- Naira Closes at 380/dollar as Forex Supply Rises
The naira rose to 380 per United States dollar on the parallel market on Thursday, up from 390 it closed on Wednesday.
This came hours before the Central Bank of Nigeria sold $20,000 each to Bureau De Change operators. The CBN had sold $20,000 to each of the BDCs earlier this week to boost liquidity.
According to analysts, the CBN has sold around $4bn since it started its aggressive intervention on the forex market in February.
Analysts, however, doubted whether the CBN could sustain the trend.
“Until we see a freely traded naira a la Egypt, Nigeria is fighting with one hand tied behind its back,” the Head of Nairobi-based Rich Management, Aly-Khan Satchu, told Reuters.
The central bank has been intervening on the official market to try to narrow the currency’s spread with the black market rate. On the official market, the currency was quoted at 306 per dollar on Thursday.
The spread has become far narrower, thanks to the central bank intervention. The naira was 520/dollar on the black market in February after the apex bank devalued the naira for retail customers to 375.
The Minister of Finance, Mrs. Kemi Adeosun, said liquidity was improving on the currency markets on dollar injection, thanks to rising oil prices, adding that government was harmonising fiscal, monetary and trade policies to boost growth.
“Higher oil prices alone are insufficient to explain the central bank’s aggressive interventions over the past few weeks and (oil) production seems to have ramped up slowly over the first quarter of this year,” a senior economist at the NKC in Johannesburg, Cobus de Hart, said.
He said, “Whether the central bank used funding such as external debt-related inflows to intervene in the forex market remains to be seen, but in general, we are not convinced that the regulator will be able to sustain this trend indefinitely.”
The President, Association of Bureau De Change Operators, Aminu Gwadabe, said the increase in currency sales to the BDCs would help take out pressure from the black market, adding that some importers were no longer bringing forward dollar demand as liquidity continued to improve.
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.”
World Bank to Discuss New $1.5 Billion Loan Request From Nigeria
The Finance Minister, Budget and National Planning, Mrs. Zainab Ahmed, on Friday said the Federal Government has met all the conditions for a fresh loan of $1.5 billion from the World Bank.
The minister disclosed this on Bloomberg TV.
She said the multilateral financial institution is in the final stage of approving the loan. The minister explained that the loan will be discussed in the bank’s next meeting and possibly be approved in the same meeting.
In June, the Senate approved the borrowing plans but the World Bank pushed back demanding Nigeria fulfill the conditions attached to the $3.4 billion loan received from the International Monetary Fund (IMF) in May.
Some of the conditions were to increase revenue generation by upping VAT, the introduction of tariff reflective electricity bill, the removal of subsidy and the unification of the nation’s foreign exchange.
Most of which the Federal Government has done despite protests from most Nigerians who called the new policies anti-people given their current situation.
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