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Emefiele Warns Banks Against Selling Dollar Above N360

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  • Emefiele Warns Banks Against Selling Dollar Above N360

The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, on Monday warned banks against selling dollars to eligible travellers above the stipulated price of N360.

The apex bank boss gave the warning during an inspection of banks in Abuja to monitor the rate of compliance with the circular issued last weekend to banks on the sale of forex.

The bank branches visited by the governor are Zenith Bank Plc in Maitama, First Bank of Nigeria Limited in the Central Area and United Bank for Africa Plc in Area 3.

The CBN had issued the circular to banks directing them to sell foreign exchange over the counter to eligible buyers, who walk into any bank regardless of whether they were customers of the bank or not.

To qualify to access foreign exchange under this regime, such eligible travellers must have in their possession valid travelling documents such as visas, passports and air tickets.

The CBN governor, who expressed satisfaction with the rate of compliance by the banks visited, said he would deploy examiners to continue with the on-site inspection of the lenders.

He stated, “During the weekend, there was a release from the Central Bank of Nigeria that all banks are mandated to sell foreign exchange to anybody that walks into their bank, whether it is a customer or non-customer of that bank. It is the banks’ primary responsibility to provide foreign currencies for travellers out of the country.

“So, all that you need is just your passport, visa and travelling ticket. You are not expected as a customer or non-customer to deposit your documents and go away; you are expected to be attended to over the counter.

“The essence of this visit is to see whether the banks are actually doing what we said they should do. I can say that I am happy, it hasn’t really hit the ground but I would have wished I see a long queue of people trying to buy BTA from the banks.”

Emefiele added that no bank should turn back any eligible traveller who had complied with the laid down requirements, adding that the CBN had given all the banks enough foreign exchange to meet genuine demands of travellers.

He said, “I seize this opportunity to tell all Nigerians that all the banks are stocked with foreign currency and they should not have any problem coming to a bank, and you will see a cubicle for BTA or Bureau De Change.

“You can go there and buy your dollar. The price is N360 to a dollar and you don’t have to be a customer. That is the essence of this. It is symbolic that I see for myself and we will also be talking to the management of the banks.

“We’ve visited three banks, First Bank, Zenith and lastly, UBA. Our examiners will continue the process of on the spot assessment to find out and be sure that people who are travelling get attended to at the counter.”

Emefiele said the essence of the inspection was to ensure that there was enough liquidity for any eligible traveller.

He added, “Nobody should just fall into the temptation of buying BTA or PTA from a bank at more than N360 to the dollar.

“The banks are entitled to their margin, because their margin has been built into it. You don’t have to pay any charge. It’s just N360 to the dollar.”

Some of the bank officials, who received the governor, said that they had fully complied with the directive of the apex bank.

For instance, the Executive Director, North, Zenith Bank Plc, Umar Ahmed, who received Emefiele at the bank’s branch in Maitama, stated that foreign exchange was sold to travellers at the price of N360 to a dollar.

He said, “We have been attending to customers. Currently, we have customers right now that foreign exchange are being sold to.

“The process takes less than five minutes to attend to a customer if all the travel documents are in place.”

When asked if there had been challenges with the implementation of the directive, he said, “We don’t have any challenge, it’s very seamless because the documentation requirements are very minimal and for every traveller, these are basic documents they should have.”

He said Zenith Bank had adequate foreign exchange to meet the demands of eligible travellers.

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

Fidelity Bank Launches N127.1bn Public Offer and Rights Issue on June 20

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Fidelity Bank Plc, Nigeria’s sixth-largest bank, is set to open its public offer and rights issue to investors on Thursday, June 20, 2024.

In preparation for this significant financial event, Fidelity Bank will host a “Facts Behind the Offer” presentation at the Nigerian Exchange Group (NGX) on the same day.

This presentation is expected to provide detailed insights into the bank’s strategy and the opportunities presented by the public offer and rights issue.

Under the rights issue, Fidelity Bank will offer 3.2 billion ordinary shares of 50 kobo each at N9.25 per share. These shares will be available to existing shareholders in the proportion of 1 new ordinary share for every 10 ordinary shares held as of January 5, 2024.

In addition to the rights issue, the bank will also offer 10 billion ordinary shares of 50 kobo each to the general investing public at N9.75 per share. This dual approach is part of the bank’s comprehensive strategy to raise a total of up to N127.1 billion.

The acceptance and application period for the rights issue and public offer will commence on Thursday, June 20, and close on Monday, July 29, 2024.

This timeline provides investors ample opportunity to participate in the bank’s capital expansion.

Fidelity Bank has engaged Stanbic IBTC Capital as the lead issuing house for the combined offer. The joint issuing houses include Iron Global Markets Limited, Cowry Asset Management Limited, Afrinvest Capital Limited, FSL Securities Limited, Futureview Financial Services Limited, Iroko Capital Market Advisory Limited, Kairos Capital Limited, and Planet Capital Limited.

These firms will play a crucial role in managing the offer and ensuring its success.

The bank’s initiative to raise N127.1 billion is seen as a strategic move to bolster its capital base and ensure compliance with the CBN’s revised capital requirements, which were introduced on March 28, 2024.

This capital raise is expected to enhance the bank’s capacity to support its growing customer base and expand its operations across Nigeria and beyond.

In recent years, Fidelity Bank has demonstrated robust financial performance and growth, positioning itself as a key player in Nigeria’s banking sector.

The successful completion of this public offer and rights issue will further solidify its standing and enable it to pursue new opportunities in the competitive financial landscape.

Investors and stakeholders are keenly anticipating the outcome of this capital-raising exercise, which is poised to mark a significant milestone in Fidelity Bank’s journey toward sustained growth and stability.

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Banking Sector

Fidelity Bank Plc Promotes 11% of Staff Following Record Financial Performance

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Leading financial institution, Fidelity Bank Plc has announced the promotion of 11% of its workforce, a testament to the exceptional performance and dedication of its employees.

This significant move follows the release of the bank’s 2023 full year Audited Financial Statements, which reported an impressive 131.5 percent growth in Profit Before Tax (PBT) to N124.26 billion.

The recent promotions span every level within the bank, reflecting Fidelity Bank Plc’s commitment to recognizing and rewarding excellence across its entire organization.

This strategic initiative has garnered positive reactions from staff members, who see it as a validation of their hard work and contribution to the bank’s remarkable financial achievements.

In addition to the promotions, Fidelity Bank Plc has also concluded arrangements to raise a total of N127.1 billion through a Rights Issue to existing shareholders and a Public Offer. This move is part of the bank’s broader strategy to strengthen its capital base, support future growth, and enhance shareholder value.

Fidelity Bank Plc’s impressive financial performance and the subsequent employee promotions highlight the bank’s robust operational strategy and its commitment to fostering a rewarding work environment. By investing in its people and ensuring their career growth, the bank continues to build a motivated and high-performing workforce.

Ranked as one of the best banks in Nigeria, Fidelity Bank Plc is a full-fledged customer commercial bank with over 8.5 million customers serviced across its 251 business offices in Nigeria and the United Kingdom as well as on digital banking channels.

The bank has won multiple local and international awards including the Export Finance Bank of the Year at the 2023 BusinessDay Banks and Other Financial Institutions (BAFI) Awards, the Best Payment Solution Provider Nigeria 2023 and Best SME Bank Nigeria 2022 by the Global Banking and Finance Awards; Best Bank for SMEs in Nigeria by the Euromoney Awards for Excellence 2023; and Best Domestic Private Bank in Nigeria by the Euromoney Global Private Banking Awards 2023.

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Finance

Nigeria to Receive $2.25 Billion from World Bank for Economic Growth

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The World Bank has approved a $2.25 billion funding package aimed at stabilizing the economy and assisting the most vulnerable segments of the population.

The Washington-based lender announced this approval on Thursday.

The fresh infusion of capital is designed to bolster Nigeria’s efforts to stabilize its economy, which has been plagued by years of foreign-exchange shortages and economic instability.

The funding will also focus on enhancing non-oil revenue streams and safeguarding oil revenues to ensure fiscal sustainability.

This, in turn, will help deliver quality public services and support the poor and economically at-risk communities.

Ousmane Diagana, the World Bank’s Vice President for Western and Central Africa, emphasized the importance of this financing package.

“Nigeria’s concerted efforts to implement far-reaching macro-fiscal reforms place it on a new path which can stabilize its economy and lift its people out of poverty,” Diagana said.

“This financing package reinforces the World Bank’s strong partnership with Nigeria, and our support towards reinvigorating its economy and fast-tracking poverty reduction, which can serve as a beacon for Africa.”

Since assuming office in May 2023, President Bola Tinubu has initiated a series of reforms aimed at addressing the chronic foreign-exchange shortages and stimulating economic growth.

Key measures include allowing the naira to trade more freely, significantly increasing interest rates, and phasing out a costly fuel subsidy by adjusting gasoline prices.

Also, the Central Bank has taken steps to clear a $7 billion backlog of unmet foreign-exchange obligations to industries and foreign investors.

These reforms are part of a broader strategy to attract foreign investment and diversify the economy, which has traditionally relied heavily on oil production.

Despite Nigeria’s status as Africa’s largest oil producer, low crude production levels and a lack of economic diversification have contributed to ongoing fiscal challenges and foreign-exchange shortages.

The World Bank’s funding is expected to provide much-needed support for these reform efforts, helping to stabilize the economy and improve the overall economic outlook.

The injection of $2.25 billion will not only address immediate fiscal needs but also lay the groundwork for sustainable economic growth and poverty reduction.

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