Like United Bank for Africa, Zenith Bank has also halted international Automated Teller Machine (ATM) cash withdrawals and POS transactions on all Naira cards, the bank disclosed in a statement forwarded to all customers on Wednesday.
For web transactions, the leading lender reviewed downward its monthly limit from US$100 to US$20, attributing the decision to the current economic realities of Nigeria.
The announcement was made during a record-high oil price, the only viable means by which the Nigerian nation generates foreign exchange necessary to service its import-dependent 200 million nation.
However, Africa’s largest economy and the continent’s largest exporter, is not expected to profit from the surge in global oil prices. This is because of Nigeria’s economic structure and lack of refineries. Hence, why Nigeria imports finished petroleum products from overseas.
The Federal Government has to subsidize imported fuel so that majority of Nigerians without constant electricity, transporters and other fuel users can afford it.
Sadly, this increase in crude oil prices means, the landing cost per litre will increase. Therefore, Nigeria’s profit from crude oil will be used to pay for subsidy, or Nigerians battling with a 33.33% unemployment rate, high inflation, low new job creation and weak wage growth will not be able to afford it.
A few weeks ago, it was the United Bank for Africa Plc that halted international spending on Naira cards while the Central Bank of Nigeria launched a N65 per dollar rebate scheme to lure exporters to Investors and Exporters forex window. On Tuesday, the First Inland Revenue Service announced a one-month concession to allow companies with dollar tax liabilities to pay in Naira due to forex scarcity. All these point to one thing, there is no forex.
As stated in my UBA article, “Given that the announcement was made on the day Russia attacked Ukraine and bolstered global risk to the highest level in recent years, UBA may be responding to possible forex challenges that lie ahead, especially with Nigeria’s inability to capitalise on the current rise in global oil prices due to her weak oil production infrastructures.”
Zenith Bank, however, concluded with “If you have higher international spending requirements, simply visit any of our branches and request for a foreign currency debit or prepaid card, which are available in US Dollar, Pounds and Euro variants.”
Ecobank Reports $401 Million Before Tax in Nine Months to September 2022
Revenue grew by 7% from $1.26 billion in recorded the same period of 2021 to $1.35 billion in the period under review.
Ecobank Group on Thursday reported a 7% increase in revenue for the nine months ended September 2022, the leading financial institution announced in its audited financial statement.
The bank’s operating profit expanded by 12% to $593 million, up from $528 million filed in the corresponding period of 2021, Investors King reports.
Profit before tax rose to $401 million, a 14% increase from $352 million achieved in 2021. Profit paid to shareholders grew by 7% from $182 million to $196 million.
Gross loans and advances to customers increased 5% from $9.469 billion to $9.917 billion. Similarly, deposits from customers increased by declined by 2% to
Commenting on the bank’s performance, Ade Ayeyemi, CEO, Ecobank Group, said: “We continued to deliver on our strategic priorities and are on track to meet full-year targets despite the complex operating environment. Group-wide return on tangible equity reached a record 21%, and profit before tax increased by 14%, or 48% at constant currency (i.e., excluding currency movements).
“These results reflect the resilience, strong brand and diversification of our pan-African franchise. We saw decent client activity in consumer and wholesale payments, trade finance and foreign currency markets. Additionally,
despite inflationary pressures, we maintained a tight lid on costs, thereby improving our cost-to-income ratio to 56.3% from 58.3% in the previous year.
“The dampened economic outlook necessitated maintaining a sound balance sheet with adequate levels of liquidity and capital. As a result, our total capital adequacy ratio at 14.4% is well above our internal and minimum regulatory limits. Also, we hold sufficient gross impairment reserves that fully cover our non-performing loans. Moreover, we have fully repaid the five-year $400 million convertible debt we issued in September and October of 2017.
“Ecobankers have worked extremely hard to serve our customers’ financial needs, and I am proud of them. As always, we will passionately work towards realising our vision and remaining the bank that Africa and friends of Africa trust.”
Insider Dealing: Hafiz Mohammed Bashir Acquires 37 Million Shares in Unity Bank
Alhaji Bashir carried out the acquisition in 32 different transactions at an average price of N0.51 a unit between November 8th and 11th 2022
The management of Unity Bank Plc has announced that a non-Executive Director, Hafiz Mohammed Bashir scooped 37,681,947 shares of the bank.
The transaction was disclosed in a statement signed by the bank’s secretary, Alaba Williams.
Alhaji Bashir carried out the acquisition in 32 different transactions at an average price of N0.51 a unit between November 8th and 11th 2022, according to the disclosure available on the Nigerian Exchange Limited (NGX).
Insider dealing is the buying or selling of a company’s shares by someone with a piece of insider information not available to the public. Insider dealing is illegal in the U.S. but not in Nigeria as long as it’s disclosed.
The Nigerian Security and Exchange Commission (SEC) mandated all listed companies to disclose insider trading to enforce transparency across the nation’s Exchange market.
Also, insider dealings can help stakeholders and retail investors assess the confidence of top company executives in a listed company. While Alhaji Bashir’s acquisition could demonstrate his trust in the future of the company, it could also mean positioning ahead of a major company’s event given his position.
Hafiz Mohammed Bashir Profile
In 2017, Hafiz Mohammed Bashir was appointed as a Non-executive Director following the Central Bank of Nigeria’s approval.
Hafiz Mohammed Bashir is an accomplished professional with vast experience in the public and private sectors. He retired at the apex of Local Government Administration in Katsina State in 1992 and has chaired the Board of many companies – including Fiztom International Ltd, HafadGlobal Resources limited and Fiziks Nigeria limited.
Alh. Hafiz who is currently in private business holds a Post Graduate Diploma in Management from Abubakar Tafawa BalewaUniversity, Bauchi, and an Advance Diploma in Public Administration from the University of Jos, a higher Diploma in Local Government Administration- AhmaduBello University. Zaria and Diploma in Insurance from ABU, Zaria He is also currently undergoing a Master’s programme in Business Administration at the Business School of the Netherlands.
See the details of the transactions below.
McKinsey Global Banking Annual Review: Banking on a Sustainable Path
African banks have experienced a strong recovery in profitability, with average ROEs up from 12% in 2020 to 15% forecast for 2022
McKinsey has released its yearly state of the industry report providing an in-depth look at banking in today’s volatile environment and its future prospects.
This year marked the biggest shift in global banking for over a decade, providing banks with both the opportunity (from higher margins and the fintech correction) and the need (as a result of macroeconomic volatility and growing sector divergence) to master a dual challenge: maintain resilience in the short term while accelerating the transformation into a future-proof, sustainable value creation model.
The divergence in performance between leading banks and the rest continues to grow. Despite higher margins from rising interest rates and a stronger capital position, more than half of the world’s banks continue to struggle with profitability and have a return on equity that is below their cost of capital. But all banks can focus now on improving their short-term resilience and preparing for longer-term opportunities. The report examines strategies that have allowed some players to rise above the fray and outperform.
Among the opportunities is sustainable finance, which is on the cusp of a “next era” as banks finance not just clean energy but a broad array of transformational low-carbon projects across industry sectors. Debt-focused investment supporting the transition to net zero alone could represent revenue potential for banks of at least $100 billion annually by 2030.
What this means for African Banks
In line with banks globally, African banks have experienced a strong recovery in profitability, with average ROEs up from 12% in 2020 to 15% forecast for 2022. This could mean relatively stable ROEs for African banks over the next 5 years despite global macroeconomic shocks. But there is also significant variance across the continent, with banks in Nigeria and Kenya, in particular, trading at price-to-book ratios well below 1, Morocco trading over 1, and South Africa well over 2 on average (amongst the highest in the world).
“This boost in profitability gives African institutions the breathing room to improve their short-term resilience as we face the global challenges of continued geopolitical shocks. It also gives them the opportunity to continue investing in technology to enable growth,” says Francois Jurd de Girancourt, a partner in McKinsey’s Casablanca office, and leader of the firm’s Financial Institutions Group in Africa.
Africa could be one of the fastest growing regions for banking revenue globally (6-7% in local currency terms) in 2022—led by North Africa (9%) and West Africa (7%) with a revenue pool of ~$100bn. The picture is lower but remains positive if currency depreciation is taken into account. This growth is underpinned by deepening penetration of banking services and rising interest rates adding to opportunities in payments and transactional banking and is aided by the ongoing explosion of fintech activity across the continent.
“In Nigeria, agile and innovative startups are taking advantage of increased technology penetration and high levels of unmet needs in the traditional banking sector to seize market share. A youthful population, increasing smartphone penetration, and a focused regulatory drive to increase financial inclusion and cashless payments are all contributing to this shift,” says Edem Seshie, an associate partner, in McKinsey’s Lagos office.
Much like the rest of Africa and the world, sustainable finance in Nigeria is also entering the ‘next era’—shifting from a focus on renewables to a broader set of deployment across the energy transition.
Africa’s efforts to navigate the energy transition and adapt to climate change are likely to be supported by investor demand for sustainability-linked bonds, which have grown from 2% of bonds in 2017 to ~8% in 2022 (>$1.7bn of sustainability-linked bonds issued).
To fully take off, climate finance will require clearer definitions and better metrics. There are a number of opportunities across CIB, commercial and small-business banking, retail banking, and wealth and asset management. Examples of business building are emerging across geographies as banks recognize the capital need required to support the transition and the role the industry plays.
News3 weeks ago
Npower News: NASIMS Announced “Work Nation’s” Minimum Cut-Off Mark
Travel2 weeks ago
Nigerians Eligible For Residence Permit in Norway
News3 weeks ago
Npower News: Latest Update On Npower Payment for Beneficiaries
News1 week ago
Npower Batch C, Stream 2 Lament Non-Payment of Monthly Stipend
Travel2 weeks ago
Passengers Groan as Air Tickets Increase by More than 100%
News4 weeks ago
Npower Clarifies “Work Nation” Programme, State It is Optional
Startups1 week ago
5000 Startups From Nigeria, Kenya and South Africa Completed Google Training Programme
News2 weeks ago
Npower News: How to Resolve Failed August Payment Through NASIMS