business and across key indices.

She said, “even as the bank continues to innovate in its e-business product bouquet to target and support value chain business with robust technology and thus diversify its earnings base.”

Somefun said, “One of the areas that will define our strategic direction going forward is investment in alternative channels, leveraging further deployment of resources in technology.

“COVID-19 gave us a chance to test the integrity and scalability of our technology, the IT infrastructure, and the electronic banking channels, and provided us an opportunity to see where we needed to improve and strengthen, knowing that the future of sustainable banking business is in alternative channels.”

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Financial Sector Grew by 6.8 Percent in the Third Quarter

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The finance and insurance sector that comprises of both the financial institutions and insurance subsectors grew by 5.91 percent year-on-year in nominal terms in the third quarter (Q3).

According to the National Bureau of Statistics (NBS) latest report, the financial institutions’ subsector accounted for 88.89 percent of the sector in real terms in the quarter under review while the insurance subsector contributed the remaining 11.11 percent.

During the third quarter of 2020, the financial institutions’ subsector grew by 6.8 percent in Q3 2020 from 28.41 percent in Q2 2020 and 0.61 percent in Q3 2019 despite COVID-19 and a tough operating environment. The insurance subsector, however, contracted by -18.67 percent in Q3 2020 from -29.53 percent in Q2 2020 and 3.96 percent in Q3 2019.

On a quarterly basis, the sector declined by 24.76 percent.

In terms of contribution to GDP, the finance and insurance sector contributed 2.46 percent in Q3 2020, higher than the 2.40 percent it represented a year ago and lower than the contribution of 3.76 percent achieved in the previous quarter.

The economy contracted by 3.62 percent in the third quarter following a 6.10 percent decline posted in the second quarter. Nigeria is officially in the second economic recession in four years.

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