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Banking Sector

Nigerian Banks and Corporations Face N125 Million in Fines for Reporting Delays

Non-Compliance with Audited Financial Statements and Quarterly Reports Submission Results in Penalties

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Retail banking

Investors King reports that Nigeria’s financial sector is buzzing with news of fines levied on eight banks and 18 publicly listed companies.

These fines, totaling N125 million, come as a consequence of these entities’ failure to file their audited financial statements for the year 2022 and their quarterly reports for the first half of 2023, as mandated by the Nigerian Exchange Group (NGX).

Among the banks facing penalties are Unity Bank, FBN Holdings, Access Holdings, Fidelity Bank, Jaiz Bank, Wema Bank, Guaranty Trust Holdings Plc, and Ecobank Transnational Incorporated.

In addition to the banks, various publicly traded companies, including John Holt, PZ Cussons, Notore Chemical, Glaxo SmithKline Consumer Nigeria, Industrial Medical and Gases Nigeria, and Juli Plc, have also been affected by these sanctions.

The NGX has stringent post-listing rules that demand quoted companies to furnish their audited results within 90 calendar days, or three months, following the conclusion of the financial year. These rules further require these companies to submit interim reports no later than 30 calendar days after the end of the respective period.

Our analysis of NGX’s latest X-Compliance Report reveals that FBN Holdings faced fines due to delays in submitting its 2022 financial results and its Q1 2023 report. For these infractions, the lender incurred fines of N6.3 million and N3.3 million, respectively.

Unity Bank, on the other hand, paid N6.4 million for failing to submit its 2022 results promptly and an additional N3.4 million for the delay in providing its interim reports for Q1, 2023.

Other fines include Fidelity Bank, GTCO, and Wema Bank paying N2.7 million, N1.4 million, and N1.9 million, respectively. Access Holdings was fined N2 million, while Jaiz Bank, Ecobank, and John Holt faced penalties of N600,000, N3.2 million, and N3.2 million, respectively.

PZ Cussons incurred a fine of N4.8 million, Notore Chemical paid N500,000, and GSK, which recently announced its withdrawal from the Nigerian market, faced a N1.3 million fine for failing to promptly file its 2022 financial results.

Other companies sanctioned for tardy submission of their 2022 audited accounts include Industrial Medical and Gases Nigeria (N1.2 million), Juli Plc (N120,000), and NPF Microfinance Bank (N1.8 million).

Also, Daar Communications was slapped with a N1.7 million fine, Champion Breweries and Abbey Mortgage Bank Plc were penalized N1.6 million and N1.4 million, respectively. Regency Alliance Insurance and Thomas Wyatt Nigeria also incurred fines of N1.4 million and N4.9 million, respectively, for the same offense.

The NGX also imposed significant fines on Presco Plc (N24.8 million), Ardova (N18.6 million), and Universal Insurance Plc (N12.4 million) for violating filing regulations. Conoil was fined N7.9 million for failing to meet the stipulated reporting deadline, while Caverton Offshore Support Group paid N5.7 million as a penalty for the same offense.

Notably, telecommunications services firm Briclinks Africa Plc was also fined N590,000 during this period.

David Adonri, Vice-chairman of Highcap Securities, emphasized the importance of these fines in upholding the market’s integrity.

He noted that many of these penalties stem from corporate disclosure issues and highlighted that the capital market relies on timely and accurate information from listed companies.

Adonri added that companies anticipating difficulties in meeting their disclosure obligations can formally request additional time from the exchange.

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Banking Sector

Nigeria Plans 50% Windfall Tax on Banks’ Currency Profits

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Central Bank of Nigeria (CBN)

Nigerian President Bola Tinubu has announced a one-time 50% tax on windfall profits that banks reaped from currency gains following last year’s naira devaluation.

This decision was part of the government’s strategy to navigate the ongoing cost-of-living crisis.

The naira, which has depreciated by about 70% against the dollar since foreign exchange rules were relaxed in June 2023, allowed banks holding dollar assets to significantly boost their income.

However, the Central Bank of Nigeria had advised lenders to retain these profits as a buffer against potential future losses.

The proposed tax will apply to the 2023 financial year, with non-compliance resulting in hefty fines.

The move has already impacted the NGX Banking Index, which fell by 1.3% as of midday trading in Lagos. Notable declines were seen in FBN Holdings Plc and Zenith Bank Plc, dropping 3.2% and 2.5% respectively.

This initiative mirrors similar actions in Europe, where countries like Italy and Hungary have imposed taxes on banks to address what they view as excessive profits during periods of high inflation and interest rates.

European banks have criticized these measures, warning of potential impacts on economic growth due to constrained lending capabilities.

President Tinubu’s administration believes this tax will help manage Nigeria’s fiscal challenges while addressing social needs.

Lawmakers are expected to support the measure, alongside a proposal to increase government spending by 6.2 trillion naira ($3.8 billion).

While banks have benefited from currency revaluations, many customers, particularly manufacturers with dollar-denominated loans, faced significant losses as they struggled with the weaker naira.

The new tax policy highlights the government’s broader efforts to stabilize the economy and attract foreign investment, aiming to ensure a more equitable distribution of financial gains.

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Banking Sector

Unity Bank Customers Win Over N4 Million in Cashtoken Rewards Promo

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Unity Bank customers have claimed over N4 million in cash rewards in its ongoing loyalty programme recently rolled out with Cashtoken, a Cash Reward-as-a-Service company.

The winners included no fewer than 40 customers who adopted and transacted on the Bank’s digital banking platforms, including the UniFi mobile banking application, the *7799# USSD platform or activated their Unity Bank Verve Card to transact on e-payment terminals across Nigeria.

Beginning from onboarding in our customer lifecycle journey, the Unity Bank Cashtoken Partnership commenced as a loyalty and reward scheme to reinforce the benefits of e-banking platforms. To begin, Customer transactions earn cash tokens, which are then redeemed to qualify for the monthly Cashtoken Rewards draw. Consequently, winners emerge from the draws to claim the cash prizes.

Recall that the retail lender announced the ongoing Cashtoken Rewards loyalty programme in December 2023 in partnership with Cashtoken Rewards Africa to empower customers and improve customer satisfaction. The partnership with Cashtoken Rewards also provided an opportunity for the Bank to migrate customers—old and new—to a platform that will continually create exciting rewards and appreciation for loyalty.

Eghomware Iyamu, Unity Bank’s Head of E-Business, commenting on the success of the Cashtoken Rewards loyalty program, stated: “We are excited to see our customers win over N4 million in cash rewards through our partnership with Cashtoken. This initiative demonstrates our commitment to recognizing and rewarding the loyalty of our customers”.

“By leveraging our digital banking platforms, including the Unifi mobile banking application and the *7799# USSD platform, we are not only enhancing customer experience but also providing life-changing opportunities. The Cashtoken Rewards program is a testament to our dedication to improving customer satisfaction and creating meaningful rewards along our customer lifecycle journey. We look forward to seeing more of our customers benefit from this exciting program as we continue to innovate and deliver exceptional value to them.”

Unity Bank has robust electronic banking products which include mobile and digital banking channels, including ATM, PoS, or any digital payment channels which support retail product transactions across the country. New-to-Bank customers are invited to open a Unity Bank account, onboard onto the digital platforms and begin transacting on the various platforms to earn cash token rewards and cash prizes while existing customers are encouraged to onboard and transact to win even more rewards and cash prizes.

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Banking Sector

Access Bank and FMO Sign Landmark $295 Million Syndicate Tier II Facility Agreement

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Access bank

Access Bank Plc, sub-Saharan Africa’s largest bank by customer base, has reached a significant milestone in its enduring partnership with the Dutch Entrepreneurial Development Bank (FMO).

This collaboration, spanning over two decades, marked a historic moment on Tuesday with the signing of a monumental syndicate Tier II Facility agreement valued at $295 million, approximately N442.5 billion.

The relationship between Access Bank and FMO, which began in 2003, has been a testament to their shared commitment to economic development in Nigeria.

This latest agreement, the third of its kind arranged by FMO for Access Bank, represents more than just a financial transaction; it symbolizes the deep-rooted trust and synergy between the two institutions.

This historic agreement is notably the largest syndication in FMO’s history, a substantial investment resulting from a collective effort involving a syndicate of Global Development Finance Institution (DFI) partners.

These partners include esteemed entities such as British International Investment (BII), Belgian Investment Company for Developing Countries (BIO), BlueOrchard, FinDev Canada, Finnfund of Finland, Norfund of Norway, Oikocredit, and Swedfund of Sweden.

The $295 million facility is earmarked to empower local small and medium-sized enterprises (SMEs), with a particular focus on underserved segments such as youth- and women-owned businesses, agricultural enterprises, and very small enterprises.

This significant infusion of capital aims to catalyze growth across various sectors, stimulate business development, create jobs, and deepen financial inclusion, aligning with Access Bank’s mission to drive progress and development throughout the continent and beyond.

The ceremony, held in the Netherlands, was attended by dignitaries including Oluremi Oliyide, Nigerian Ambassador to the Netherlands, and representatives from the Dutch government.

During the event, Roosevelt Ogbonna, MD/CEO of Access Bank Plc, expressed profound gratitude to FMO for their unwavering support and emphasized the bank’s commitment to becoming the world’s most respected African bank by adhering to global best practices and maintaining high standards of accountability.

“Today marks a significant milestone in our longstanding partnerships with FMO. This monumental syndicate Tier II Facility agreement underscores the deep-rooted trust and synergy among our institutions. This facility not only enhances our capital reserves but also strengthens Africa’s trade capabilities and export potential,” Ogbonna said.

“Putting these funds to use, we aim to catalyze growth across various sectors, stimulate business development, create jobs, and deepen financial inclusion.”

In his remarks, Michael Jongeneel, CEO of FMO, stated, “We extend our gratitude to our longstanding partner, Access Bank, and our syndication partners for their outstanding cooperation and collective effort in making this loan facility a reality. The syndicated loan provides significant support to SMEs in Nigeria, particularly underserved segments such as women and young entrepreneurs, aligning perfectly with our shared strategy to enhance financial inclusion and empower local entrepreneurs in the agribusiness and SME sectors.”

Marchel Gerrmann, representing the Dutch government, and members of the syndication partners—BII, Finnfund, and BlueOrchard—were among the distinguished guests who witnessed this historic agreement.

This landmark deal is set to bolster Nigeria’s private sector, providing much-needed support to SMEs and contributing significantly to the country’s economic development.

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