A number of Deposit Money Banks in the country will close many of what they described as unprofitable branches as the economic recession continues to bite harder, investigation by our correspondent has shown.
It was similarly gathered that most of the banks would lay off hundreds of workers between now and December.
The revelation came barely 24 hours after Unity Bank Plc laid off about 300 workers, more than the 220 that was mentioned last week.
It was learnt that following the economic downturn in the country, a number of bank branches could no longer justify their existence as cost analysis had shown that the financial institutions were spending more on salaries and overheads than the income from the branches.
Some top bank executives, who confirmed the development to our correspondent under the condition of anonymity on Monday, said some lenders might be forced to relieve more workers of their duties before the end of this year.
An executive director in one of the banks that recently asked some of its workers to go said, “We have laid off some of our staff members but that it still not enough. Many branches are just existing for the sake of being there. They are not generating enough income. What they are bringing in is far less than what the bank is incurring as costs on them.
“We may have to close such branches before the year ends. I know a number of other banks that are planning something similar.”
Commenting on the development, an ex-banker and Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, described branch closure as an ongoing action in the banking sector, especially in times of economic downturn.
He, however, noted that banks were required to notify the Central Bank of Nigeria before closing any branch.
“It is an ongoing administrative thing in the banking industry. Banks will want to rationalise branches, especially in a difficult economy. Banks are planning to cut costs. Branch rationalisation is normal but the CBN has to be notified,” Chukwu explained.
The banking sector has been facing a number of challenges following the downturn in economic activities.
The slowdown in the economy, which has led to a high rate of non-performing loans in the banking system, made four lenders to lose at least N17bn in profits in the first quarter of this year.
Specifically, Ecobank Transnational Incorporated, Guaranty Trust Bank Plc, Unity Bank Plc and Diamond Bank Plc recorded a combined decline of N17bn in their profits before tax for the three months ended March 31, 2016, when compared with the corresponding period of 2015, according to the results of the financial institutions posted on the website of the Nigerian Stock Exchange.
When compared with the PBT of N30.52bn, N32.65bn, N4.26bn and N7.94bn recorded by the banks in the first quarter of 2015, the combined PBT of the four banks dropped by N17bn from N75.4bn in the first quarter of last year to N58.4bn in the same period of this year.
While Ecobank’s PBT fell from N30.52bn in the first quarter of 2015 to N20.63bn in a similar period of this year, GTBank’s dropped from N32.65bn to N30.68bn. That of Unity Bank dropped from N4.26bn to N1.05bn, while Diamond Bank’s came down from N7.94bn to N6.04bn.
In terms of their profit after tax, the four banks recorded a decline of N14bn.
Banks in the country had been posting sharp increases in profits before tax and profits after tax since 2011 after the establishment of the Asset Management of Corporation of Nigeria in 2010 following the banking sector crisis in 2009.
However, consistent drop in the global prices of crude oil, Nigeria’s main foreign exchange earner, since June 2014, caused banks’ profits to start declining at the end of 2015.
Majority of the 15 banks listed on the NSE recorded declines in their full-year profits in the 2015 financial year. However, a few ones such as Access Bank Plc, Zenith Bank Plc, United Bank for Africa Plc and GTBank outperformed the market despite sizeable volume of bad loans.
In the first quarter of 2016, 13 out of the 15 banks posted a combined PBT of N135.36bn, compared to N148bn in the corresponding period of last year.
Similarly, the 13 banks posted profits after tax of N116.6bn in the first quarter of 2016, compared to N126.4bn in the first quarter of 2015.
The 13 banks are Access Bank Plc, Diamond Bank Plc, Ecobank Transnational Incorporated, First Bank of Nigeria Limited, GTBank, FCMB Limited, Sterling Bank Plc, Fidelity Bank Plc, UBA Plc, Unity Bank, Wema Bank Plc, Union Bank Plc and Zenith Bank Plc.
Skye Bank Plc and Stanbic IBTC Bank have yet to release their full-year 2015 and first-quarter 2016 financial results.
An economic analyst and Head, Investment Advisory, Afrinvest West Africa Limited, Mr. Ayodeji Ebo, said the declining profit in the financial services sector was a reflection of the challenges facing the Nigerian economy.
FG to Absorb Exited N-power Beneficiaries into New Program
Exited N-power Beneficiaries to Be Absorbed into Another Program
The Federal Government has commenced plans to absorb exited N-power beneficiaries into a new program in an effort to help them eke a living.
Sadiya Umar Farouq, the Minister of Humanitarian Affairs, Disaster Management and Social Development, made the statement at an interactive forum with state focal persons of the National Social Investment Programmes in Abuja.
She said: “As we renew our commitment to the service of humanity, I will like to cease this opportunity to once again state that we have successfully exited Batch A and B of the N-Power beneficiaries in June and July respectively and we are still working towards ensuring a transition plan that will further engage or absorb them into other programmes.”
Sadiya also stated that the selection process of the Batch C N-power application will be thorough and base on merit.
“We have also received over 5 million applications from proposed N-Power Batch C and we are currently in the process of selecting the qualified beneficiaries coming into the programme.
“I assure all the applicants and Nigerians that the selection process will be transparent,” she said.
She added that, “I wish to reiterate that I have given approval for the payment of stipends for the exited beneficiaries of batches A and B up to the month of June 2020 including that of the independent monitors. Also, the final payment of stipend for Batch B is almost ready for transmission to the office of the Accountant General of the Federation for final checks and payment.
The minister urged state coordinators to discharge their duties diligently and not let her down.
“It is against this background that I urge everyone of you to continue to give in your best to ensure the lives of those we are called to serve are made better.
“We must not lose sight of the fact that each one of the vulnerable persons are not mere numbers or statistics but real people with dreams, hopes, aspirations and a desire to live decent lives in peace and safety,” he submitted.
FG Says All Airports Are Now Open for Domestic Flight Operations
All Airports Are Now Open for Domestic Flight Operations Says FG
The Federal Government on Monday said all airports in the country are officially open for domestic flight operations.
This was disclosed by the Minister of Aviation, Hadi Sirika, during the briefing of the Presidential Task Force on COVID-19 on Monday in Abuja.
Hadi, however, noted that operators flying into private-owned airports must know the status of such airports.
Speaking at the PTF Briefing, the minister said there is no need for flight approval within Nigeria again as all airports are now opened for domestic operations.
He said, “All airports in Nigeria are now open for domestic flights, including those that are for private charter operations.
“They (operators) will no longer need approvals from us to operate domestically within government-owned airports. However, for the private airports, operators should check their safety status with the Nigerian Civil Aviation Authority.
“Such airports are Jalingo, Uyo, Asaba, Gombe, Nasarawa, Damaturu, Osubi, etc. So you don’t need any approval from the minister, but you should check the status of these airports with the NCAA.”
Commenting on international chartered flights, the minister said they need approvals to flight out of the country.
He said, “All flights out of the country that are private charter will still need approvals for those kind of flights, including technical stops.
“So with this, it means that the approvals that are sent via the NCAA, NAMA and myself will cease and if there is any change, it will be so advised accordingly.”
Afreximbank, ITFC Partner With ARSO to Facilitate Intra-African Trade
AFREXIMBANK and International Islamic Trade Finance Corporation (ITFC) Partner With ARSO to Facilitate Intra-African Trade in Pharmaceuticals and Medical Devices, under the Umbrella of the AATB Program
The African Export-Import Bank (Afreximbank) and the International Islamic Trade Finance Corporation (ITFC), have partnered with the African Organisation for Standardisation (ARSO), to launch a new Arab-Africa Trade Bridges Program (AATB) initiative called the Harmonisation of Standards for Pharmaceutical and Medical Devices in Africa, aimed at promoting the quality and safety of medicines and medical devices imported or produced on the continent.
Harmonized product standards are critical to the implementation of the African Continental Free Trade Agreement (AfCFTA), ensuring that producers of goods on the continent comply with one shared set of minimum regulatory and customer quality requirements, in turn allowing them to supply the continental market and beyond with goods that meet those standards. The harmonisation of standards also serves to enhance the quality of African manufacturing and boost intra-African and Arab-African trade and investment – one of the AATB’s key objectives.
The initiative, which will be implemented in a phased manner over three years, begins immediately with the harmonisation of standards for pharmaceutical products and medical devices for use in the ongoing COVID-19 pandemic. The second phase will analyse and assess existing international, regional, and national standards for their suitability in meeting the unique challenges faced by African healthcare industries before achieving the 3rd phase, which is the harmonization of the related African Standards and their adoption on the continent.
Commenting on the initiative, ITFC CEO, Eng. Hani Salem Sonbol said, “From a trade development standpoint, harmonizing the standards of pharmaceutical products and medical devices in Africa is a crucial first step in facilitating local production and trade within sector. Such standards provide a necessary baseline from which to regulate the sector more effectively, raising the quality of locally produced life-saving drugs and related products, and ensuring timely access to appropriate and affordable medicines, vaccines, and other health services for those who need them most. It will also act as a catalyst for Africa to benefit from a burgeoning pharmaceutical sector, expanding trade opportunities locally and beyond borders thus creating long term sustainable socio-economic impact on the continent”.
The initiative will also serve to enhance trade and investment within Africa’s healthcare industry by boosting the manufacture of high-quality homegrown products and services – objectives laid out within the AfCFTA.
Welcoming the initiative, Mrs. Kanayo Awani, Afreximbank’s Managing Director of the Intra-African Trade Initiative said, “At a time when the demand for quality medicines and medical devices is increasing, Africa needs to reinforce regional value chains to scale-up the supply of quality medical products. This would also contribute to building the continent’s resilience against pandemics like COVID-19 in the future. Furthermore, leveraging on the African Continental Free Trade Agreement, this joint initiative will also facilitate increased intra-African trade in pharmaceuticals and medical consumables.”
As part of a COVID-19 response, the harmonization of standards will facilitate the development of equivalent technical regulations among African countries. Therefore, distribution of medical supplies and equipment from one country to another can be fast-tracked.
A long-term outcome of the initiative will be the emergence of regional supply chains for pharmaceutical and medical devices, which will foster an ecosystem of innovation, local production and the development of medical products for diseases that are currently neglected.
Commenting on the initiative, ARSO’s Secretary General, Dr Hermogene Nsengimana, said “While on one hand COVID-19 has created social distancing as a new norm, on another hand it has brought Africa together by opening our eyes to the need for industrialisation. Standards circulated by ARSO and other standards organisations related to face masks, and hand sanitizers have been used widely by African SMEs to develop locally made personal protective equipment thereby shedding light on the role of standards in industrialization, safety, and trade. This Initiative with Afreximbank and ITFC, will not only help in increasing local production but will also create trust and enable cross border trade and investment for pharmaceutical products and medical devices.”
The African Organisation for Standardisation (ARSO) will play a key role in the development of standardization policies, applying existing principles and procedures that are already set out in the African Standards Harmonisation Model (ASHAM). ARSO’s involvement will be supported by its Council, in addition to a Joint Advisory Group comprised of Regional Economic Communities, and a series of technical committees, which will carry out the harmonisation work with the resources provided under this grant from AFREXIMBANK and ITFC.
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