Connect with us

Finance

Improved Dollar Liquidity May Boost Banks’ Earnings

Published

on

dollar
  • Improved Dollar Liquidity May Boost Banks’ Earnings

The increase in dollar sales by the Central Bank of Nigeria (CBN) is giving banks in the country reason to cheer.

The CBN increased sales of the U.S. currency to banks in late February to try and curb foreign exchange shortages that contributed to the first annual contraction in the country’s economy in two decades and limited trading by the country’s lenders.

It even created sectoral supply of the greenback which led to significant appreciation of the naira to as low as N520 to the dollar then, but hovers around N385 to the dollar at the moment.

Transactions in the currency market rose by a half to $9.72 billion in March compared to the previous month, according to Lagos-based FMDQ OTC Securities Exchange, the nation’s foreign-exchange trading platform.

“We see an improvement in the number of letters of credit, bills being settled and remittances being allowed,” President of the Chartered Institute of Bankers of Nigeria (CIBN), Segun Ajibola, told Bloomberg in an interview.

“Ordinarily, a margin will always be left behind for banks, so it will be right to say at the end of the day it will be an increase in revenue to banks.”

Nigerian banking stocks rallied the most last week after it emerged that CBN Governor, Mr. Godwin Emefiele, will let the market determine the naira’s rate in a new forex window for portfolio investors in a further bid to revive the economy and address the dollar deficit.

While he would tolerate the naira weakening in the window, the central bank probably won’t devalue the naira’s official rate, according to a person who attended meetings with the policy maker over the past two weeks.

The country’s lenders, especially small- and medium-sized banks, have been hard hit by the economy’s woes, as companies scaled back output and workers lost their jobs.

Non-performing loans (NPLs) as a percentage of gross loans worsened to 14 per cent at the end of December from 11.7 per cent at the end of June, the central bank said earlier this month.

Banks are now expecting a reduction in NPLs and an improvement in profitability following an increase in the oil price and dollar flows in the country, Ajibola said.

Emefiele last week revealed that the country’s foreign reserves have exceeded $31 billion, a development which he said gives the central bank the firepower to sustain its forays into the foreign exchange market.
He also expressed optimism that Nigeria would exit the recession by the end of the second quarter of 2017, or latest by the third quarter of the year.

Emefiele said the gains made by the local currency and corresponding drop in inflation were indications that the country was on its way out of the recession.

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

Emefiele Pledges Accommodative Monetary Policy to Boost Economic Growth

Published

on

Godwin Emefile

Emefiele Pledges Accommodative Monetary Policy to Boost Economic Growth

The Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has pledged to adopt accommodative monetary policy stance in 2021 in order to support economic growth in the country.

Emefiele, said this on Friday, while speaking at a CBN/Bankers’ Committee’s initiative for economic growth, which is a one-day special summit on the economy by bank chief executive officers.

The theme of the summit is: “How to Overcome the Pitfalls of Recession.”

Nigeria’s economy recently came out of recession, according to the Gross Domestic Product report for fourth quarter 2020 released by the National Bureau of Statistics.

Owing to the slump GDP growth of 0.11 per cent that lifted the economy out of recession, Emefiele said it was imperative that, “we do all we can in 2021 and beyond to ensure that we build on the positive momentum and strengthen our efforts at stimulating growth.”

He expressed optimism that with the discovery and deployment of vaccines worldwide, 2021 would be a year of massive global recovery and Nigeria must not be left out.

“The banks CEOs are here, whether by moral suasion or by force, they will have to participate in this journey. In order to drive and sustain this recovery therefore, we need to sustain the accommodative fiscal and monetary policy measures aimed at improving access to finance for households and businesses.

“Secondly, we must prevent a resurgence in Covid-19 related cases. Thirdly, we must ensure that a significant number of our population is significantly vaccinated and also improve foreign exchange inflows into our country,” he added.

Continue Reading

Banking Sector

CIT Microfinance Bank Disburses Over N16bn Loans

Published

on

micro-finance-bank

CIT Microfinance Bank Disburses Over N16bn Loans

CIT Microfinance Bank Limited says it has disbursed about N16bn loans since it commenced operations as part of its contributions to the financial sector and empowerment of businesses.

The Managing Director of the microfinance bank, Mr Kingsley Eremionkhale, disclosed this during the company’s 10th anniversary in Lagos recently.

He reiterated that the bank was committed to supporting the growth of small and medium-scale enterprises in the country.

“Since inception, we have disbursed loans worth about N16bn. Our operation is not just about profit-making, but we have impacted many lives, empowered many businesses, and done a lot in terms of our core mandate as a microfinance bank.”

While appreciating its customers who had been loyal to it for years, he said it was concerned about their business success.

The managing director said, “We are part of our customers’ businesses. We provide services beyond lending and savings products and we also give financial advisory services.”

He appreciated the customers who had stayed with the financial institution for many years.

The managing director noted that the MfB is a state-licensed bank operating in Lagos, and a subsidiary of Capitalfield Investment Group.

He also attributed the success of the MfB to the board of directors which it said had been supportive, the management team and its workforce in the past 10 years.

While saying that the bank could lay claims to exponential growth, he said the public should expect more from it.

He also said that it was driving its operations through its digital offerings and our e-channels, to improve its services to our customers.

Continue Reading

Finance

FMDQ Approves Valency Agro’s N5.12bn Commercial Paper

Published

on

FMDQ

FMDQ Approves Valency Agro’s N5.12bn Commercial Paper

FMDQ Securities Exchange Limited has announced the approval of the quotation of the Valency Agro Nigeria Limited N5.12bn Series 1 Commercial Paper under its N20bn CP Programme on its platform.

The Exchange said in fostering the development of the Nigerian debt capital markets, it had continued to avail its credible and efficient platform as well as tailor its listings and quotations services to suit the needs of issuers and registration members through innovative and uninterrupted service delivery.

It said in a statement on Thursday that the Valency Agro Nigeria CP debut issue came at a time when the Nigerian economy was bedeviled with soaring food prices, amidst compounding challenges of insecurity.

It said the agricultural sector and its attendant transformation agenda had never been more important in driving increased and sustainable production of agricultural products as well as the derived foreign earnings through exports.

The Exchange said the proceeds from the issue of the CP would be applied by Valency Agro towards meeting the mid-term working capital requirements of the various agricultural produce under its portfolio such as cashew, sesame, cocoa and in value addition prior to export.

The Executive Director, Valency Agro Nigeria Limited, Mr Sumit Jain, was quoted as saying, “We are thankful to our investors towards showing their faith in our agenda to grow the agriculture-focused business with a clear aim to maximise value addition and create employment opportunities in Nigeria.

“We would also like to commend the efforts made by FBNQuest Merchant Bank Limited’s team to build the reach and FMDQ for their unconditional support for the industry”.

The Head, Capital Markets, FBNQuest Merchant Bank, Mr Oluseun Olatidoye, said, “FBNQuest Merchant Bank Limited is delighted with the successful debut of the N5.12bn Series 1 CP issued by Valency Agro Nigeria Limited. This reiterates our effort to enable underserved sectors access the debt markets, optimise their capital structure and further deepen the domestic capital markets.

“We are proud of the instrumental role FBNQuest Merchant Bank played in this transaction and appreciate the trust the management of Valency Agro placed in us to assist them. Our clients remain our priority, and we strongly believe their success is our success.”

Continue Reading

Trending