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Nigerian Banks Stop ATM Cash Withdrawal Abroad

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  • Nigerian Banks Stop ATM Cash Withdrawal Abroad

A number of Deposit Money Banks in the country have barred their customers from using debit and credit cards to withdraw dollars, euros, pounds and other foreign currencies whenever they travel abroad, investigation by our correspondent has revealed.

The development may put business and leisure travellers, who may need hard currencies to meet some obligations abroad, in a difficult situation.

Also, students who are studying abroad and often rely on withdrawing hard currencies with their Nigerian payment cards from Automatic Teller Machines abroad to meet certain needs may find the situation challenging.

Findings by our correspondent revealed that the naira volatility of the past year made many of the Nigerian banks to get their fingers burnt and the fear of losing heavily to possible future currency volatility was making them to exercise restraint in reactivating overseas ATM withdrawal services for their customers.

However, some banks, which are said to be having high risk appetite and some with partner banks overseas to make settlements easier, are having a smooth ride and as such, have reactivated the ATM withdrawal service overseas.

A top banker close to the development, who spoke to our correspondent under the condition of anonymity said, “Each bank has various reasons for not yet activating their overseas ATM cash withdrawal service. For some banks, they ran into losses last year when the naira fell and, as such, they are trying to minimise their risks now.

“For such banks, there is no plan to reactivate it. Some others banks are not ready to reactivate the service because they are trying to check customers who are doing round-tripping. It is for various reasons that the banks are not stopping yet.”

Findings by our correspondent revealed that while almost all the banks allowed customers to use their payment cards to do Point of Sale and web transactions overseas, a number of them had suspended their ATM cash withdrawals without indicating when they would resume.

It was gathered that Guaranty Trust Bank Plc, Fidelity Bank Plc, Stanbic IBTC Bank and Standard Chartered Bank Nigeria were among the lenders that had suspended their ATM cash withdrawal services.

When our correspondent put a call through to their customer service centres, the banks confirmed they had suspended the services without stating the reason and possible resumption plans.

The customer service personnel, however, said the PoS service abroad and Web services were available for customers to use.

Some bankers told our correspondent that in terms of volume, Nigerian banks were spending more in overseas settlements from PoS and Web than in ATM cash withdrawal.

They said the fear of money laundering by customers was a major reason why some banks had to stop ATM cash withdrawal overseas.

They also stated that for some banks, the settlement issues they had when the dollar was scarce last year was making them to limit their card usage abroad to only PoS and Web transactions.

Following the crash in global oil prices, the drop in Nigeria’s foreign exchange revenue and the resultant dollar scarcity that hit the economy had made the local banks to suspend the ATM cash withdrawal and the PoS services abroad. They also stopped web transactions.

However, following the improvement in forex supply early this year, some banks announced the resumption of the services.

Some of the banks that have resumed full services in these area include United Bank for Africa Plc and First Bank of Nigeria Limited. Similarly, Zenith Bank Plc, Ecobank Nigeria and Skye Bank Plc have announced that their customers can do the ATM cash withdrawal, the PoS and web transactions.

But some of the banks, which have yet to resume full services, claimed that the regulator was not giving them approval to do so.

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.

Banking Sector

Peter Obaseki Retires as Chief Operating Officer of FCMB Group Plc

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The Board of Directors of FCMB Group Plc has announced the retirement of Mr. Peter Obaseki, the Chief Operating Officer of the financial institution, with effect from March 1, 2021. He was also an Executive Director of the Group.

His retirement was approved at a meeting of the Board of the Group on February 26, 2021. This has also been announced in a statement to the Nigerian Stock Exchange (NSE) by the financial institution.

The Chairman of FCMB Group Plc’s Board of Directors, Mr Oladipupo Jadesimi, thanked Mr. Obaseki for his valuable service and excellent support to the Board for many years.

FCMB Group Plc is a holding company divided along three business Groups; Commercial and Retail Banking (First City Monument Bank Limited, Credit Direct Limited, FCMB (UK) Limited and FCMB Microfinance Bank Limited); Investment Banking (FCMB Capital Markets Limited and CSL Stockbrokers Limited); as well as Asset & Wealth Management (FCMB Pensions Limited, FCMB Asset Management Limited and FCMB Trustees Limited).

The Group and its subsidiaries are leaders in their respective segments with strong fundamentals.

For more information about FCMB Group Plc, please visit www.fcmbgroup.com.

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Banking Sector

COVID-19: CBN Extends Loan Repayment by Another One Year

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Central Bank Extends One-Year Moratorium by 12 Months

The Central Bank of Nigeria (CBN) has extended the repayment of its discounted interest rate on intervention facility by another one-year following the expiration of the first 12 months moratorium approved on March 1, 2020.

The apex bank stated in a circular titled ‘Re: Regulatory forbearance for the restructuring of credit facilities of other financial institutions impacted by COVID-19’ and released on Wednesday to all financial institutions.

In the circular signed by Kelvin Amugo, the Director, Financial Policy and Regulation Department, CBN, the apex bank said the role-over of the moratorium on the facilities would be considered on a case by case basis.

The circular read, “The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from nine per cent to five per cent per annum for one year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 pandemic on the Nigerian economy.

“Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.

“Following the expiration of the above timelines, the CBN hereby approves as follows:

“The extension by another 12 months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities.

“The role-over of the moratorium on the above facilities shall be considered on a case by case basis.”

It would be recalled that the apex bank reduced the interest rate on its intervention facility from nine percent to five percent and approved a 12-month moratorium in March 2020 to ease the negative impact of COVID-19 on businesses.

To further deepen economic recovery and stimulate growth, the apex bank has extended the one year-moratorium until February 28, 2022.

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Finance

MTN Nigeria Generates N1.35 Trillion in Revenue in 2020

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MTN Nigeria Grows Revenue by 15.1 Percent from N1.169 Trillion in 2019 to N1.35 Trillion in 2020

Despite the COVID-19 pandemic and challenging business environment, MTN Nigeria realised N1.346 trillion in revenue in the financial year ended December 31, 2020.

The leading telecommunications giant grew revenue by 15.1 percent from N1.169 trillion posted in the same period of 2019.

Operating profit surprisingly jumped by 8.5 percent from N393.225 billion in 2019 to N426.713 billion in 2020.

This, the telecom giant attributed to the surge in finance costs due to increased borrowings from N413 billion in 2019 to N521 billion in 2020.

MTN Nigeria further stated that the increase in finance costs was the reason for the decline in growth of profit before tax to 2.6 percent.

MTN Nigeria grew profit before tax by 2.6 percent to N298.874 billion, up from N291.277 billion filed in the corresponding period of 2019.

The company posted N205.214 billion profit for the year, a 0.9 percent increase from N203.283 billion recorded in the 2019 financial year.

Share capital remained unchanged at N407 million. While Total equity increased by 22.3 percent from N145.857 billion in 2019 to N178.386 billion in 2020.

MTN Nigeria’s market price per share increased by 61.8 percent from N105 to N169.90.

While market capitalisation as at year-end also expanded by 61.8 percent to N3.458 trillion, up from N2.137 trillion.

The number of shares issued and fully paid as at year-end stood at 20.354 million.

MTN Nigeria margins were affected by Naira devaluations and capital expenditure due to the new 4G network coverage roll-out.

Margins were adversely affected by the effect of naira devaluation and expenses associated with new sites’ roll-out to boost 4G network coverage in FY’20.

“On the former, we note that MTNN expanded the scope of its service agreement with IHS Holding Limited and changed the reference rate for converting USD tower expenses to NAFEX (vs CBN’s official rate previously). Thus, over the full-year period, the company’s operating margin contracted by 1.9 ppts YoY to 31.7%,” CardinalStone stated in its latest report.

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