Fitch Ratings Reviews Nigerian Banks’ Support Rating

Fitch Ratings, First Bank, seven energyFitch Ratings has revised down the Support Rating Floors (SRF) of 10 Nigerian banks to ‘no floor’ and downgraded nine banks’ Support Ratings (SR) to ‘5’ following a reassessment of potential sovereign support for the banking sector.

As a consequence, the long-term issuer default ratings of First Bank of Nigeria Limited, FBN Holdings PLC, Diamond Bank PLC, Fidelity Bank PLC, First City Monument Bank Limited and Union Bank of Nigeria PLC are downgraded to ‘B-‘ from ‘B’, in line with their stand-alone creditworthiness as defined by their viability ratings.

The agency has affirmed the long-term IDRS of Zenith Bank PLC, Guaranty Trust Bank PLC, Access Bank PLC, United Bank for Africa PLC, Wema Bank PLC and Bank of Industry (BOI).

The downgrade of the nine banks’ SRS and the revision of 10 banks’  SRFs to ‘no floor’ reflects Fitch’s view that senior creditors can no longer rely on receiving full and timely extraordinary support from the Nigerian sovereign if any of the banks become non-viable.

Nigerian Banks Publish List Of Debtors

Nigerian Banks Publish List Of DebtorsCommercial banks have resumed publishing the lists of delinquent debtors including individuals and companies in line with the Central Bank of Nigeria (CBN) directives.

Last year, the CBN ordered banks to publish a list of debtors that failed to meet the deadline in at least three national newspapers each quarter effective from may the 1st 2015.

Delinquent borrowers are expected to get three months to start repayment, while borrowers whose loans remain non-performing after that period will be banned from Nigeria’s foreign-exchange and government bond markets.

Nigerian Lawmakers To Quiz MTN, Others

MTN, NCC, FG, Lawmakers, Nigerian banksThe National Assembly has invited South Africa’s MTN, Nigeria’s Minister of Trade and Investment, Mr Okechukwu Enelamah and four commercial banks to an investigative hearing.

A statement from the upper chamber of parliament says the hearing is scheduled for October 20 with an aim to investigate MTN’s illegal transfer of 14 billion dollars out of the country.

The four banks invited by the lawmakers include, Stanbic IBTC, Standard Chartered, Citi Bank and Diamond Bank.

According to the statement, the transfer was carried out between 2006 and 2016.

MTN’s share price in Johannesburg Stock Exchange has fallen 2.3 percent partly on news of the hearing.

The invite is coming after a reduced fine of 1.1 billion dollars was meted out on the telecom giant.

Diamond Bank, FCMB To Raise New Capital

Diamond Bank, FCMBDiamond Bank is considering raising fresh capital and selling some assets in order to maintain its capital ratios.

The bank’s management says the capital plan will ensure it meets all regulatory requirements both in the short term and in the future.

Diamond Bank’s capital adequacy ratio had fallen to 15.6 percent of assets by mid-year from 18.6 percent a year ago.

According to Reuters, the bank’s chief executive, Uzoma Dozie, told an analysts’ conference call, “We are doing a capital management plan and that will determine how much capital we want to raise, tenor and size.

“We don’t have any need to grow our branch network any more. We are also looking at some assets that we can dispose of and we are a long way into that.”

Meanwhile, mid-tier bank FCMB plans to raise 10 to 15 billion naira of Tier II capital to boost its balance sheet and will target its retail investors for the offering.

FCMB’s capital adequacy ratio was close to the regulatory limit of 15 percent of assets at mid-year, and the bank’s management say the capital raising is to provide an additional cushion.

FCMB CEO, Mr Ladi Balogun, said, “For the Tier II we would be looking at anywhere in the range of 10 to 15 billion naira. It’s really going to be targeted at retail because we feel that the rates from institutions will be high.”

NDIC Decries Rise In Non-Performing Insider Loans In Banks

NDIC, Bank LoansThe Managing Director/Chief Executive of Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umaru Ibrahim has expressed concern over the increasing wave of non-performing insider loans in various banks and its consequence on the stability of the nation’s banking system. 

Alhaji Ibrahim expressed this concern while receiving the newly elected President and Chairman of Council of the Chartered Institute of Bankers of Nigeria (CIBN), Professor Segun Ajibola and some of his executive members who paid a courtesy call on the NDIC Senior Management in Abuja.

According to him, the development had posed credibility questions which were capable of eroding public confidence in the banking system.

He called for strict compliance with the existing code of conduct and a review of the existing laws and regulations to provide stiffer penalties for directors who take advantage of their positions and fail to pay back their loans.

The NDIC CEO observed that the situation in which casual staff accounted for about 25% of the banking industry workforce, had a negative impact on the industry.

Alhaji Ibrahim noted with concern the practice of some banks that assign sensitive roles to casual staff; thereby exposing the banking industry to cases of fraud and forgeries.

Speaking on the recent staff rationalisation embarked upon by banks, Alhaji Ibrahim urged the banks to exercise caution so as not to create industrial unrest in the industry.

He called on the CIBN to intervene by advising its members on the aim of the rationalisation which should be to weed out bad eggs from the industry.

The NDIC CEO emphasized that the Corporation would continue to partner with the CIBN and other professional bodies towards achieving effective capacity building among its staff.

Alhaji Ibrahim disclosed that 77 members of staff of the Corporation were currently undergoing the Bangor/CB MBA programme which commenced three years ago.

The Bangor/CB MBA programme is an initiative of the NDIC, the CIBN and the Bangor University, Scotland where staff of the Corporation undergo up to 24 months training programme and graduate with dual certification: an MBA and Chartered Banker of Scotland.  Fourteen (14) members of staff had already graduated from the programme.

He further requested the CIBN to fast track the accreditation of the Corporation’s training academy and the introduction of the Deposit Insurance System (DIS) in the institute’s curricula in order to broaden the scope of professionalism in the banking industry.

In his response, the President/Chairman of Council of the Chartered Institute of Bankers of Nigeria (CIBN), Prof. Segun Ajibola, expressed the appreciation of the CIBN to the Corporation for positive contributions to the activities and programmes of the Institute and its support towards the establishment of the CIBN Bankers House in Abuja.

Prof. Ajibola also commended the Corporation for its contribution in ensuring stability in the banking system.

The President/Chairman of Council of the CIBN assured the MD/CEO that the accreditation committee of the institute would soon visit the NDIC Academy.

He, however, appealed to the MD/CEO on the need for further collaboration with the institute on training and other issues of mutual interest.

On staff casualization in the banks, Prof. Ajibola pledged to table the matter at the CIBN’s next meeting with banks’ CEOs with a view to addressing the issues.

He stated that efforts were being put in place by the CIBN to enhance the capacity of bank staff, particularly in credit administration.

First Bank Reacts To Latest Fitch Ratings

Fitch Ratings, First BankThe Managing Director of First Bank of Nigeria, Mr Adesola Adeduntan, on Tuesday in Lagos, said that the lender’s business activities are integrated with the Nigerian economy in a way that the bank’s position could be impacted by Nigeria’s overall performance and ratings.

Mr Adeduntan was reacting to the latest Fitch ratings report that shaved First Bank’s issuer default rating to ‘B’ from B+, and FBN Holdings rating cut to BBB+ from ‘A’.

The new head of Nigeria’s largest lender says First Bank is proud to be associated with the Nigerian economy, but currently working to strengthen risk management processes and launch new digital channels, targeted at two million customers of the bank, in the first instance.

First Bank has an estimated ten million customers, which the lender plans to migrate onto new technology platforms, including off-site automated teller machines as well as agency banking.

Fitch ratings affirmed the issuer default ratings of eight Nigerian commercial banks and affirmed the viability ratings of all the banks.

However, the long-term foreign currency issuer default ratings of First Bank and UBA Group was downgraded to ‘B’ from ‘B+’ with a stable outlook.

The global rating agency downgraded the national long-term rating of FBN Holdings Plc to ‘BBB+.

Fitch ratings also cut the bank of industry’s long-term issuer default rating to ‘B+’ from ‘BB-‘ and support rating to ‘4’ from ‘3’.

The latest Fitch report expects Nigerian banks to remain profitable in 2016 despite slower asset growth and higher loan impairment charges.

Jaiz Bank Gets License To Operate As A National Bank

Jaiz BankNigeria’s first Islamic banking institution, Jaiz Bank, has been granted license to operate as a national bank.

Chairman of the board of directors of the bank, Alhaji Umar Abdul-Muttalab, who spoke at a meeting in Abuja, said that the bank plans to spread its branches across the 36 states of the federation and the Federal Capital Territory in the next months.

The meeting was organised to fashion out ways of making the bank function better in the days ahead.

Part of the plan, according to officials of the bank, is to improve on its services through its various arms and with the feat just achieved, they promised a better deal for Nigerians willing to bank with them.

Alhaji Abdul-Mutallab announced series of measures taken by the bank, especially through its subsidiaries, in contributing their quota to the nation’s development.

In his response, the Sultan of Sokoto, Dr. Saad Abubakar, applauded the management of the bank for a job well done over the years. He also promised to collaborate closely with the bank.

Established over three years ago with 25 branches in some parts of the country, officials of the bank promise to achieve more using its national license.

They also want Nigerians to look forward to non-interest banking at its best in the days ahead.

Apex Bank Says Nigerian Banks Are Strong

Nigerian BanksThe Central Bank of Nigeria (CBN) has assured customers of deposit money banks and stakeholders that the banking industry remains strong.

It reiterated that the it would not allow the system to be used as a conduit for illicit transactions.

The CBN’s statement comes against the backdrop of the recent spate of investigations and arrests of some bank officials by the anti-graft agency, the Economic and Financial crimes Commission.

In the statement, by the Acting Director of Communication of the CBN, Mr Isaac Okoroafor, said that the bank would carry out its own special investigations to determine the accuracy of some of the allegations.

Mr Okoroafor said that the apex bank would determine the extent and the persons that may be involved in such activities and also ensure that the truth was revealed.

BVN Deadline: Anambra Citizens Call For Extension

BVNBarely 24 hours to the Central Bank of Nigeria (CBN) deadline for the registration for Bank Verification Number (BVN), citizens in Anambra State have called for an extension of the exercise.

The citizens are demanding for another one month, to enable those in the rural areas to participate.

While speaking in Awka, the Anambra State capital, some of the residents said that many people are yet to be verified, due to reasons ranging from time constraints to access to where banks are located, especially for those in the rural areas.

They, however, hailed the Central Bank initiative on the BVN exercise, as they agreed with the need to check trends in the banking system, in order to ensure sanity while clamping down on corruption and fraud.

According to the data released by the Central Bank of Nigeria (CBN) and the Nigerian Inter-Bank Settlement System (NIBSS) in September 2015, out of about 52 million active accounts owned by adults and children in various banks, the total enrollment for the BVN stood at about 20 million.

About 32 million of bank customers were yet to register and obtain their Bank Verification Numbers (BVN), less than five weeks to the October 31 deadline.

The BVN scheme was introduced by the Apex bank in collaboration with the bankers’ committee on February 14, 2014.

This is aimed at ensuring a unique identity for every bank customer and other users of financial services in the country, through the use of customers’ bio-metrics as a means of identification.

Recently, the CBN announced that prospective buyers of foreign currencies must show their BVN to banks and Bureau De Change operators before they would be allowed to do the transactions. This is to take effect from November 1.

BVN: 32 Million Bank Customers Yet To Register

BVNAbout 32 million of bank customers are yet to register and obtain their Bank Verification Numbers (BVN), less than five weeks to the October 31 deadline.

According to the latest data from the Central Bank of Nigeria (CBN) and the Nigerian Inter-Bank Settlement System (NIBSS) on Sunday, out of about 52 million active accounts owned by adults and children in various banks, the total enrollment for the BVN stood at about 20 million.

According to the statistics, out of the 20 million registered bank customers, only about 14 million accounts have been linked to the BVN as of September 2015.

The BVN scheme was introduced by the Apex bank in collaboration with the bankers’ committee on February 14, 2014.

This is aimed at ensuring a unique identity for every bank customer and other users of financial services in the country, through the use of customers’ bio-metrics as a means of identification.

Nigeria Is In The Right Direction – AMCON Boss

AMCONThe Nigerian intervention model for financial crisis has been rated one of the best in the world.

The Managing Director and Chief Executive of the Assets Management Company of Nigeria (AMCON), Mr Chike Obi, made this assertion during a conversation on Channels Television on Tuesday.

He said that the AMCON as an intervention model had become world acclaimed as one of the best ways to stabilize the financial sector and handle financial crisis in the future.

Mr Obi noted that Nigeria was the only country whose Gross Domestic Product (GDP) continued to remain in the positive during financial crisis.

There had been criticisms against the AMCON system of operation and Mr Obi noted that many were products of several assumptions.

He explained that the AMCON was not out to protect badly managed commercial banks but rather to protect, first the depositors.

“This is the first time in the history of mankind where you had a major financial crisis and no depositor lost a kobo. So its the depositors that were protected, not the banks,” he said.

He noted that if the commercial banks were allowed to “go down”, depositors would have lost their monies.

Mr Obi opined that the solution to the challenges facing Nigeria lies in building institutions and foundations for growth and development.

He noted that solving the issues of corruption in different sectors of the economy would not happen quickly as they cannot be rushed into existence, rather, it would require patience and careful planning.

While admitting that it would be inappropriate for him to defend everything that has been done in the management of the Nigerian financial sector, he added that he would not also ignore all the good things that had been done.

He encouraged Nigerians to look farther into the future as the country had started moving in the right direction that would guarantee a better future for them.

He cited the power sector privatization as one of such policies that would in the end guarantee a better life in the next three to five years, even if there were still challenges at the moment.

Mr Obi, however, also admitted that some mistakes might have been made in the past but what was important was for the leadership of different sectors to learn from their mistakes.