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Banking Sector

African Development Bank Trains Experts from Development Finance Institutions

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Akinwumi Adesina - Investors King

The African Development Bank and the Association of African Development Finance Institutions (AADFI) jointly hosted a 3-day virtual workshop to train development finance experts in Africa on climate finance action strategy and management.

The training aimed to equip participants, particularly those from the financial and private sectors, with knowledge on how to scale up climate actions. Over 200 participants were able to gain a deeper understanding of the roles of national development finance institutions in climate risk management.

In his opening remarks, Al-Hamdou Dorsouma, Officer-in-Charge of Climate Change and Green Growth at the African Development Bank, stated: “This initiative and the Bank’s activities in mainstreaming climate finance is to strengthen African countries’ drive to realize their Nationally Determined Contributions (NDCs) goals. It will also boost partnerships and knowledge sharing on how to pull finance for various climate action projects.”

Davinah Milenge, Coordinator of the African Financial Alliance on Climate Change (AFAC) (https://bit.ly/34UQXbA) spoke about managing climate risks and the role of the AFAC. “The pan-African alliance aims to put the financial sector at the center of climate action in Africa. AFAC brings together Africa’s key financial institutions, including central banks, insurance companies, sovereign wealth and pension funds, stock exchanges, as well as commercial and development banks, to mobilize private capital towards continent-wide low-carbon and climate-resilient development.”

There were presentations and demonstrations of two business screening toolkits – the climate risk and opportunity toolkit and the business carbon footprints toolkit – which were developed by experts from Natural Eco Capital (https://bit.ly/2SfyT9l), which coordinated the workshop.

Dr. Eugene Itua, Chief Executive Officer of Natural Eco Capital, spoke on the importance of environmental, social and governance criteria in the financial sector. He explained how this aligns climate risk with the Paris Agreement.

Stefan Nalletamby, the Bank’s Director of Financial Sector Development, noted that climate change impacts were reshaping the way people viewed the environment and business. He said the workshop would provide delegates with enhanced knowledge of climate change-related risks, as well as tools to mitigate its impacts and an understanding of how to mobilize climate finance for organizational operations.

Nalletamby also announced that both the Bank’s Climate Change and Financial Sector Development teams are working together to develop a financial sector credit facility to scale up financial flows to green SMEs through financial intermediaries across the continent.

Patricia Ojangole, the AADFI’s first Vice Chairperson and Managing Director of the Uganda Development Bank, said while climate change causes major risks with cross-boundary effects, it holds opportunities, especially development finance institutions. Consequently, there is a need to prepare for its negative impacts and work to significantly mitigate its risks. She stressed that the gap experienced by African countries to solve related impacts could be bridged through adequate funding and skills in climate finance, which can be aided by scaling up capacity building.

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.

Banking Sector

Jaiz Bank Boosts Chairman’s Income to N24m Amidst Strategic Expansion

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Jaiz Bank

Jaiz Bank has announced a 20% increase in its chairman’s annual income to N24 million.

This decision was unveiled in a recent statement filed with the Nigeria Exchange Limited, highlighting the bank’s commitment to rewarding leadership amidst its expansion plans.

The bank, renowned for its pioneering role in non-interest banking in Nigeria since 2012, also approved a remuneration package of N20 million for each non-executive director.

The announcement was made by the bank’s secretary, Mohammed Shehu, highlighting the importance of competitive compensation for board members who provide crucial oversight and strategic guidance.

Shareholders at the Annual General Meeting (AGM) expressed confidence in the board’s leadership by approving the resolution on directors’ fees.

This move aligns with Jaiz Bank’s ongoing efforts to enhance its capital base to N70 billion by the end of 2024.

The bank also announced a dividend of 4 kobo per share, which will be distributed to shareholders on July 16, 2024.

This dividend declaration was welcomed as a testament to the bank’s operational success in a challenging economic climate.

Also, the AGM saw the re-election of Muhammadu Indimi and Muhammad Abdulmutallab as non-executive directors, reaffirming shareholder trust in their leadership capabilities.

Jaiz Bank’s financial performance has been impressive, with a 67% increase in profit before tax, reaching N11.1 billion in 2023.

Gross earnings also rose by 42% to N47.2 billion from the previous year, showcasing the bank’s successful growth strategy.

As Jaiz Bank continues to expand its services, the enhanced remuneration package signals a commitment to maintaining strong governance and leadership, paving the way for future achievements in ethical banking.

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Banking Sector

Nigeria Plans 50% Windfall Tax on Banks’ Currency Profits

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Central Bank of Nigeria (CBN)

Nigerian President Bola Tinubu has announced a one-time 50% tax on windfall profits that banks reaped from currency gains following last year’s naira devaluation.

This decision was part of the government’s strategy to navigate the ongoing cost-of-living crisis.

The naira, which has depreciated by about 70% against the dollar since foreign exchange rules were relaxed in June 2023, allowed banks holding dollar assets to significantly boost their income.

However, the Central Bank of Nigeria had advised lenders to retain these profits as a buffer against potential future losses.

The proposed tax will apply to the 2023 financial year, with non-compliance resulting in hefty fines.

The move has already impacted the NGX Banking Index, which fell by 1.3% as of midday trading in Lagos. Notable declines were seen in FBN Holdings Plc and Zenith Bank Plc, dropping 3.2% and 2.5% respectively.

This initiative mirrors similar actions in Europe, where countries like Italy and Hungary have imposed taxes on banks to address what they view as excessive profits during periods of high inflation and interest rates.

European banks have criticized these measures, warning of potential impacts on economic growth due to constrained lending capabilities.

President Tinubu’s administration believes this tax will help manage Nigeria’s fiscal challenges while addressing social needs.

Lawmakers are expected to support the measure, alongside a proposal to increase government spending by 6.2 trillion naira ($3.8 billion).

While banks have benefited from currency revaluations, many customers, particularly manufacturers with dollar-denominated loans, faced significant losses as they struggled with the weaker naira.

The new tax policy highlights the government’s broader efforts to stabilize the economy and attract foreign investment, aiming to ensure a more equitable distribution of financial gains.

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Banking Sector

Unity Bank Customers Win Over N4 Million in Cashtoken Rewards Promo

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Unity Bank customers have claimed over N4 million in cash rewards in its ongoing loyalty programme recently rolled out with Cashtoken, a Cash Reward-as-a-Service company.

The winners included no fewer than 40 customers who adopted and transacted on the Bank’s digital banking platforms, including the UniFi mobile banking application, the *7799# USSD platform or activated their Unity Bank Verve Card to transact on e-payment terminals across Nigeria.

Beginning from onboarding in our customer lifecycle journey, the Unity Bank Cashtoken Partnership commenced as a loyalty and reward scheme to reinforce the benefits of e-banking platforms. To begin, Customer transactions earn cash tokens, which are then redeemed to qualify for the monthly Cashtoken Rewards draw. Consequently, winners emerge from the draws to claim the cash prizes.

Recall that the retail lender announced the ongoing Cashtoken Rewards loyalty programme in December 2023 in partnership with Cashtoken Rewards Africa to empower customers and improve customer satisfaction. The partnership with Cashtoken Rewards also provided an opportunity for the Bank to migrate customers—old and new—to a platform that will continually create exciting rewards and appreciation for loyalty.

Eghomware Iyamu, Unity Bank’s Head of E-Business, commenting on the success of the Cashtoken Rewards loyalty program, stated: “We are excited to see our customers win over N4 million in cash rewards through our partnership with Cashtoken. This initiative demonstrates our commitment to recognizing and rewarding the loyalty of our customers”.

“By leveraging our digital banking platforms, including the Unifi mobile banking application and the *7799# USSD platform, we are not only enhancing customer experience but also providing life-changing opportunities. The Cashtoken Rewards program is a testament to our dedication to improving customer satisfaction and creating meaningful rewards along our customer lifecycle journey. We look forward to seeing more of our customers benefit from this exciting program as we continue to innovate and deliver exceptional value to them.”

Unity Bank has robust electronic banking products which include mobile and digital banking channels, including ATM, PoS, or any digital payment channels which support retail product transactions across the country. New-to-Bank customers are invited to open a Unity Bank account, onboard onto the digital platforms and begin transacting on the various platforms to earn cash token rewards and cash prizes while existing customers are encouraged to onboard and transact to win even more rewards and cash prizes.

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