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Zenith Bank Shareholders Approves N94.19b Total Dividend

Shareholders of Zenith Bank Plc, approved proposed final dividend of N2.70 per share, bringing total dividend for the 2020 financial year to N3 per share, totalling N94.19 billion.

Pofit before tax rose by five per cent to N255.9 billion from N243.3 billion reported in 2019, in spite of a challenging macro-economic environment exacerbated by the COVID 19 pandemic.

Chairman of the Bank, Mr Jim Ovia, in a statement explained that : “The increase arose from a mixture of growth in the topline and a significant reduction in interest expense from N148.5 billion in 2019 to N121.1 billion in 2020. significantly increasing the net interest income from N267.0 billion in 2019 to N299.7 billion in 2020.

“The group recorded a growth in gross earnings of five per cent from N662.3 billion in the previous year to N696.5 billion.

“The group recorded eight per cent growth in non-interest income from N232.1 billion in 2019 to N251.7 billion in 2020 and one per cent increase in interest income from N415.6 billion in 2019 to N420.8 billion in 2020.

“The group’s increased retail activities translated to a corresponding increase in retail deposits and loans.

“Thus, retail deposits grew by N612.7 billion from N1.11 trillion to N1.72 trillion year-on-year (YoY), while savings balances significantly grew by 88 per cent YoY and closed at NGN1.16 trillion,” he said.

He further said that retail drive, coupled with the low-interest yield environment, reduced the cost of funding from 3.0 per cent to 2.1per cent and reduced interest expense.

He, however, said that the low-interest environment also affected the net interest margin, which declined to 7.9 per cent from 8.2 per cent in the current year due to the re-pricing of interest-bearing assets.

“Operating costs grew by 10 per cent YoY but are still tracking well below inflation which at the end of the year stood at 15.75 per cent.

“Although returns on equity and assets also reduced from 23.8 per cent to 22.4 per cent and from 3.4 per cent to 3.1 per cent, respectively.

“The group still delivered improved Earnings per Share, which grew 10 per cent from N6.65 to N7.34 in the current year.

“The group equally increased corporate customer deposits, which alongside the growth in retail deposits, delivered total deposit growth of 25 per cent, to close at N5.34 trillion, driving growth in market share,” he said.

by Online Editor — March 17, 2021 in Banking&Finance 0

Polaris Bank Complies With CBN Naira 4 dollar Scheme

Polaris Bank begins payment of N5 for every $1 of diaspora remittances

Polaris Bank has begun implementation of the regulatory Central Bank of Nigeria’s extra N5 for every dollar received into domiciliary accounts or as cash over the counter.

The Acting Managing Director/Chief Executive Officer, Polaris Bank, Mr Innocent Ike,who revealed this in Lagos said evidence has shown a positive relationship between diaspora remittances and economic growth and as such, the bank will continue to contribute its quota to enhancing economic development in the country.

According to him,the decision was in line with the CBN’s directive and fully aligned with efforts to encourage the inflow of diaspora remittances into the country.

He said the “CBN Naira 4 dollar scheme” as an unprecedented incentive for senders and recipients of international money transfers, adding that the scheme which took effect from 8th March, will run till 8th May, 2021.

“We have started paying extra N5 on every dollar to beneficiaries at our branches. This is in addition to the foreign currency they receive from their family and friends abroad,” he stated.

by Online Editor — March 16, 2021 in Banking&Finance 0

POS Merchants Seek Policy Change On Charge-Back Claims

POS merchants operating in Nigeria has implored the Central Bank of Nigeria (CBN) to change its policy towards Charge-Back claims on POS transactions as fraud increases at an alarming rate.

The extant CBN policy allows POS cardholders to lodge a Charge-back claim within six months of the transaction while the POS Merchants have only 48 hours to defend the claim, otherwise the merchants will be automatically debited by the switch company.

The strategy fraudulent cardholders adopt,the merchant said, is to wait for a month or more before raising a false Charge-Back claim with their banks, knowing that the POS merchants may not defend the claim, because the transaction receipt might either have faded out or might have been archived.

They claimed to have lost millions of Naira to fraudsters as reports show rising cases of this type of fraud in the country,adding that the rise may not be unconnected with the rising public awareness of the process, making fraudsters to exploit the loopholes on daily basis with different Merchant outlets using different cards.

‘’POS Merchants in the country want the CBN to enact a policy that will criminalize the act of false charge-back claims to minimize its occurrence. The merchants want the CBN to mandate banks to reject the false charge-backs at their end using the evidence they already have in their system. The merchants also calls on the CBN to review the six month period, cardholders have to lodge a complaint and the 48 hour response time available for merchants to respond to claims of charge-backs’’,they said.

Advocating that cardholders should have a maximum of one month to claim while merchants should have one to two weeks to defend claims,the POS merchants reiterated their commitment to the apex bank’s policy to entrench a cashless society for the good of the country.

by Online Editor — March 15, 2021 in Banking&Finance 0

AFD Boosts Africa’s Digital Financial Inclusion With $6.95m

The Africa Digital Financial Inclusion Facility (ADFI), supported by the French Development Agency (AFD) and hosted by the African Development Bank (AfDB) has pledged to finance digital financial inclusion in Africa, with six grants totalling USD 6.95 million.

The agency explained that the commitments aim to reduce Africa’s existing gender gap in digital financial services.

ADFI was established by the African Development Bank (AfDB), is co-financed by AFD, the Ministry of the Economy and Finance of the Government of France, the Ministry of Finance of the Government of Luxembourg and the Bill and Melinda Gates Foundation.

The agency said its purpose was to ensure that 332 million more Africans, of which 60% are women, have access to the formal economy by 2030.

The agency said in February 2021, the AfDB Board of Directors approved a series of five grants from this blended finance vehicle, to the benefit of the following organisations: African Cybersecurity Resource Center (ACRC), EthSwitch Share Company, M-Kopa Kenya Limited, Pula Advisors Limited – Kenya, Sinitic Africa and the West African Monetary Agency.

It also said :”A USD 2 million grant to the African Cybersecurity Resource Center (ACRC), aiming at fighting cybercrime across the African continent while strengthening the resilience of digital financial ecosystems, as more and more transactions are made via mobile phones which raise new security concerns. Based in Dakar, with sub-regional offices in West and East- Africa, it will allow the creation of a shared platform to monitor cyber-attacks targeting finance service providers and individuals, the strengthening of their cyber-security via tailor made advisory services, and the fostering of cybersecurity training so as to meet the African demand for expertise.

The funding,the agency said,will target, among other beneficiaries, 20 to 25 million women over five years,adding that a grant of USD 2.33 million to EthSwitch Share Company is dedicated to modernise the payment infrastructure of this initiative led by National Bank of Ethiopia.

It said:”Focusing on providing simple, secure, effective and affordable digital payments infrastructure to the Ethiopian market the payment system will facilitate use of digital financial services fostering digital inclusion, such as social benefits, pensions, e-commerce, transport systems and utility bills. It will be implemented over a three-year period.

“USD 300,000 grant will allow Kenyan company M-Kopa, a financing platform offering underbanked customers access to products and services such as TV and internet, to conduct a research study to improve women’s access to digital financial services and financial literacy programs.

“The study will be carried out among 250 women and 250 men in Kisumu, Eldoret and Machakos counties to compare how men and women access digital financial services. The result will serve to design a pilot smartphone app providing small loans that are relevant to women running small businesses. If successful, the project could be scaled-up to the entire country.

“A USD 1 million grant to agri-fintech firm Pula Advisors Limited, Kenya, a company dedicated to provide agricultural insurance for small-scale farmers to manage climate risk, weather shocks and outbreaks of pests and diseases.

“The funding will enable Pula Advisors to develop digital micro-insurance products for women farmers in Kenya, Nigeria and Zambia and ultimately, to increase the income of farms managed by women by up to 30%.

“A USD 1.024 million grant will finance Sinitic Africa to develop an Artificial Intelligence based customer complaints management system for the use of the national banks of Ghana and Rwanda and the Consumer Protection Commission of Zambia. The system will feature audio complaints, thus allowing access for customers who cannot read or write, as well as main local languages.

“It aims at improving database and action on customer complaints made to financial service providers, improve inclusion of marginalised groups and improve consumer-protection policies. The Sinitic system will be adapted in the following languages: Kinyarwanda, Swahili, French and English in Rwanda; English and Nyanja/Chewa in Zambia; and English and Twi in Ghana.

“A final USD 320,000 grant will finance inclusion of gender by the West African Monetary Agency (WAMA) in the main regulatory frameworks for digital financial services in ECOWAS. This will allow WAMA to analyse the gender gap in its strategies and operations,” the statement explained.

The statement said the project will cover all members of ECOWAS Benin, Burkina Faso, Cote d’Ivoire, Cabo Verde, Ghana, Guinea, Gambia, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo, as it aims at raising women’s participation by 35% in digital financial market operations in the region which has a higher gender disparity than other parts of the continent.

by Online Editor — March 13, 2021 in Banking&Finance 0

UBA’s Full Year Profit Hits N132b

United Bank for Africa Plc (UBA) has disclosed that it earned N131.9 billion as its profit before tax in the full-year ended December 31, 2020. The report was released on Monday.

Its total assets also grew by 37 per cent to N7.7 trillion for the year under review.

The bank’s audited financials filed at the Nigerian Stock Exchange (NSE) revealed that despite the challenging business environment during the COVID-19 pandemic and the resultant effect on economies globally, its Profit Before Tax (PBT) was impressive at N131.9 billion.

The commercial bank said the figure was a huge improvement compared to the N111.3 billion it posted at the end of the 2019 financial year.

Besides, its Profit After Tax (PAT) rose by 27.7 per cent to N113.8 billion compared to N89.1 billion recorded at the end of the previous financial year.

Its gross earnings grew by 10.8 per cent to N620.4 billion, compared to N559.8 billion recorded in the corresponding period of 2019.Its operating Expenses grew by 10.1 percent to N249.8 billion, as against N217.2 billion in 2019, well below average inflation rate of 13.2 per cent for the year, thus reflecting the bank’s cost effectiveness.

In its usual tradition of rewarding shareholders, the Bank proposed a final dividend of N0.35 kobo for every ordinary share of 50 kobo. The final dividend, which is subject to the affirmation of the shareholders at its Annual General Meeting (AGM), will bring the total dividend for the year to N0.52 kobo as the bank had paid an interim dividend of N0.17 kobo earlier in the year.

UBA recorded a remarkable 24 per cent growth (to N2.6 trillion) in loans to customers, whilst customer deposits increased by 48.1 per cent to N5.7 trillion, compared to N3.8 trillion recorded in the corresponding period of 2019, reflecting increased customer confidence, enhanced customer experience, successes from the ongoing business transformation programme and the further deepening of its retail banking franchise.

Speaking on the performance, the Group Managing Director/CEO, Kennedy Uzoka, noted that last year was important for UBA Group, on the strength of penetration of its market share in most of its countries of operation.

He said: “We ended a very challenging year on a reassuring note. The bank recorded double-digit growth in both our top and bottom lines, as gross earnings and after-tax profit grew by 10.8% and 27.7 per cent to N620.4 billion and N113.8 billon respectively. Return on equity was 17.2 per cent, even as our cost-to-income ratio moderated to 61.3 per cent.Our earnings per share of N3.20 is a 26.8 per cent growth from the preceding year, as we continue to ensure maximum value creation for our highly esteemed shareholders.”

“Despite the tumultuous impact of Covid-19 pandemic globally and across our 23 countries of operation, we created N519.0 billion additional loans as we continued to support our customers and their businesses.Customer deposits grew 48.1 per cent to N5.7 trillion, driven primarily by additional N1.8 trillion in retail deposits. As a global bank, we remain well capitalized and determined to successfully drive financial inclusion on the continent through our innovative products and vast network. Our capital adequacy and liquidity ratios came in at 22.4 per cent and 44.3 per cent, well above the respective regulatory minimum of 15 per cent and 30 per cent.”

The Group Chief Financial Official, Ugo Nwaghodoh, said the persistent low interest rate environment in 2020 exerted significant downward pressure on profit margins.

“Notwithstanding, our interest income for the year grew by 5.7 per cent (to N427.9 billion), driven by 8.2 per cent and 7.5 per cent year-on-year growth on interest income on loans and investment securities respectively.Our interest expense declined by eight per cent (to N168.4 billion) driven largely by a 34.2 per cent decline in interest expense on customer deposits in our Nigerian operations, bringing down the Group’s cost of funds to 2.9 per cent, from four per cent in 2019.”

by Online Editor — March 9, 2021 in Banking&Finance 0

NDIC Worried Over Banks’ N5bn Loss To Fraudsters

The Nigeria Deposit Insurance Corporation (NDIC) yesterday said banks in the country lost over N5 billion to fraudsters between January and September 2020.

The agency said the losses, for only nine months, was comparable to the financial losses insured institutions suffered for the entire 12 months of 2019.

The NDIC’s executive director, corporate services, Mrs. Omotola Abiola-Edewor, stated this at the Corporation’s annual capacity building programme for law enforcement agencies.

The programme with the theme: “Effective investigation and prosecution of banking malpractices that led to the failure of banks in Nigeria”, was held in Lagos.

According to her, a total of 52,754 fraud cases were reported to the NDIC against 37,817 in 2018 and 26,182 in 2017, according to the NDIC’s 2019 annual report.

She explained that the fraud incidents could be attributed to an increase in the sophistication of fraud-related techniques, such as hacking, cybercrime as well as an increase in Information Technology related products and usage, fraudulent withdrawals and unauthorised credit.

“The channels and instruments through which the reported frauds and forgeries were perpetrated indicated that ATM/Card-related fraud had the highest frequency, accounting for 49.78 per cent of fraud cases followed by web-based internet banking frauds with 21.02 per cent. However, the value of losses was higher in web-based internet banking frauds against ATM card-related fraud,” she said.

by Online Editor — March 9, 2021 in Banking&Finance 0

AfDB Strenghens Nigeria’s Securities Market With $400,000 Grant

The African Development Bank Group,has signed a $400,000 grant agreement with the Securities and Exchange Commission of Nigeria to strengthen securities market regulation and broaden market instruments.

The funds will go towards strengthening the risk-based supervision framework, regulation of derivatives and green bonds, and build capacity for green finance. The grant will be sourced from the Capital Markets Development Trust Fund, a multi-donor fund administered by the Bank.

“This collaboration further underscores our mutual goal to grow our markets and create viable avenues for sustainable economic development for Nigeria and the region,” said Lamido Yuguda, Director General of the Securities and Exchange Commission at the virtual signing ceremony.

The grant is aligned with the priorities of the Bank’s Country Strategy for Nigeria, which envisages measures to stimulate capital market development to unlock financial resources for productive sector investments, infrastructure development and private sector growth.

Lamin Barrow, Senior Director of the Bank’s Nigeria Country Department, noted the urgency of the implementation of the project.

“At a time when countries are striving to build back better from the ravages of the COVID-19 pandemic, improvement of the enabling regulatory and supervision framework will boost domestic resource mobilisation efforts and leverage private sector contributions to achieve a greener, more environmentally sustainable and inclusive post-pandemic recovery,” Barrow said.

Oscar Onyema, Chief Executive Officer of the Nigerian Stock Exchange, thanked the African Development Bank Group and the Securities and Exchange Commission “for this historic event and partnership, to build in-house capacity at SEC, the Nigerian Stock Exchange, issuers and investors in the sustainable finance space, which will help to meet climate finance commitments in Nigeria.”

The project will support the implementation of the SEC’s Nigeria Capital Market Master Plan 2015-2025 and its vision to position Nigeria’s capital market as a competitive and attractive destination for portfolio investments.

by Online Editor — March 8, 2021 in Banking&Finance 0