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January 31 Deadline: CBN Creates Cash Swap Centres For Rural Dwellers as Agents Storm LGAs Monday

The Central Bank of Nigeria (CBN) has inaugurated Cash Swap Centres across the 774 Local Government Ares of the country

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Godwin Emefiele - Investors King

With a view to meeting up with its January 31 deadline for the return of the N1000, N500 and N200 old naira notes to the banks, the Central Bank of Nigeria (CBN) has inaugurated Cash Swap Centres across the 774 Local Government Ares of the country.

Investors King had reported that a few days before the expiration of the deadline, banks and Automated Teller Machines were still dispensing old notes despite warnings of sanctions by the CBN.

According to the apex bank, these newly created centres would be controlled by some officials of the Deposit Money Banks (DMBs), Mobile Money Operators, Super Agents and other financial agents.

These agents are expected to attend to people in rural communities, especially those whose locations are far from urban areas where most banks are situated for them to return their old cash.

Also, Nigerians, especially rural dwellers who don’t operate bank accounts could approach these agents for the purpose of opening a wallet for their money to be kept.

The establishment of these centres was contained in a circular issued by the apex bank on Saturday.

The CBN, in the circular signed by Haruna Mustafa and Musa Jimoh, Directors of Banking Supervision and Payments Systems respectively and dated January 20, 2023, it indicated that the Cash SWAp Centres would commence operations on Monday, January 23.

According to the circular addressed to Mobile Money Operators, Super Agents and other Agents,  the exercise would enable rural dwellers to seamlessly change their old Naira Notes for the redesigned ones and to also save them the stress of traveling far.

The circular reads, “In furtherance of its Naira Redesign policy, the Central Bank of Nigeria (CBN) has sustained its nationwide awareness/sensitization programmes, enforced speedy collection of the new notes at CBN branches by the Deposit Money Banks (DMBs) and mandated issuance of the new notes through Automated Teller Machines (ATMs) to ensure distribution is fair, transparent and evenly spread across the country.

“In addition to these measures and in recognition of the need to maximise the channels through which underserved and rural communities can exchange their Naira, the Bank is launching a cash swap programme in partnership with Super Agents & DMBs. The programme enables citizens in rural areas or those with limited access to formal financial services to exchange old Naira notes for redesigned notes.”

On how the centres would operate, CBN said the old N1000, N500, N200 notes can be exchanged for the newly redesigned notes and/or the existing lower denominations (N100, N50 and N20, etc) which remain legal tender, adding that  “the agent shall exchange a maximum of N10,000 per person. Amounts above N10,000 may be treated as cash-in deposit into wallets or bank accounts in line with the cashless policy. BVN, NIN, or Voter’s card details of the customers should be captured as much as possible.”

The apex bank further noted that “to promote financial inclusion, this service is also available to anybody without a bank account.”

It said that agents may, on request, instantly open a wallet or account, leveraging the CBN Tiered KYC Framework, adding that, “this will ensure that this category of the populace are able to exchange or deposit their cash seamlessly without taking unnecessary risk or incurring undue cost.”

According to the circular, agents shall create awareness to customers and sensitise them on opening wallets/bank accounts and the various channels for conducting electronic transactions.

It added that designated agents are eligible to collect the redesigned notes from DMBs in line with the Revised Cash Withdrawal Limit policy and that agents are also permitted to charge cash- out fees for the cash swap transactions.

Announcing that agents are prohibited from charging any further commissions to customers for this service, the CBN directed the agents to ensure that they render weekly returns to their designated banks regarding the cash swap transactions.

It also mandated DMBs to, in turn, account for same to the CBN on a weekly basis.

The CBN stated that principals of the service including Super Agents, MMOs, DMBs shall be held accountable for their agents’ non-adherence to the above guidelines.

It informed Nigerians in the rural communities to watch out for the Cash Swap agents in their neighbourhood as from Monday, adding that it would ensure that the centres were monitored for effective implementation.

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Banking Sector

Zenith Bank Achieves Historic Milestones in 2023 With Stellar Triple-Digit Topline And Bottom-Line Growth

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Zenith Bank - Investors King

Zenith Bank Plc has announced its audited results for the year ended December 31, 2023, achieving a remarkable triple-digit growth of 125% in gross earnings from NGN945.6 billion reported in 2022 to NGN2.132 trillion in 2023.

According to the audited financial results for the 2023 financial year presented to the Nigerian Exchange (NGX), this impressive triple-digit growth in gross earnings resulted in a Year-on-Year (YoY) increase of 180% in Profit Before Tax (PBT) from NGN284.7 billion in 2022 to NGN796 billion in 2023.

Profit After Tax (PAT) also recorded triple-digit growth of 202% from NGN223.9 billion to NGN676.9 billion in the period ended December 31, 2023.

The increase in gross earnings is primarily due to growth in interest and non-interest income. Interest income increased by 112% from NGN540 billion in 2022 to NGN1.1 trillion in 2023. Non-interest income grew by 141% from NGN381 billion to NGN918.9 billion in the same period.

The increase in interest income is attributed to the growth in the size of risk assets and their effective repricing, alongside the rise in the yield of other interest-bearing instruments over the year. Growth in non-interest income was driven by significant trading gains and an increase in gains from the revaluation of foreign currencies.

The cost of funds grew from 1.9% in 2022 to 3.0% in 2023 due to the high interest rate environment while interest expense increased by 135% from NGN173.5 billion in 2022 to NGN408.5 billion in 2023. Notwithstanding the 32% growth in operating expenses in 2023, the Group’s cost-to-income ratio improved significantly from 54.4% in 2022 to 36.1% in 2023 due to improved top-line performance.

Return on Average Equity (ROAE) increased by 118% from 16.8% in 2022 to 36.6% in 2023, underpinned by improved gross earnings, as the Group sought to deliver better shareholder returns. Return on Average Assets (ROAA) also grew by 95% from 2.1% to 4.1% in the same period.

The Group has continued to deepen its market leadership in key corporate and retail deposit segments as customer deposits increased by 69% from NGN9.0 trillion to NGN15.2 trillion in 2023.

Its retail drive continues to yield dividends as retail deposits now constitute 46% of total deposits (compared to 44% in 2022) and grew by 77% from NGN3.97 trillion in 2022 to NGN7.04 trillion in 2023, also reinforcing increased customer confidence in the Zenith brand.

Total assets increased by 66% from NGN12.3 trillion in 2022 to NGN20.4 trillion in 2023, largely due to growth in total deposits and the revaluation of foreign currency deposits.

Gross loans grew by 71% from NGN4.1 trillion in 2022 to NGN7.1 trillion in 2023 due to the revaluation of foreign currency loans and the growth in local currency risk assets.

As a result of the disciplined and diligent approach to risk assets creation and management, the loan growth did not significantly impact the Non-Performing Loans (NPL) ratio, which increased marginally from 4.3% to 4.4% despite the heightened risk environment and challenging operating environment, an attestation to the Group’s resilience despite headwinds and a challenging macroeconomic environment.

Also, the prudential ratios remain within regulatory thresholds, with the Capital Adequacy Ratio (CAR) and liquidity ratio at 21.7% and 71.0%, respectively, at the close of 2023.

As a demonstration of its commitment to shareholders, the bank has announced a proposed final dividend payout of NGN3.50 per share, bringing the total dividend to NGN4.00 per share.

In 2024, the Group will complete the transition to a holding company structure, which is anticipated to position it advantageously for exploring emerging opportunities in the Fintech space while bolstering its digital and retail banking initiatives.

Furthermore, the Group is undertaking urgent necessary actions to meet the new minimum NGN500 billion equity capital requirement to maintain its international authorisation within the timeframe stipulated by the Central Bank of Nigeria (CBN).

This will strengthen its presence in key markets to continue positioning for sustainable growth and value addition for stakeholders.

Zenith Bank’s track record of excellent performance has continued to earn the brand numerous awards, including being recognised as Best Bank in Nigeria, for the fourth time in five years, from 2020 to 2022 and in 2024, in the Global Finance World’s Best Banks Awards; the Best Bank for Digital Solutions in Nigeria in the Euromoney Awards 2023, being listed in the World Finance Top 100 Global Companies in 2023; being recognised as the Number One Bank in Nigeria by Tier-1 Capital, for the 14th consecutive year, in the 2023 Top 1000 World Banks Ranking published by The Banker Magazine; Best Commercial Bank, Nigeria, for three consecutive years from 2021 to 2023, in the World Finance Banking Awards; Best Corporate Governance Bank, Nigeria in the World Finance Corporate Governance Awards 2022 and 2023; Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards 2020 and 2022; Best in Corporate Governance’ Financial Services’ Africa, for four successive years from 2020 to 2023, by the Ethical Boardroom; Most Sustainable Bank, Nigeria in the International Banker 2023 Banking Awards; Best Commercial Bank, Nigeria and Best Innovation in Retail Banking, Nigeria in the International Banker 2022 Banking Awards.

Also, the bank emerged as the Most Valuable Banking Brand in Nigeria in the Banker Magazine Top 500 Banking Brands 2020 and 2021; Bank of the Year 2023 and Retail Bank of the Year for three consecutive years from 2020 to 2022, at the BusinessDay Banks and Other Financial Institutions (BAFI) Awards. Similarly, Zenith Bank was named Bank of the Decade (People’s Choice) at the ThisDay Awards 2020, Bank of the Year 2021 by Champion Newspaper, Bank of the Year 2022 by New Telegraph Newspaper, and Most Responsible Organisation in Africa 2021 by SERAS Awards.

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Banking Sector

UBA Reports 256.89% Rise in Profit After Tax, Hits N607.69bn in 2023

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UBA House Marina

United Bank for Africa Plc (UBA) has reported a 256.89% increase in profit after tax to N607.69 billion in the full year ended December 31, 2023 from N170.27 billion achieved in the previous year.

This outstanding performance underscores UBA’s resilience and strategic positioning in navigating the challenging economic landscape while capitalizing on emerging opportunities.

The audited financial results filed with the Nigerian Exchange Limited also revealed improvement across various financial metrics.

UBA’s gross earnings rose by 143% to N2.08 trillion compared to N853.2 billion recorded in 2022.

Similarly, the bank’s profit before tax surged by 277% to N758 billion, a significant leap from N201 billion in the prior year.

One of the most remarkable achievements for UBA was the doubling of its total assets, which crossed the N10 trillion mark to close at N20.65 trillion in December 2023. This exponential growth represents a 90.22% increase from N10.86 trillion in 2022.

UBA’s shareholders also witnessed a significant uptick in their funds, with the group’s shareholders’ funds increasing by 120.2% year-on-year to N2.0 trillion.

The group’s cost-to-income ratio dropped from 59.2% in 2022 to 37.2%, reflecting improved cost management and operational efficiency.

Also, UBA significantly bolstered its loan portfolios by 61.3% to N5.5 trillion, while deposits witnessed a substantial increase of 90.31% to N14.9 trillion, compared to N7.8 trillion recorded in 2022.

In line with its commitment to value creation and rewarding shareholders, UBA’s Chairman, Tony Elumelu, fulfilled the promise made at the last annual general meeting by proposing a final dividend of N2.30 kobo for every ordinary share of 50 kobo for the fiscal year 2023.

The proposed dividend, to be paid from retained earnings totaling N919.872 billion as of December 2023, underscores the bank’s commitment to delivering sustainable returns to its shareholders.

Commenting on the financial performance, UBA’s Group Managing Director/Chief Executive Officer, Oliver Alawuba, stated, “I am very pleased with the unprecedented results achieved by our group in 2023.”

“The group’s shareholder’s funds crossed N2 trillion from N922 billion in 2022. The group is well positioned for further business expansion in FY2024 having closed FY2023 with a capital adequacy ratio of 32.6 percent.”

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Banking Sector

FBN Holdings to Seek Shareholders’ Approval for N300bn Capital Raise

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FBN Holdings

FBN Holdings, one of Nigeria’s leading financial holding companies, has announced its intention to seek shareholders’ approval for a N300 billion capital raise.

The decision comes amidst efforts to bolster the company’s financial strength and support its growth objectives in the dynamic banking landscape.

In a notice of its extraordinary general meeting (EGM) filed with the Nigerian Exchange Limited on Monday, FBN Holdings revealed its plans to convene a virtual meeting by the end of the month to deliberate on the proposed capital raise.

Shareholders will consider and vote on the special business item, granting the company authorization to undertake a capital raise of up to N300 billion.

“The capital raise transaction shall be by the issuance of shares via a public offering, private placement, rights issue in the Nigerian or international capital markets, at price(s) to be determined by way of a book building process or any other valuation method or combination of methods,” stated the notice.

The decision to pursue such a significant capital raise aligns with the evolving dynamics of the banking sector.

The Central Bank of Nigeria recently revised upward the capital requirements for commercial, merchant, and non-interest banks, as well as promoters of new banks, in response to domestic and global economic challenges.

According to the apex bank’s directive, commercial banks with international authorization are mandated to increase their capital base to N500 billion, while national banks must achieve a capital floor of N200 billion.

Regional banks, on the other hand, are expected to maintain a capital base of N50 billion. Non-interest banks have also been directed to raise their capital to N20 billion and N10 billion for national and regional authorizations, respectively.

FBN Holdings’ move to seek additional capital follows earlier initiatives in this regard. In October, the company sought approval from the Nigerian Exchange Group to raise N139 billion through a rights issue, signaling its proactive approach to fortifying its financial position and supporting future expansion endeavors.

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