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Banking Sector

CBN Commends Banks For Good Performance in 2022

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Retail banking

The Central Bank of Nigeria (CBN) has said the banking system has continued to perform well with major financial soundness indicators as it compared favourably with the prudential thresholds as of the end of October 2022.

The Central Bank of Nigeria disclosed this in statements by its Monetary Policy Committee on monetary policies.

CBN governor, Godwin Emefiele, noted that there were significant improvement in the banking sector which was achieved through the substantial overshoot of domestic claims above programmed benchmark and importantly reflected the sustained growth of banking system credits to the private sector, consistent with the CBN policy to finance high-impact sectors.

“Despite rising private sector credits and elevated uncertainties, the banking system remained resilient and stable as NPL ratio (4.81 per cent), liquidity ratio (40.14 per cent) and CAR (13.39 per cent), outperformed their prudential limits. In order to insulate our economy from adverse external developments, it remains imperative to fortify our economic base by de-risking the productive sector and diversifying completely.

“This is especially as frozen oil receipt impedes the FX market, shrinking external reserves from $37.39bn in September to $36.87bn in October, and abetting exchange rate pressures.”

Giving their thought on the performance of the banking sector, Adeola Adenikinju, member of the MPC, lauded the banks for having various Financial Soundness Indicators that showed that the banking systems remained safe, sound, and resilient.

“All measures of industry aggregates: assets, deposits and credit rose year on year. Total assets of the banking industry grew by N12.37tn between end-October 2021 and 2022.

“Similarly, industry credit increased by N5.32tn over the same period. In addition, total industry deposits rose by N6.92tn between end-October 2021 and 2022. In October 2022, a total of 125,305 new credits valued at N767.06bn were granted to various customers. There was marginal increase in lending rates in the industry in response to recent measures by the CBN.”

Another member of the committee, Robert Asogwa, said the domestic financial sector was still resilient as of October, except for observed volatilities in the stock market while Folashodun Shonubi, a memebr of the committee noted that the banking system remained strong so far in 2022, even as it continued to wrestle with the effects of a challenging macroeconomic environment on businesses.

“Of note is the sustained growth in total industry deposits, credits, and assets, reflecting positive impact of various measures by the bank. Industry capital adequacy, though lower at 13.4 per cent, was above the 10.0 per cent prudential minimum.

“Significant rise in domestic claims on private sector and the government has however pushed annualised growth of major monetary aggregate slightly above the benchmark for fiscal 2022, highlighting monetary aspect of the drivers of inflationary pressure.”

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Banking Sector

Jaiz Bank Reports N5.946 Billion Profit in 2022 Financial Year

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Jaiz Bank

Nigeria’s leading digital bank, Jaiz Bank Plc has announced a 45.58% increase in profit after tax to N5.946 billion for the financial year ended December 31, 2022.

In the unaudited financial statement obtained by Investors King, the lender’s income from financing contracts grew to N21.589 billion in 2022, a 41.98% increase when compared to N15.205 billion recorded in 2021 financial year.

Income from investment activities inched higer from N8.972 billion filed in the corresponding period to N9.862 billion, representing a 9.92% growth. Therefore, gross income stood at N31.450 billion in the period under review.

Bank’s share as equity investor improved by 34.73% to N27.562 billion from N20.457 billion. Net spread after provision also expanded to N20.656 billion.

The bank’s total income appreciated by 31.73% to a combined N22.635 billion in the period under review. As expected, total expenses rose by 24.63% to N15.965 billion from N12.809 billion in 2021.

Profit before tax increased to N6.669 billion while the bank paid income tax of N583.595 million. The bank declared N5.946 billion profit after tax.

In September 2022, the  Managing Director/CEO, Dr. Sirajo Salisu, who commented on the bank’s performance, said the “bank remained committed to providing value-creating ethical banking services to its growing customer base.  He assured that the Bank is positioned to continue its remarkable earnings streak for the remainder of the year, by leveraging on technology and extending its touch points across the country.”

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Banking Sector

CBN: New National Domestic Card Will Improve E-payment, Foreign Exchange 

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Godwin Emefiele - Investors King

The newly inaugurated Nigerian National Domestic Card Scheme is aimed at enhancing electronic payment and foreign exchange, the Central Bank of Nigeria (CBN) says.

The official launch of the National Domestic Card was done virtually on Thursday, Investors King reports.

Speaking on the benefits of the new domestic card, the CBN Governor, Godwin Emefiele said it will lessen operating costs, charges and strengthen foreign exchange in Nigeria.

Emefiele stated that the use of the new domestic card is with immediate effect and all local transactions will be done through the card.

His words, “Ladies and gentlemen, at this time when foreign exchange challenges persist globally, it is important that I say that we have come up with this card to ensure that all online transactions will now be effective and immediately begin to go on the Nigerian National Domestic Card system.

“All domestic transactions that are going to be conducted in Nigeria will have to be through the Nigerian domestic cards.”

He pointed out that the apex bank will collaborate with the Nigeria Inter-Bank Settlement System Plc and commercial banks to ensure that only international transactions are accompanied with charges as when done with Visa card or Master Card.

The CBN governor expressed concern over the large number of payments still carried out without cards despite the fact that card payment had been introduced in Nigeria a long time ago.

He highlighted some of the reasons as expensive card services which include charges due to foreign exchange requirements of the international card system and unlocalised cards in existence.

Emefiele averred that the new national domestic card scheme seeks to address these challenges and encourage more card transactions, adding that the card would be accessible to all citizens regardless of locality. 

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Banking Sector

CBN Says Era of Naira Hoarding Ending as Residents Rush to Beat Deadline

Nigeria’s cash in circulation has more than doubled since 2015 to N3.23 trillion

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Godwin Emefiele - Investors King

The Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele, has vowed to ensure that the country does not return to the era of hoarding naira notes.

Emefiele said the trend was wrecking the nation’s economy, stressing that by the time the old notes of N1000, N500 and N200 had been returned to various banks, the situation whereby some citizens store up cash in their personal custody would have been made difficult.

While updating journalists in Abuja, the nation’s capital on the ongoing cash return exercise across the country, Emefiele urged Nigerians who have hoarded money in their homes to return it to the banks.

While lamenting that Nigeria’s cash in circulation has more than doubled since 2015 to N3.23 trillion, Emefiele said the development attested to his disclosure that people are hoarding cash.

He added that people are keeping vaults in their homes and that the redesigned currency notes are parts of the means of disallowing them to continue owning banks in their homes.

The CBN Governor added that those who keep cash in their private residences don’t have the license to build bank vaults in their homes and urged them to take the money to banks.

Emefiele said their act was against the nation’s monetary policy, saying that they are keeping those monies to speculate against a currency, thus making the apex bank efforts more difficult.

Investors King had reported that the CBN had inaugurated a Cash Swap policy whereby agents are sent to rural communities for those without bank accounts to deposit the old notes with them.

The nation’s bank had added that those with limited access to formal financial services have the opportunity of exchanging a maximum N10,000 per person of the old notes through banks or agents without having to open an account.

The bank further noted that it was also working with about 1.4 million agents and lenders to reach citizens across the country to swap old notes for new ones or open bank accounts before the deadline.

For Emefiele, using representatives to penetrate the rural areas is a confirmation of its insistence that the January 31 deadline would not be shifted.

He maintained that Nigerians who couldn’t swap the old notes before next week Tuesday should consider them as “useless cash” in their hands.

Meanwhile, Nigerians have been rushing to beat the deadline.

Checks by Investors King on Wednesday revealed that the number of customers storming banks for exchange of notes has been increasing.

Emefiele said about N2 trillion ($4.3 billion) of cash is expected to be returned to banks by next week Tuesday.

Already, the governor said N1.5 trillion of the old notes had been returned as of last week, adding that the CBN hoped to get to N2 trillion by the Ned of the deadline.

A bank official who spoke with Investors King had said that banks are expected to return the old notes to CBN next week Tuesday, saying that Monday is the last day for customers to swap their old old notes.

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