African Export Import Bank (Afreximbank) has announced the disbursement of a US$150 million finance facility to First Bank of Nigeria Limited, Nigeria’s premier and leading financial inclusion services provider.
The funding was provided under Afreximbank’s Pandemic Trade Impact Mitigation Facility (PATIMFA).
Afreximbank’s US$150 million financial support will be accessible to FirstBank customers that are involved in the manufacturing and importation of products and equipment required to combat the COVID-19 pandemic, as well as initiatives to rehabilitate hospitals and strengthen diagnostic and testing capacity. The loan will also be used for the financing of trade debt payments falling due to avert payment defaults in trade debt obligations. In addition, proceeds of the facility will help beneficiary businesses manage the impacts of the Ukraine crisis.
Professor Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, commented: “This new disbursement under PATIMFA is a further proof of the relevance of the programme in helping African economies to recover from the crisis induced by the COVID-19 pandemic. Since April 2020, when PATIMFA was launched, we are more than proud to have disbursed more than US$7 billion to help Afreximbank member countries manage the adverse impact of the financial, economic and health shocks caused by the COVID-19 pandemic. Through First Bank, one of our trade finance intermediaries, this $150 million facility will help build the resilience of many businesses to the adverse impacts of the pandemic, while helping them overcome the consequences of the current Ukraine crisis.”
Also expressing his delight in the partnership, Dr. Adesola Adeduntan, FirstBank’s CEO, said: “We commend Afreximbank for this impactful financial response. It will immensely contribute to empowering many businesses adversely impacted by the economic shocks caused by Covid-19. The selection of FirstBank as a partner in this initiative is a testament to their confidence in our capacity and proven track record over the years.
As a Bank that has been woven into the fabric of our society for over 128 years, we remain committed to the success of businesses in our host communities and ensuring they are given the needed boost to sustain their operations and further drive economic growth in the nation.”, he concluded.
FirstBank UK Enhances Fixed-Income Workflow Through Bloomberg Integration
FirstBank UK, the UK subsidiary of First Bank Nigeria Limited, has announced its onboarding on Bloomberg’s Trade Order Management System (TOMS) to enhance its fixed-income workflow.
The integration with TOMS is expected to provide FirstBank UK with access to a comprehensive suite of data and analytics, communications, order, and execution management solutions, streamlining its fixed-income bonds business.
As a niche market-maker for its customers in Africa, FirstBank UK plays a vital role in providing market liquidity in cash bonds, particularly in Nigerian, Angolan, Egyptian, and Ghanaian Eurobonds, to manage risk and optimize its inventory.
Olukorede Adenowo, CEO-designate at FirstBank UK, expressed enthusiasm about the integration, stating, “Bloomberg TOMS provides FirstBank UK with a complete end-to-end trading workflow covering African bonds in most of our home markets. The solution enables us to focus on expanding our footprint in the African Fixed Income landscape and deliver a first-in-kind service to our customers in Africa.”
Bloomberg’s TOMS is renowned for enhancing operational efficiency across enterprises. Lisa Bravo, Global Head of Sell-Side OMS at Bloomberg, commented, “We are pleased to help FirstBank UK enhance operational efficiency across its enterprise with our award-winning sell-side order management solution TOMS.”
FirstBank UK had previously digitized its order management workflow by offering clients access to liquidity on its Eurobond Single-Dealer Platform.
The recent integration with Bloomberg TOMS aims to centralize order handling, aggregated custom analytics, and liquidity tools within a single interface, facilitating real-time access to liquidity for customers.
Robert Hagenaars, Head of Markets at FirstBank UK, highlighted the unique feature of real-time access to liquidity in their markets, providing a distinct advantage for their customers.
This move signifies FirstBank UK’s commitment to leveraging advanced technological solutions to fortify its position in the African Fixed Income market and deliver enhanced services to its clientele.
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Nigerian Bank Shares Surge as Central Bank Signals Capital Buffer Strengthening
Investors Respond Positively to Anticipated Capital Raising Measures
Nigerian bank shares experienced a surge on Monday as investor sentiment rose following the central bank’s announcement that banks should increase their capital to cushion against economic uncertainty.
FBN Holdings Plc led the way with a 10% increase to N22 per share, its highest-a-day increase in five months.
Access Holdings Plc and Sterling Financial Holdings Plc also joined the upward trend, recording gains of 4.3% and 5%, respectively.
The banking index, which gauges the performance of the country’s major lenders, rose 1.7% to 754.95, reflecting the most significant increase in almost a month.
Investors are interpreting the central bank’s directive as a precursor to potential capital-raising initiatives by banks.
Joshua Odebisi, a bank equity analyst at RMB Nigeria Stockbrokers, stated, “Investors are anticipating a few things that can happen, such as capital raising, which has potential upside for those taking a position now.”
He highlighted FBN as having significant room to fulfill higher capital requirements that the central bank might set.
Central Bank Governor Olayemi Cardoso announced the need for banks to raise additional capital as a safeguard against the challenges posed by the weaker naira and sluggish economic growth.
While specific details were not provided in the announcement, the industry expects forthcoming guidelines that may involve an increase in minimum shareholders’ equity and adjustments to capital adequacy ratios.
The move aligns with a broader industry trend of reinforcing capital buffers amid naira depreciation.
FBN had previously gained shareholder approval for a rights issue to raise up to 150 billion naira in fresh equity.
The central bank’s emphasis on capital strengthening comes as the Nigerian currency has experienced a 40% depreciation against the dollar since the easing of foreign-exchange controls in June.
FBN’s capital adequacy ratio stood at 16% in the third quarter, closely approaching the 15% minimum threshold for international banks.
In comparison, Access Bank reported a ratio of 19.6%, indicating a stronger position relative to regulatory requirements.
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