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Banking Sector

Analysts Foresee 8% Loan Growth for Banks in 2021



Analysts Foresee 8% Loan Growth for Banks in 2021

Analysts at CSL Stockbrokers Limited have predicted an eight per cent loan growth for the Nigerian banking sector in 2021.

The Lagos-based firm stated this in a report on its 2021 outlook titled: “Surviving Amidst Uncertainties.”

The firm pointed out that at the onset of the pandemic and the subsequent impact on the macro economic environment resulted in minimal loan growth for the banks.

It revealed that as of the first nine months of 2020, the banks under its coverage reported an average loan growth of 9.6 per cent, adding that banks were expanding their loan books to meet the Central Bank of Nigeria’s (CBN) minimum loan-to-deposit (LDR) ration.

However, it noted that the onset of the virus and the weak macro environment meant many banks had to slow down on loan growth despite CBN’s minimum LDR requirements.

“We forecast average loan growth of eight per cent for the banks under our coverage,” the firm added.

It stated that the CBN’s 65 per cent minimum LDR policy and its policy restricting individuals, PFAs and corporates to Nigerian Treasury Bills (NT-Bills), fixed deposits and FGN bonds resulted in a significant decline in asset yields for banks.

“With rates still at historic lows, we expect only a marginal improvement in yields as the year progresses.

“We expect improvement in non-interest income as banks strive to increase transaction volumes following CBN’s revised fee guide on electronic transactions which took effect in 2020.

“Banks were given a forbearance in 2020 ending to restructure loans. With the macro situation still poor, we expect some of these loans to begin to show signs of strain,” it added.

In its assessment of the economy generally, it noted that the Nigerian economy slumped into recession in 2020, occasioned by the headwinds associated with the Covid-19 pandemic.

It projected that the economy would contract by 2.7 per cent in 2020 and was projected to exit recession in 2021, supported by the gradual normalisation of economic activities, as the impact of the lockdown in 2020 continues to fade.

“We expect growth to be driven by the non-oil sector, supported by gains from agriculture and the telecommunication sectors, the combination of which accounts for about 38 per cent of the GDP basket.

“On the Oil sector, we see limited upside, as the output will remain undermined by OPEC cuts. We expect growth to reach 1.4 per cent in 2021.
“Downside risks to our forecast are linked to the lingering effects of the pandemic caused by the delayed distribution of effective vaccines,” it added.

Furthermore, it noted that consumer prices firmed in 2020, on the back of supply chain disruption emanating from the pandemic, forex restrictions, border closure and climate related shocks.

It also anticipated that inflation would maintain its ascent in 2021, with pressure expected from both the food and core baskets of the CPI.

“On the core inflation, we expect pressure from fuel subsidy removal and higher electricity prices. For food inflation, while decision to reopen the border is a positive development, food prices will remain elevated on continued insecurity challenges in food producing regions.

“Overall, we expect headline inflation to average 16.4 per cent in 2021, with year-end figure at 14.6 per cent.

“Nigeria’s external position worsened in 2020, as continued reliance on oil earnings and hot money has left the country vulnerable to shocks. Current account deficit is projected at 3.4 per cent of the GDP in 2020.

“In 2021, current account deficit will narrow, supported by a gradual recovery in global economic activities and firming crude oil prices.

“Against the foregoing, the current account gap for 2021 is estimated at $10.80 billionn (2.31% of the GDP).

“Financing these deficits may be challenging, as foreign portfolio investment flows are likely to slowly recover from last year’s troughs.

“Also, to correct the current BOP imbalances and pressure, we expect the CBN to devalue the currency,” it stated.

The naira was devalued across all the segments of the FX market in 2020, following the pressured external reserves amidst elevated FX demand and waned inflows.

“In 2021, with crude oil prices poised to improve alongside dollar dominated-budget facility from the World Bank, we expect the CBN’s monthly intervention to gradually increase to pre-pandemic levels of about $3.2 billion versus current levels of $1.4 billion,” it added.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.

Banking Sector

CIBN, NIBSS Introduce e-Payment Certification Programmes




CIBN, NIBSS Introduce e-Payment Certification Programmes

The Chartered Institute of Bankers of Nigeria (CIBN) in collaboration with Nigerian Interbank Settlement Systems Plc (NIBSS) have introduced professional certification programmes on electronic payments for financial service providers and institutions.

Both organisations disclosed that the programme was designed to enhance the electronic payment skills and knowledge of financial practitioners in order to equip them with efficient tools and information required to upscale innovation and services.

Speaking to journalists at a media briefing in Lagos, yesterday, the Chief Executive Officer, Chartered Institute of Bankers of Nigeria, Mr. Seye Awojobi, said the initiative is an international programme, well grounded in the local realities of the Nigerian e-payment industry and captures the current dynamics, as well as aspects of digital financial services practices.

“This programme would set the standards for e-payment expertise in Nigeria; foster a category of high performing professionals in the industry and build a resilient, safe and secured payment technology driven platform.

“The curriculum for the programme adequately covers recent methods required, which are in line with global practices.

“The introduction of the scheme cannot be more timely than now considering the COVID-19 pandemic, which created serious disruptions in our professional and personal lives,” he added.

On his part, Chief Executive Officer, Nigerian Inter-Bank Settlement Systems Plc, Premier Oiwoh explained that the introduction of the programme would determine the capacity and work experience criteria required to recognise beginners, intermediate and advanced.

“It would create a growth roadmap for fledging e-payment workers, including the unemployed who has the desire to make a career in the electronic sector.

“Also, it would enable us continue to tackle the issue of insecurity within the financial technology payment and banking space,” he added.

The institutions also noted that in order to maintain a certification credential, the practitioners must earn some recertification credits over a three year span and valid for three years after it has been issued.

The CIBN last week has reintroduced its mentoring scheme. The initiatives aims at up-scaling the leadership capacity and productivity of workers within the financial and banking sector.

Speaking during the virtual forum, Director General, Securities and Exchange Commission, Lamido Yuguda, had explained that mentoring schemes are essential for the sustenance and development of the sector as it is built upon values such as trust and professionalism.

“These values can be taught. But are reinforced when practiced by the senior co-workers and emulated by junior colleagues. Such initiatives enable workers to avoid being distracted by the material, prestigious and monetary incentives the space presents.

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Banking Sector

Mahe Mahmud Abubakar Retires as Deputy Managing Director Jaiz Bank



Jaiz Bank

Mahe Mahmud Abubakar Retires as Deputy Managing Director Jaiz Bank

The Board of Directors of Jaiz Bank Plc on Tuesday announced the retirement of Mr. Mahe Mahmud Abubakar as the Deputy Managing Director of the Bank with effect from February 16, 2021.

The bank disclosed in the statement signed by Rukayat O. Dahiru, Company Secretary/Legal Adviser and released through the nation’s stock exchange.

According to the lender, Mr. Mahe has attained 60 years’ retirement age.

The Board, therefore, thank Mr. Mahe for his meritorious service to the Bank.

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Banking Sector

Zenith Bank Declares N2.70k Final Dividend for 2020



Zenith Bank

Zenith Bank Declares N2.70k Final Dividend for 2020

Zenith Bank on Tuesday announced a final dividend of N2.70k per share of 50k for the financial year ended December 31, 2020.

The total dividend for the financial year now stood at N3.00k, Zenith Bank disclosed this in the statement released through the Nigerian Stock Exchange.

The amount is subject to appropriate withholding tax and approval. Payment will be made to shareholders whose names appear in the Register of Members as at the close of business on the 8th day of March, 2021.

Zenith announced Register of Shareholders will be closed on March 9, 2021.

The qualification date remains March 8, 2021.

On the payment date, the bank said payment will be made electronically on March 16, 2021 to shareholders whose names appear on the Register of Members as at March 8, 2021 and who have completed the e-dividend registration and mandated the Registrar to pay their dividends directly into their bank accounts. GDR holders will be paid subsequently.

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