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Bank Loans, Collateral to Rise in Q1 –CBN

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  • Bank Loans, Collateral to Rise in Q1 –CBN

Companies of all sizes will demand more loans during the first quarter of 2018 and commercial banks have indicated plans to demand more collateral, the Central Bank of Nigeria Credit Conditions Survey Report has revealed.

The report also disclosed that the Deposit Money Banks in the country recorded higher default rates on credit card loans and personal/overdraft loans during the last quarter of 2017.

The CBN Credit Conditions Survey Report covered the secured and unsecured lending activities of banks to households and companies during the fourth quarter of 2017 and the DMBs’ expectation for the first quarter of 2018.

The report, which was obtained by our correspondent on Sunday, read in part, “More collateral requirements were demanded from all firm sizes on approved new loan application in Q4 2017. Similarly, lenders will demand for more collateral from all firm sizes in the next quarter.

“Demand for corporate lending from small businesses, medium and large PNFCs increased in the current quarter, and were also expected to increase in the next quarter. Demand for overdrafts/personal loans in Q4 2017 was higher in comparison with other loan types. The most significant factors that influenced demand for lending in the review quarter were the increase in inventory finance and capital investment, and they were expected to remain the main drivers in the next quarter.”

On credit card and personal loans, the CBN report said, “Lenders experienced higher default rates on credit card and overdrafts/personal lending to households in the current quarter. They however, expect improvement in default rates in the next quarter. Losses given default on total unsecured loans to households worsened in Q4 2017 but were expected to improve in the next quarter.”

According to the CBN, the DMBs reported that spreads on credit card lending narrowed in Q4 2017 and was expected to remain narrow in the next quarter.

The survey added that spreads on unsecured overdrafts/personal loans on approved new loan applications narrowed in the last quarter and was expected to further narrow in the next quarter. Overall, spreads on unsecured lending narrowed in the last quarter, and was expected to narrow in the next quarter, the CBN report stated.

“Maximum maturities on approved unsecured new loan applications were shortened in the current quarter, and lenders anticipated that they will remain shortened in the next quarter,” it added.

The survey by CBN noted that overall availability of credit to the corporate sector increased in fourth quarter of 2017 and was expected to increase in first quarter of 2018.

The report said this was driven by brighter economic outlook, market share objectives, favourable liquidity conditions and tight wholesale funding conditions.

It added, “Changes in spreads between bank rates and MPR on approved new loan applications to the small businesses and OFCs narrowed in fourth quarter of 2017, while that of medium and large PNFCs widened. Spreads were expected to narrow for small businesses but widen for all other business sizes in first quarter of 2018.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Banking Sector

Access Holdings Plc Plans $1.8 Billion Capital Raise

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Access Holdings Plc, the parent company of Nigeria’s leading bank, Access Bank Plc, has unveiled ambitious plans for a $1.8 billion capital raise aimed at fueling its expansion efforts over the next four years.

The strategic move comes as Access sets its sights on becoming one of the largest lenders on the African continent.

During a conference call with investors in Lagos, executives outlined the company’s intention to raise $1.5 billion, or the naira equivalent, through the issuance of shares, bonds, or other financial instruments.

Also, Access aims to generate up to 365 billion naira ($257 million) by selling shares to existing investors.

Bolaji Agbede, acting group chief executive officer, clarified that the current fundraising initiative primarily involves a rights issue.

The capital infusion is earmarked to support Access’s ambitious growth plan, which commenced last year.

The bank intends to expand its footprint into new markets, including Morocco, Egypt, and the United States, as part of a broader strategy to double the share of assets outside its home market by 2027.

With operations spanning 22 countries, including the United Arab Emirates and the UK, Access Bank is positioning itself for significant international growth.

The recent appointment of Bolaji Agbede as acting group CEO follows the passing of co-founder and former CEO, Herbert Wigwe, adding a layer of significance to the bank’s future direction.

Access’s acquisition of National Bank of Kenya Ltd. underscores its commitment to expanding its presence in East Africa’s largest economy.

As Access Bank charts its course for expansion, the $1.8 billion capital raise signals its determination to seize opportunities in a rapidly evolving financial landscape, both domestically and across the African continent.

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Finance

OPEC+ Production Cuts and Geopolitical Tensions Propel Oil Price to Over $87

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Crude oil - Investors King

Oil price surged past the $87 price level on Thursday on the back of production cuts by OPEC+ nations and escalating geopolitical tensions.

Brent crude oil, against which Nigerian oil is priced, rose by $1.39 or 1.6% to $87.48 a barrel, its highest level since October 27.

OPEC+, the alliance of major oil-producing nations, has remained resolute in its commitment to curtail output, effectively tightening the supply of crude in the market.

Despite calls for increased production to alleviate soaring prices, the alliance has opted to maintain its course, further buoying the market sentiment.

Simultaneously, geopolitical tensions have added fuel to the fire. Attacks on Russia’s energy infrastructure, particularly by Ukraine, have sparked concerns over potential disruptions to the global oil supply chain.

Despite diplomatic efforts to deter such actions, the situation remains precarious, contributing to market anxieties.

Analysts suggest that these price surges may have long-term implications for global economies, particularly for oil-importing nations heavily reliant on stable energy prices.

Furthermore, the impact of rising oil prices on inflation and consumer spending patterns remains a point of contention among economists and policymakers.

As the world watches with bated breath, the trajectory of oil prices hinges on a delicate balance between geopolitical developments, OPEC+ policies, and the broader economic landscape.

For now, the $87 threshold serves as a stark reminder of the volatility and interconnectedness inherent in the global energy markets.

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Insurance

Heirs Insurance Group Unveils Revolutionary Website for Seamless Insurance Experience

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Heirs Life Assurance- Investors King

Heirs Insurance Group has launched a website designed to revolutionize the insurance experience for its customers.

With a focus on simplicity, accessibility, and personalized service, the new website aims to streamline the process of obtaining insurance coverage and empower customers to make informed decisions about their insurance needs.

The website boasts a range of innovative features that make navigating insurance options easier than ever before.

From simple and intuitive navigation menus to personalized insurance recommendations, the website is designed to guide customers through every step of the insurance process quickly and efficiently.

According to Ifesinachi Okpagu, the Chief Marketing Officer of Heirs Insurance Group, the new website embodies the company’s commitment to delivering exceptional customer service.

“Today’s customers want simplicity, and this new website delivers on that request,” Okpagu said. “We are empowering customers to take control of their lives, their businesses, assets, and their most cherished people.”

One of the key features of the website is its personalized insurance experience, which takes customers through a short journey to help them identify the best insurance plan for their needs.

Whether customers are looking for coverage for their home, car, business, or loved ones, the website provides tailored recommendations to ensure they find the right insurance solution quickly and easily.

With its user-friendly interface and innovative features, the new website from Heirs Insurance Group sets a new standard for the insurance industry, making it easier than ever for customers to protect what matters most to them.

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