Banking Sector

CBN Officially Announces All Old Notes as Legal Tender After Buhari’s Criticism

Published

2 weeks ago

March 14, 2023

Naira Dollar Exchange Rate - Investors King

The Central Bank of Nigeria, CBN has officially declared its alliance with the Supreme Court judgement on the recirculation of the old N500 and N1000 notes as legal tender.

The apex bank, in a statement signed by the Acting Director of Corporate Communications, Isa AbdulMumin on Monday, directed banks to uphold the validity of the old notes as pronounced by Nigeria’s highest court.

Investors King had earlier reported that on March 3, 2023, the Supreme Court ruled that the old naira notes remain as legal tender till December 31, 2023. However, Nigerians became confused when their banks rejected the old naira notes telling them that CBN is yet to issue a directive on the matter.

The CBN’s directive came after President Muhammadu Buhari criticised the CBN Governor Godwin Emefiele and Attorney-General of the Federation (AGF) Abubakar Malami (SAN) for opposing the court judgement.

The President had said Emefiele has no excuse to disobey the supreme court saying that the CBN need not expect the president’s directive on the matter before complying with the ruling.

Buhari debunked the notion that he directed CBN governor and the Attorney-General to disobey the court order, reiterating his belief in democracy and prevalence of the rule of law.

The statement by the presidency read, “Since the President was sworn into office in 2015, he has never directed anybody to defy court orders, in the strong belief that we can’t practise democracy without the rule of law and the commitment of his administration to this principle has not changed.

“Following the ongoing intense debate about the compliance concerning the legality of the old currency notes, the Presidency, therefore, wishes to state clearly that President Buhari has not done anything knowingly and deliberately to interfere with or obstruct the administration of justice.

“The President is not a micromanager and will not, therefore, stop the Attorney General and the CBN governor from performing the details of their duties in accordance with the law. The directive of the President, following the meeting of the Council of State, is that the bank must make available for circulation all the money that is needed and nothing has happened to change the position.

After the open rebuke and dissociation on the naira saga by President Buhari, the CBN sent a directive to the commercial banks and alerted the citizens of its acceptance of the supreme court order after the long silence.

The CBN statement read, “In compliance with the established tradition of obedience to court orders and sustenance of the rule of law principle that characterised the government of President Muhammadu Buhari, and by extension the operations of the Central Bank of Nigeria (CBN), as a regulator, Deposit Money Banks operating in Nigeria have been directed to comply with the Supreme Court ruling of March 3, 2023.

“Accordingly, the CBN met with the Bankers’ Committee and has directed that the old N200, N500 and N1000 banknotes remain legal tender alongside the redesigned banknotes till December 31, 2023. Consequently, all concerned are directed to conform accordingly.”

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Banking Sector

Demola Sogunle Increases Stake in Stanbic IBTC

Published

1 day ago

March 27, 2023

Samed Olukoya

Dr. Demola Sogunle, the Chief Executive Officer of Stanbic IBTC Holdings Plc has expanded his stake in the bank by 1,521,117 shares.

This was made known in a statement signed by Chidi Okezie, Company Secretary, Stanbic IBTC and made available to investing public.

The bank chief acquired the shares between 21 March and 24 March 2023 at N37.05 a unit. Meaning, he paid a total sum of N56.357 million for the acquisition.

Sogunle held 3.41 million indirect shares before acquiring more shares in Stanbic IBTC as of December 31, 2022. In 2021, he held 2.41 million indirect shares, which he increased to 3.41 million last year.

Sogunle remained the second-largest shareholder in Stanbic IBTC after Ifeoma Esiri, who holds 40.38 million direct shares and 3.11 million indirect shares valued at N1.63 billion as of December 2022.

During the financial period of 2022, Stanbic IBTC reported a gross turnover of N287.53 million, surpassing the N206.64 million generated in the previous year. The financial institution also recorded growth in its net interest income, which increased to N113.11 billion in 2022 from N75.37 billion in 2021.

In addition, Stanbic IBTC closed the year with N80.81 billion in net profit, an improvement on the N56.96 billion profit after tax earned in the corresponding period of 2021.

Banking Sector

Stanbic IBTC Holdings’ Gross Earnings Reach a Decade High in 2022 With 131% Growth in Trading Revenue

Published

1 day ago

March 27, 2023

Samed Olukoya

Stanbic IBTC Holdings reported its highest gross earnings in a decade, aided by a 131% growth in trading revenue in 2022, according to data released by the Nigerian Exchange Group (NGX).

Gross earnings grew by 39.15% to N287.54 billion in 2022 compared to N206.64 billion in 2021, while trading revenue for the period surged to N34.69 billion in 2022 from N13.29 billion in 2021.

The growth in interest income was driven by an increase in the volume of risk assets and growth in average yield due to a higher interest rate environment, analysts at CSL Stockbrokers Limited said in a note.

The bank declared earnings per share of N603 per share in 2022 from N420 per share in 2021, and proposed a final dividend of N2.00 per ordinary share.

Further checks by Investors King showed that the bank’s interest expense rose by 34.62 percent to N39.55 billion in 2022 compared to N29.38 billion in 2021. This was driven by a significant increase of 124 percent in interest generated from savings accounts and a 62.36 percent increase in interest from borrowed funds.

The bank’s fees and commission revenue also grew by 8.77 percent to N96.07 billion in 2022, up from N88.32 billion in 2021. However, its fees and commission expenses decreased by 8.05 percent from N5.44 billion in 2021 to N5.01 billion in 2022.

Despite the profit growth, the bank’s activities are not generating cash as net cash flow from operating activities amounted to N-84.23 billion in 2022.

The bank’s return on equity for the full year period of 2022 increased by 470 basis points to 19.82 percent compared to 15.12 percent in 2021.

Banking Sector

Nigeria Raises Interest Rate by 50 Basis Points to 18%

Published

5 days ago

March 23, 2023

Samed Olukoya

The Central Bank of Nigeria (CBN) led monetary policy committee has raised the nation’s borrowing cost by another 50 basis points following a 500 basis points increase in 2022 to 18%.

The committee attributed its decision to the rising inflation rate and the need to contain price development around expectations of subsidy removal and other energy sources.

“These in the view of members, provides a compelling argument for an upward adjustment of the policy rate, albeit, less aggressively. The Committee, however, noted that the naira redesign and cash withdrawal limit policies have resulted in a sizeable reduction in Currency-Outside-Banks, indicating an expected improvement in the potency of monetary policy tools,” the minutes stated.

Another factor considered was the drop in capital importation and the impact of exchange rate pressure on domestic price levels.

The committee, therefore, called for policies to attract both portfolio and foreign direct investment to Nigeria.

It maintained optimism that, the continued progress made with the RT200 FX programme, Naira-4-dollar and
other policies targeted at attracting diaspora remittances, would continue to help improve accretion to the external reserves and improve liquidity in the foreign exchange market.

Members, however, remained aware of the ongoing challenges associated with the limits imposed on cash withdrawals in the face of frequent downtime in bank electronic transaction channels. The Committee thus called on Other Depository Corporations, online payment platforms, and other stakeholders to ensure that the prevailing incidence of network failures is overcome in the immediate and short term.

This would ensure that the Naira Redesign and Cash Withdrawal Limit Policies lead to an improved in-road of the CBN Cashless program and efficiency of the transmission mechanism of monetary policy.

Members, therefore, agreed to raise Monetary Policy Rate by 50 basis points, with ten members voting to raise the MPR by 50 basis points while one member voted to raise the MPR by 25 basis points and one member voted to hold the MPR. All members voted to keep all other parameters constant.