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IMF Harps on Need to Step Up Fight Against Money Laundering

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  • IMF Harps on Need to Step Up Fight Against Money Laundering

Corrupt officials, tax cheats, and the financial backers of terrorism have one thing in common: they often exploit vulnerabilities in financial systems to facilitate their crimes, the International Monetary Fund (IMF) has noted.

IMF’s Managing Director, Christine Lagarde, stated this in an article on the fund’s blog.

According to Lagarde, money laundering and terrorist financing can threaten a country’s economic and financial stability while funding violent and illegal acts.

“That is why many governments have stepped up the fight against such practices, helped by international institutions such as the IMF. Measures against money laundering and the financing of terrorism, known by their acronym as AML/CFT, are designed to prevent the misuse of the financial system. They call for the detection, reporting, and confiscation of suspicious financial flows and for sanctioning of criminals.

These efforts have been part of the fund’s work for almost two decades—from analysis and policy advice, to country assessments against AML/CFT standards, to building institutional and operational capacity,” she added.

According to her, the IMF has contributed to the progress made so far by working closely with our members and the standard setter, the Financial Action Task Force (FATF).

But, she stressed that more work needed to be done to ensure that financial systems support needed economic growth without being misused. To achieve this, she highlighted three areas that must be given greater attention:

“First, we need to help countries intensify the fight against corruption and tax evasion. We will soon release new analysis that shows how systemic corruption can seriously undermine a country’s ability to deliver sustainable and inclusive growth.

“Large-scale tax evasion is also problematic, because it typically means less investment in health, education, and other public services. It also means higher economic inequality because the most vulnerable are most affected by lower social spending.

“AML/CFT measures can help break this vicious economic cycle. A good example is Greece, where the strengthening of the AML framework—with the help of the IMF—facilitated the seizure of hundreds of millions of euros in proceeds from tax crimes,” the IMF boss stated.

Secondly, she noted the need to promote more effective ways of combating the financing of terrorism. This means building on our experiences.

“Most recently in Sudan, we worked with the government to develop a framework for the implementation of targeted financial sanctions. But this is not enough. Governments need to increasingly harness the power of financial technology. While fintech can be misused—including through the anonymity of virtual currencies—it can also be a powerful tool to strengthen our defenses against terrorist financing.

“Think of machine learning and other artificial intelligence tools that could help detect patterns of suspicious financial flows, including very small transactions. And think of the “distributed ledger” technology that could help protect financial systems against cyber-terrorism.

“Third, we need to help ensure that small and fragile economies have access to correspondent-banking services that connect them to the global financial system. There has been a high degree of concern that global banks might cut their correspondent-banking business indiscriminately to minimise the risk of breaching AML/CFT rules.

“The good news is that FATF recently clarified regulatory expectations under the AML/CFT standard. This may reduce the likelihood of an indiscriminate withdrawal of correspondent-banking relationships,” she added.

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.

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Banking Sector

Fidelity Bank Doles Out N39 Million to 15 Lucky Customers

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Fidelity Bank Promo - Investors King

In yet another show of its commitment to reward loyal customers for maintaining a savings habit, leading financial institution, Fidelity Bank PLC has presented cash gifts worth N39million to lucky customers at the closing ceremony of the Fidelity Bank’s Get Alert in Millions (GAIM) Promo.

Held at Fidelity Bank’s head office in Lagos on Thursday, 29 July 2021, the well-attended event was conducted in the presence of relevant regulatory bodies including the National Lottery Regulatory Commission (NLRC), Lagos State Lotteries Board (LSLB), and Federal Competition and Consumer Protection Commission (FCCPC).

Speaking at the event, the Managing Director/Chief Executive Officer of Fidelity Bank, Mrs. Nneka Onyeali-Ikpe, ably represented by the bank’s Executive Director -Lagos and SouthWest, Dr. Ken Opara, reiterated the bank’s devotion to supporting initiatives that enrich the lives of its loyal customers even in times of economic uncertainties. She said “Encouraging savings and financially empowering our loyal customers have been a long-standing heritage at Fidelity Bank. We are elated at yet another opportunity to dole out up to N39Million to 15 Nigerians even in this time of economic uncertainty”. She further stressed the bank’s intentional drive towards enhancing CBN’s financial inclusion goal. “As a bank, we continuously position ourselves as key drivers for financial inclusion. Beyond encouraging savings, we believe that our GAIM campaign is a suitable initiative to attract the unbanked to the banking side of life”, Nneka added.

At the event, the duo of Mr. Sunday Okechukwu and Mr. Justine Nwaozor, who won the star prize of N10 million each were credited with their winnings. 13 other winners were credited with N3 million, N2 million, and N1 million accordingly; while 18 lucky customers walked home with consolation prizes including TV sets, refrigerators and generators.

Expressing his delight, a star prize winner, Mr. Sunday Okechukwu said, “I am grateful for this reward and most especially, the initiative. It’s common knowledge that having a healthy savings culture is good for one’s financial wellbeing, however, staying true to savings is sometimes difficult given the times we are in. However, with initiatives like this, savings become easier as we stand a chance to win big. I am glad to have won big, so big enough to turn my life and business around. Truly, Fidelity Bank keeps their word”.

Launched in 2019, Fidelity Bank’s GAIM Season 4 promo is a savings initiative of the bank specifically aimed at promoting a savings culture among Nigerians. Through this campaign, a total of N120 million has been seeded to several Fidelity Bank customers.

As a bank, we are pleased with the outcome of this initiative so far. Having wound up the fourth season of this campaign, it is exciting to see the number of people whose fortunes have changed. Although GAIM Season 4 is over, we will continue to drive initiatives that will, directly and indirectly impact the lives of our customers and Nigerians at large”, disclosed the Head of Savings and Sales, Fidelity Bank Plc, Mr. Ukpai Ibe.

Over the years, the leading tier two Bank has continued to intensify its efforts and innovate ways towards ensuring customer and stakeholder satisfaction. Through this promo, Fidelity Bank has promoted financial inclusion through digital channels and enriched the lives of its customers.

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Banking Sector

FCMB Group Posts 22.1 Percent Decline in Profit in H1 2021

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FCMB - Investors King

FCMB Group Plc, a leading financial institution in Nigeria, recorded a 22.1 percent decline in profit after tax in the first half (H1) of 2021 despite zero COVID-19 restrictions.

The lender gross earnings dipped by 4.02 percent from N98.179 billion achieved in the first half of 2020 to N94.228 billion in the period under review, the bank disclosed in its unaudited financial statements seen by Investors King.

Net interest income also moderated by 5.25 percent from N45.379 billion reported in H1 2020 to N42.998 billion in H1 2021. While net fee and commission income increased to N12.934 billion in the period under review, representing an increase of 33.51 percent from N9.688 billion achieved in the same period of 2020.

Net trading income drop from N3.925 billion in H1 2020 to N2.639 billion in H1 2021, this represents a decline of 32.78 percent.

Other revenue sheds 39.7 percent from N7.555 billion in H1 2020 to N4.552 billion in H1 2021. Profit before minimum tax and income tax decreased by 24.2 percent to N8.911 billion in H1 2021, down from N11.071 billion recorded in H1 2020.

The bank paid N450 million as minimum tax and income tax of N903.797 million to push profit after tax down by 22.1 percent from N9.701 billion in H1 2020 to N7.557 billion in H1 2021.

The lender realised N974.744 million from foreign currency translation differences for foreign operations. This brings the total comprehensive income for the period N8.545 billion.

Earnings per share dipped from N0.49 H1 2020 to N0.38 in H1 2021.

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Banking Sector

Ecobank Grows Profit After Tax by 29 Percent to N62.6 Billion in H1 2021

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Ecobank - Investors King

Ecobank Transnational Incorporated, a leading lender in Nigeria and across Africa, grew gross earnings by 13 percent to N442.9 billion in the first six months ended June 30, 2021.

The bank disclosed in its unaudited financial statements released through the Nigerian Exchange Limited and seen by Investors King on Monday.

Revenue expanded by 15 percent to N334.9 billion in the period under review while operating profit before impairment charges rose by 33 percent to N138.3 billion.

The bank grew profit before tax to N85.3 billion in the first half of 2021, up by 33 percent when compared to N64.133 billion recorded in the same period of 2020.

Profit after tax increased by 29 percent to N62.6 billion, up from N48.535 billion recorded in the corresponding period of 2020. Total assets expanded by 6 percent to N11.022 trillion with loans and advances rising by 7 percent to N7.861 trillion.

However, total equity was down by 1 percent to N803.2 billion.

Speaking on the bank’s performance, Ade Ayeyemi, Ecobank Group CEO, said: “We saw continued and sustained resilience in our performance, which is indicative of the success of our ‘execution momentum’ drive. As a result, we generated a return on tangible equity of 16.1% versus 15.2% a year ago and increased diluted EPS and tangible book value per share by 19% and 6%, respectively. In addition, profit before tax increased 23% to $210 million.”

“Group revenues rose 7% to $825 million, despite the challenging operating environment with the third wave of coronavirus infections threatening economic recovery. Our diversified pan-African business model continued to rise to the challenge. Revenues grew 13% and 6% in our Commercial and Consumer businesses, while our focus on growing the trade business led to increased trade assets.

The slowly increasing business and spend activity drove a 20% rise in our Payments business’s revenue to $90 million. Deposits growth was strong, with total deposits now over $19 billion, an increase of $1.0 billion in the second quarter and $2.4 billion in a year, driven by our omnichannel strategy. Though loan growth remained
flat, we are focused on providing support to MSMEs for growth,” Ayeyemi added.

“I am proud of the team’s hard work in driving efficiency, which continues to reflect in our cost-to-income ratio of 58.7% ahead of guidance and progressing well toward our medium-term goal of approximately 55%. In addition, credit quality continued to be exceptionally strong. As a result, our NPL ratio of 7.4% is a substantial improvement from the prior year’s 9.8%, as we also build reserves to insulate the balance sheet with an NPL coverage ratio of 86.7% and pushing towards our nearterm target of 90%,” Ayeyemi continued.

“We successfully raised $350 million Tier 2 Sustainability Notes in June, the first-ever by a financial institution in sub-Saharan Africa and first to have a Basel III-compliant 10-year non-call 5 structure outside South Africa in 144A/RegS format. The Bond was 3.6 times oversubscribed, demonstrating strong confidence in the Ecobank Group and our commitment to the sustainability of our communities and their social needs. I am deeply grateful to all stakeholders and must thank our clients for continuing to put their trust in Ecobank for their diverse banking needs.” Ayeyemi concluded.

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