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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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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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