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Stakeholders Demand CBN Report on Financial Market Status

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Godwin Emefiele CBN - Investors King
  • Stakeholders Demand CBN Report on Financial Market Status

Stakeholders in the financial industry have emphasised the need for the Central Bank of Nigeria to issue a report on the status of the financial market.

According to them, the collapse of Skye Bank Plc is darkening the outlook for Nigeria’s other small lenders struggling to recover from the economy’s contraction two years ago, and threatening to derail the regulator’s ambitions of expanding the industry, Bloomberg reports.

The CBN revoked Skye Bank’s licence for failing to meet capital and liquidity thresholds. The Lagos-based company’s battle to raise more cash as a buffer against potential shocks is playing itself out in other parts of the industry, with some of Skye’s peers resorting to the sale of bad loans or ditching business outside of Nigeria to clean up their balance sheets.

The Head, Research and Strategy, Elixir Investment Partners, said the CBN report on the health of the financial market would help improve investor confidence.

The CBN Governor, Godwin Emefiele, after a monetary policy meeting in Abuja on Tuesday, said the industry remained sound even though there would always be strong points and weak points in every chain.

He stated that the CBN was striving to ensure that there were more banks rather than having them liquidated.

“We are embarking on a journey to keep a bank alive, to protect depositors’ monies and also ensure that we do not throw over 5,000 staff of that bank into the labour market,” Emefiele had stated.

According to him, the regulator established Polaris Bank to take over the assets and liabilities of Skye and asked the Asset Management Corporation of Nigeria to capitalise the new entity with a view to eventually selling it.

Bloomberg reported that these actions were invoking memories of government bailouts after a credit crunch in 2009, when AMCON was set up to take on the bad debts and save the industry.

A banking analyst at FBNQuest Merchant Bank, Olubunmi Asaolu, told Bloomberg that while the country’s biggest lenders now had strong capital buffers as well as solid assets and earnings, developments with Skye showed that the industry consisted of a mix of stable and not-so-stable banks.

Asaolu added that the smaller banks had generally been closer to a precarious position than the market would like since the end of the last crisis in 2009.

“For anyone to invest in a tier two bank, they need to be convinced the opportunity is significant,” he noted.

Stress tests by the CBN showed that only the largest banks would withstand a 50 per cent increase in non-performing loans. The NPLs stood at 15 per cent at the end of June 2017 from 12.8 per cent at the end of December 2016.

The Chief Financial Officer, Unity Bank Plc, Ebenezer Kolawole, said the bank was trying to raise about N270bn ($743m) to recapitalise its operations after selling its bad-loans book.

He added that the bank hoped to conclude talks with an investor during the first half of 2019.

Shares in Wema Bank Plc have dropped by eight per cent since Skye Bank was seized a week ago, while Diamond Bank has declined by six per cent and Unity Bank by five per cent, Bloomberg reports.

Sterling Bank gained three per cent over the period.

A bank analyst at Vetiva Capital Management Limited, Lekan Olabode, said the central bank’s swoop on Skye Bank would result in shareholders losing money and would put a lot of fear in people about backing other small lenders.

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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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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Banking Sector

Safaricom, Access Holdings Forge Partnership to Revolutionize Remittance Corridor in Africa

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Access bank

Safaricom, the leading telecommunications company in Kenya, has entered into a strategic partnership with Access Holdings, spearheaded by Aigboje Aig-Imoukhuede.

The collaboration aims to revolutionize the remittance corridor between East and West Africa, marking a significant step towards enhancing financial inclusion and empowering millions of individuals across the continent.

The partnership comes on the heels of Access Holdings’ recent acquisition of the National Bank of Kenya Limited, signaling the company’s ambitious expansion into the East African market.

Leveraging Safaricom’s extensive network and expertise in mobile money through M-Pesa, which currently dominates the mobile money market in Kenya, the alliance seeks to create seamless and efficient channels for remittance transactions.

Aigboje Aig-Imoukhuede, the driving force behind Access Holdings, expressed enthusiasm about the collaboration, highlighting its potential to transcend traditional boundaries and foster greater economic connectivity between East and West Africa.

He highlighted the fusion of collective expertise and resources between the two entities, underlining their shared commitment to driving financial inclusion and empowerment across the continent.

The partnership holds promise for addressing the challenges faced by millions of Africans in accessing affordable and reliable remittance services.

By connecting more than 60 million customers and 5 million businesses across eight countries, the collaboration aims to facilitate over $1 billion in daily transaction value, significantly boosting the flow of remittances within and outside Africa.

With the first phase of the collaboration focusing on key markets such as Nigeria, Kenya, Ghana, and Tanzania, stakeholders anticipate a transformative impact on the remittance landscape, paving the way for greater intracontinental trade and economic integration in line with the objectives of initiatives like the African Continental Free Trade Area (AfCFTA).

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Banking Sector

EFCC Urged to Repatriate Recoveries to NDIC for Depositors’ Relief

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The Nigeria Deposit Insurance Corporation (NDIC) has made a fervent plea to the Economic and Financial Crimes Commission (EFCC) to expedite the repatriation of recovered funds to its coffers to facilitate the timely reimbursement of depositors affected by bank failures.

During a recent meeting between the Managing Director of NDIC, Bello Hassan, and the Executive Chairman of the EFCC, Ola Olukoyede, at the NDIC headquarters in Abuja, Hassan stressed the importance of enhanced collaboration between the two agencies in recovering depositors’ funds lost due to bank failures.

Hassan emphasized that the return of recoveries made by the EFCC on behalf of the NDIC would significantly contribute to the prompt reimbursement of affected depositors.

He commended the EFCC for its unwavering efforts in combating corruption and financial crimes, highlighting its crucial role as a key member of the Taskforce on Implementation of the Failed Banks Act chaired by the NDIC.

The NDIC boss also highlighted the existing partnership between the two organizations, which led to the establishment of the NDIC Help Desk at the EFCC in 2022.

He disclosed that several high-profile cases referred to the EFCC were currently under investigation.

In response, Olukoyede reiterated the EFCC’s commitment to collaborating closely with the NDIC to combat financial crimes and safeguard the integrity of the Nigerian banking sector.

He pledged to intensify efforts to repatriate recovered funds promptly, acknowledging the interconnectedness between criminal activities and bank failures.

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