- Foreign Reserves increased by $3.1 billion in May Despite COVID-19
The Nigerian foreign reserves rose in the month of May despite the economic headwinds brought about by COVID-19 pandemic and the drop in global oil prices.
The foreign reserves rose by $3.073 billion from $33.520 in April to $36.594 billion in May, according to the data released by the Central Bank of Nigeria. The reserves had plunged from $38 billion in January 2020 due to the weak global demand for crude oil and low oil prices.
Global demand for oil prices dropped by over 30 million barrels per day in April during the peak of COVID-19 lockdown. With refineries shut, oil-dependent nations like Nigeria were unable to sell crude oil or generate revenue despite their economic challenges.
According to a Reuters report, Nigerian unsold oil cargoes was about 60 in April, indicating the severity of the situation.
However, with several analysts projecting that the nation’s economy could contract substantially amid rising capital flight, the central bank was forced to devalue the Nigerian Naira to reduce capital flight and stabilise the Nigerian forex market.
That was after Godwin Emefiel, the governor of the CBN, said in November 2019 that the drop in the foreign reserves was not enough to create fear or devalue the Naira.
In 2020, he later said “The moderate recovery in crude oil prices would reduce the pressure on the external reserves and government revenue,” Emefiele said.
He, however, warned the government to urgently reduce its reliance on oil revenue by gradually diversifying the economy and improving tax collection.
He added that “Central to the committee’s considerations were the impact of the COVID-19 pandemic, the oil price shock and the likely short- to medium-term consequences on the Nigerian economy.”
“In particular, the committee acknowledged the gradual improvement in macroeconomic variables particularly the improvement in the equities market, the containment measures of the COVID-19 induced health crisis, as well as, the impact of the increase in crude oil price on the external reserves.”
Nigerians to Start Receiving Remittance Inflows in Foreign Currency Today
The Central Bank of Nigeria on Thursday announced that all arrangements have been perfected by both the International Money Transfer Operators (IMTOs) and the Deposit Money Banks to start paying diaspora remittances in foreign currency (US Dollar).
In a statement issued by the apex bank, Godwin Emefiele, the Governor of the Central Bank of Nigeria said the institution has engaged both the commercial banks and the IMTOs to ensure that Nigerians start receiving remittance inflows in foreign currency today.
The statement reads in part, “Following the announcement of these new policy measures, the Central Bank of Nigeria, in an effort to enable smooth implementation, engaged with the commercial banks and the IMTOs to ensure that recipients of remittance inflows are able to receive their funds in the designated foreign currency of their choice.
“As a result of these engagements which took place with major IMTOs and the DMBs, today, Thursday, December 3, 2020, the stakeholders have committed that they would deploy all the necessary tools to ensure that these measures become effective from Friday, December 4, 2020.”
Emefiele added that “I, therefore, seize this opportunity to announce to Nigerians both at home and in the Diaspora, that the policy of recipients receiving their monies from abroad kicks off on December 4, 2020. All the IT systems of these IMTOs (Western Union, Moneygram and Ria services) and the DMBs have been properly configured to begin remittance tomorrow, Friday, December 4, 2020.”
Ecobank Profit After Tax Declined by 298 Percent in Q3, 2020
Ecobank, whose official name is Ecobank Transnational Inc., reported a 298 percent declined in profit after tax for the third quarter ended September 30, 2020.
In the unaudited financial statements released through the Nigerian Stock Exchange, the leading lender’s profit after tax declined from N19.347 billion profit posted in the same quarter of 2019 to -N38.250 billion in the third quarter of 2020. Representing a decline of 298 percent.
Similarly, profit before tax dipped by 182 percent from N36.052 billion filed in the corresponding quarter to -N38.250 billion in the quarter under the review.
However, net interest income rose by 45 percent from N64.563 billion in 2019 to N93.621 billion in 2020. But the 163 percent plunged in other operating income from N77.939 billion in the third quarter of 2019 to -N4.505 billion in the quarter under review weighed on non-interest revenue by 1 percent to N77.229 billion.
Similarly, operating expenses rose by 12 percent to N106.321 billion, up from N94.526 billion. Net monetary loss arising from hyperinflationary economy rose from zero in the third quarter of 2019 to N8.817 billion in Q3 2020 with Goodwill impairment hitting N60.584 billion from zero in the corresponding quarter of 2019.
This, coupled with N8.762 billion tax dragged profit before tax to -N29.635 billion in the third quarter.
First Bank, GTBank, UBA, Others Generate N133.92 Billion from Electronic Payment in Nine Months
Rising investment in financial technologies and the growing adoption of electronic payments have earned 12 Nigerian banks a total sum of N133.92 billion in the first nine months of the year.
Billions spent in ensuring that bank customers have access to their funds and can perform financial transactions 24 hours a day paid off during the COVID-19 lockdown as many customers were able to maintain social distancing by carrying out financial transactions on numerous digital platforms.
Some of the electronic platforms banks generated revenue from in the first nine months were Automated Teller Machine transactions, USSD, online transfer, electronic bills payments, Remita, Point of Sale payments and agency banking, among others.
While some of the twelve banks were Access Bank Plc, First Bank of Nigeria Plc, First City Monument Bank Plc, Fidelity Bank Plc, Guaranty Trust Bank Plc, United Bank for Africa Plc and Sterling Bank Plc.
The other five were Jaiz Bank Plc, Union Bank of Nigeria Plc, Wema Bank Plc, Unity Bank Plc and Stanbic IBTC Plc.
A breakdown of the banks’ unaudited financial statements showed Access Bank’s revenue from electronic payments rose by 105 percent to N38.80 billion in the period under review, up from N18.96 billion posted in the same period of 2019.
First Bank’s electronic payment revenue stood at N34.59 billion, representing an increase of 0.5 percent over the N34.42 billion recorded in the corresponding period of 2019.
Similarly, fees and commissions FCMB earned from digital payments in the first nine months amounted to N6.62 billion, a 17 percent contraction from the N7.98 billion earned in the same period of 2019.
Jaiz Bank posted a 24 percent contraction on its electronic payment earnings from N406.65 million in 2019 to N309.55 million in the same period in 2020.
Also, Stanbic IBTC’s electronic earnings dropped by 15 percent from N2.49 billion posted in 2019 to N2.12 billion in 2020.
Fidelity Bank’s e-payments revenue contracted by 34 percent in the first nine months of the year to N1.74 billion, down from N2.63 billion in 2019. While GTBank posted a 26 percent decline in electronic banking income to N8.21 billion in the period under review, below N11.04 billion earned in the same period of 2019.
Union Bank Plc realised N5.34 billion from electronic payments charges in the first three quarters of the year. Meaning, the bank’s electronic payments decline by 5 percent to N5.6 billion.
For Sterling Bank Plc, electronic products earned the bank N4.31 billion in the very first nine months of 2020, again a reduction of 16 percent from N5.11 billion posted in the same period of 2019.
UBA Plc, Unity Bank and Wema Bank Plc generated N26.71 billion, N1.74 billion and N2.02 billion from electronic payment income, respectively.
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