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Senate Urges CBN to Extend Deadline on Old Naira Notes

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Naira Exchange Rates - Investors King

The Nigerian Senate has urged the Central Bank of Nigeria (CBN) to extend the withdrawal of old currency notes from circulation to June 30, 2023. 

Recall that the CBN announced the redesign of the N200, N500, and N1,000 notes in October. The apex bank also fixed January 31, 2023, as the deadline for the withdrawal of the old notes.

Moving the motion for extension in plenary on Wednesday, Senator Ali Ndume noted that the extension should be considered a matter of urgent national importance, stating that anything otherwise will compound imminent hardship on Nigerians.

“Some Nigerians are already envisaging long queues in the banking hall across the country as a result of people trying to get access to the new naira note.

“It is expected that many Nigerian businesses will start to rig the old notes as soon as banks start paying redesigned notes to customers”. 

Taking the senate back to 1984 when naira notes were redesigned, the senator said “the withdrawal of old notes from circulation if not extended beyond January 31, 2023, many Nigerians will be thrown into hardship and to avoid the repeat of 1984 experience withdrawal of old notes.”

Investors King learnt that the naira redesign policy of 1984 threw many businesses off as business owners could not sell for fear of receiving old bills which would be almost impossible to change to the new ones. 

Some business owners also closed their shops to join long queues at the bank while the short supply of new notes led to traumatic experiences for many. 

Contributing to the motion, Sen. Adamu Aliero stated that it was true rural dwellers were not aware of the currency redesign. 

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Banking Sector

UBA Announces Final Dividend of N2.30 per Share for FY 2023, Totaling N95.8 Billion

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UBA House Marina

UBA (United Bank for Africa) shareholders are set to receive dividends as the bank announces a final dividend of N2.30 per share for the fiscal year 2023.

This translated to a total payout of N95.8 billion, more than the N37.6 billion paid out in 2022.

Despite the robust increase in dividend payments, UBA’s dividend payout to profit after tax (PAT) ratio experienced a decline of 6.3 percentage points, dropping from 22.1% in 2022 to 15.8% in 2023.

Shareholders will receive the dividends based on their shareholdings as of the close of business on Friday, May 10, 2024. The payment is scheduled for May 24, 2024.

UBA urges shareholders who have not completed the e-dividend registration process to obtain the E-Dividend Mandate Form to ensure a smooth disbursement process.

The bank’s unclaimed dividends increased to N14.9 billion in 2023, an 18% increase from the previous year.

The bank reported a profit after tax of N607.7 billion, representing a 257% increase from the N170.3 billion recorded in 2022. This increase in profitability includes a net FX revaluation gain of N26.6 billion.

However, it’s worth noting that the Central Bank of Nigeria (CBN) directive prohibits banks from utilizing FX revaluation gains for dividends payment or operational expenses.

Shareholders are advised to complete the e-dividend registration process or contact the registrar, Africa Prudential Plc, for assistance regarding outstanding dividend warrants or share certificates.

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Finance

President Tinubu Launches National Single Window Project

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Bola Tinubu

President Bola Tinubu inaugurated the National Single Window Project to streamline trade processes and combat bureaucratic bottlenecks.

The initiative promises to unlock significant economic benefits and bolster Nigeria’s position as a global trade leader.

Addressing stakeholders at the Council Chamber of the State House in Abuja, President Tinubu outlined the transformative potential of the Single Window Project.

He explained that Nigeria stands to gain approximately $2.7 billion annually by implementing the initiative, while also saving an estimated $4 billion lost to inefficiencies and corruption plaguing the trade sector.

The National Single Window Project, codenamed a digital trade compliance initiative, will serve as a cross-government website facilitating trade by providing a unified portal for Nigerian and international trade actors.

This centralized platform will offer access to a full range of resources and standardized services from various Nigerian agencies, promising to expedite cargo movement and optimize inter-African trade.

President Tinubu’s directive to dismantle obstacles hindering trade efficiency reflects a commitment to fostering a transparent, secure, and business-friendly environment.

He underscored the urgency of eliminating red tape, bureaucracy, delays, and corruption at Nigerian ports, asserting that the economy cannot afford to sustain such losses.

The President’s call to emulate success stories from countries like Singapore, Korea, Kenya, and Saudi Arabia highlights the transformative potential of the Single Window system.

By joining the ranks of nations that have significantly improved trade efficiency through similar initiatives, Nigeria aims to unlock new avenues for economic growth and prosperity.

Tinubu stated that the National Single Window Project transcends Nigeria’s borders, presenting opportunities for regional integration and inter-African trade optimization. By linking Nigeria’s system with those of other African nations, the initiative seeks to expedite cargo movement and enhance trade facilitation across the continent.

Managing Director of the Nigerian Ports Authority, Bello Koko, provided insights into the practical implications of the Single Window initiative.

He affirmed that imports would be cleared at all seaports within 24 hours, a significant improvement compared to neighboring countries where clearance often takes up to 72 hours.

Koko outlined how the initiative would streamline paperwork, enhance information sharing among government agencies, and foster greater efficiency in trade transactions.

With representatives from key government agencies and bodies forming the project secretariat, the National Single Window Project reflects a collaborative effort to drive comprehensive reform in Nigeria’s trade sector.

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Banking Sector

Fidelity Bank Grows Profit by 131.5% in FY 2023

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Mrs. Nneka Onyeali-Ikpe, MDCEO of Fidelity Bank Plc

Leading financial institution, Fidelity Bank Plc, has released its 2023 full year Audited Financial Statements, reporting a 131.5% growth in Profit Before Tax to N 124,26 billion.

According to the results, which was issued to the Nigerian Exchange (NGX) today, the bank grew Gross Earnings by 64.9% YoY to N555.83 billion, driven by 81.6% growth in Net interest income which increased from N152.7billion to N277.37 billion. This led to a Profit After Tax of N99.45 billion representing a 112.9% annual growth.

Commenting on the Bank’s commendable performance, Dr. Nneka Onyeali-Ikpe,OON, MD/CEO of Fidelity Bank Plc said, “We closed the financial year with strong double-digit growth across key income and balance-sheet lines. Our performance in 2023 is an attestation of our capacity to deliver superior returns to shareholders despite the difficulties in our operating environment. Profit before tax grew by 131.5% to N124.3bn from N53.7bn in 2022FY, leading to an increase in Return on Average Equity (RoAE) of 26.5% from 15.6% in 2022FY.”

A review of the financial performance showed that the bank grew Net interest income by 81.6% to N277.4bn driven by a 55.5% increase in interest income, thus reflecting a steady rise in asset yield throughout the year. The average funding cost dropped by 20bps to 4.4% due to increased low-cost funds that grew from 83.6% in 2022FY to 97.4% in 2023. The combination of higher asset yield and lower funding cost led to an increase in Net Interest Margin (NIM) of 8.1% from 6.3% in 2022FY.

Similarly, Total Customer Deposits crossed the N4tn mark as deposits grew by 55.6% from N2.6tn in 2022FY. The increase was driven by 81.1% growth in low-cost funds.

Despite the challenging operating environment, the bank reaffirmed its devotion to helping individuals grow, inspiring businesses to thrive and empowering economies to prosper by increasing Net Loans & Advances to N3.1tn from N2.1tn in 2022FY.

Despite the growth in its loan portfolio, Regulatory Ratios were maintained well above the required thresholds, with liquidity ratio at 45.3% from 39.6% in 2022FY and capital adequacy ratio (CAR) at 16.2% compared to the minimum requirement of 15.0%.

“We recognize the changing dynamics in the Nigerian banking space and the need to monitor and proactively manage evolving risks. The proposed final dividend of 60 kobo per share reflects our commitment to strong value creation and returns to our shareholders,” explained Onyeali-Ikpe.

Fidelity Bank has consistently paid dividend since 2006. With the proposed final dividend of 60 kobo per share, Fidelity Bank would be paying investors a total dividend of 85 kobo per share for the reporting period, a 70.0% increase compared to the 50 kobo per share paid to its shareholders in the previous year.

Ranked as one of the best banks in Nigeria, Fidelity Bank is a full-fledged customer commercial bank with over 8.3 million customers serviced across its 251 business offices in Nigeria and the United Kingdom as well as on digital banking channels.

The bank has won multiple local and international awards including the Export Finance Bank of the Year at the 2023 BusinessDay Banks and Other Financial Institutions (BAFI) Awards, the Best Payment Solution Provider Nigeria 2023 and Best SME Bank Nigeria 2022 by the Global Banking and Finance Awards; Best Bank for SMEs in Nigeria by the Euromoney Awards for Excellence 2023; and Best Domestic Private Bank in Nigeria by the Euromoney Global Private Banking Awards 2023.

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