Banks feed fat on interest margin, lending rate re

The spread between deposit rate and lending rate has remained high at 20.14 per cent as maximum lending rate as at December 2010 was 21.84 while average deposit rate stood at 1.95 per cent.

The CBN in its economic report to the monetary policy committee said that “the average maximum lending rate declined from 22.20 in September, 2010 to 21.84 per cent in November 2010. The average prime lending rate also fell from 16.66 in September to 16.11 per cent in November, 2010.

This has confirmed the allegations that the real sector can not access credit as a result of the prevailing high interest rate.

According to the CBN “The weighted average savings rate declined consistently from 3.2 and 1.95 per cent in March and June, 2010 to 1.49 and 1.48 per cent in September and November, 2010, respectively. The consolidated deposit rate which declined from 2.09 per cent in June to 2.07 per cent in September rose to 2.36 per cent in November, 2010.

Thus, the spread between the average maximum lending rate and the consolidated deposit rate widened from 19.94 per cent in June to 20.14 per cent September, before narrowing to 19.48 per cent in November, 2010.

Source: Vanguard

Date: 22/03/2011

Access, 3 other banks shop for new GMD/CEOs

The search for suitable replacements as Group Managing Director/Chief Executive Officers (GMD/CEOs) may have started in earnest in four top Nigerian banks whose chief executives are due to retire in less than one year.
BH investigations confirmed that the affected banks and GMD/CEOs are GTBank Plc, Mr. Olutayo Aderinokun; Mr. Reginald Ihejiahi, Fidelity Bank Plc; Mr. Aigboje Aig-Imokhuede, Access Bank Plc, and Mr. Falalu Bello, Unity Bank Plc.These bankers are expected to retire from their banks in keeping with the tenure policy of the Central Bank of Nigeria (CBN) which in 2010 pegged the age limit of the banks’ chiefs to a maximum cumulative of 10 years. This development has prompted serious lobbies by experienced banks especially in such banks where there are no clear cut succession plans.

According to the CBN, the tenure policy was enunciated as part of the banking sector reform agenda to ensure corporate governance in the nation's banking sector.

Source: Biz Hallmark

Nigeria’s current account worsens by 62% – CBN

Nigeria’s current account fell by 62 per cent in the third quarter of last year due to huge import bill and decline in exports, says the Central Bank of Nigeria, CBN.

The current account is one of the two primary components of the balance of payments, the other being the capital account. Current account is the sum of the balance of trade (exports minus imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid).

Central Bank said in its quarterly external sector report for third quarter of 2010: “The estimated current account surplus which stood at US$ 3,614.92 million in Q2, 2010 declined to US$ 1,359.75 million in Q3, 2010.

When compared with the level in the corresponding quarter of 2009, the decline in the current account surplus was steep.”

The decline, according to the apex bank, was occasioned by “high import bills (visible and invisible) and a slight drop in aggregate exports, reflecting the country’s overdependence on imported goods and services coupled with the fact that the services sub-sector is not competitive, occasioned largely by the absence of technical know-how required for external competitiveness.

Date: 24/02/2011

Source: Vanguard

Calabar is the capital of Cross River State, which situated in the coastal region of southeastern Nigeria. Located in the Niger Delta, Cross River State occupies 20,156 square kilometers. It shares boundaries with Benue State to the north, Enugu and Abia states to the west, to the east by Cameroon Republic and to the south by Akwa-Ibom and the Atlantic Ocean.
The state is composed of three major ethnic groups-these are the Efik, the Ejagham and the Bekwarra. The Efik language is very widely spoken in Cross River State, even as far as Arochukwu in neighboring Abia state.

The government of Cross River State has made tourism development a priority and is working to leverage the contributions of the private sector to brand Cross River as a premier destination for Nigerians and foreigners alike. The Cross River State Tourism Bureau is a key player in this effort and has succeeded in putting Calabar on the map with their successful Christmas Festival and Carnival Calabar that spans the month of December. Investments in hotels in Calabar show good increase and the volume of air traffic has increased greatly.

Source: Bizhallmark

Date: 22/03/2011

Experts identify Land Use Act, cumbersome registration process as barriers

The World Bank has estimated that the cost of bridging Nigeria’s 17 million housing deficit is N59.5 trillion, underlining the vast and untapped investment potential of the country’s real estate sector.  

Experts have however identified the Land Use Act of 1978 which resides ownership of land in state governors, and a cumbersome property registration process as major barriers to housing development and home-ownership, leading to the country’s huge housing deficit.

According to Fortune Ebie, former managing director of the Federal Housing Authority (FHA), until the Act is reviewed or amended, improved housing development will continue to be a pipe-dream.

Real estate and financial experts who agree with the World Bank’s submission also add that the real estate sector remains a viable option for investors seeking guaranteed returns on investments, saying that several opportunities exist in the sector.

In the estimation of the World Bank, some of the numerous opportunities available in the sector include private equity players who are capable of making big investments; financial institutions that can float real estate funds; pension regulators who can build a robust framework for real estate funds investment; adaptive re-use of properties by banks in the form of converting properties and taking stakes in new deals; opportunities for hotels, events and recreational centres, shopping malls, estates, among others.

Currently, Nigeria’s real estate industry accounts for between four and five percent of total Gross Domestic Product (GDP), growing by 10.48 percent in the second quarter of 2010.

Source: (BusinessDay, 25/11/2010)

A ray of hope beamed on the Federal Government’s land reform policy yesterday as the Federal Executive Council (FEC) directed the ministry of finance to execute the $6.8 billion Global Environment Facility (GEF) grant on behalf of Nigeria.

The land reform policy was the 7-point agenda of late President Umar Yar’Adua’s administration. Sources close to the policy told BusinessDay last night that the grant will now ease the execution of the policy which has been on the drawing board for over three years. An analyst who pleaded anonymity said the issue of land management has been a thorny one that requires careful attention, adding that it would also need to address the Land Use Act. The analyst noted that the execution of the reform policy should ease access to land for both residential and investment purposes which the Land Use Act could not achieve.

Source: Business Day

Date: 07/10/2010

This recent event in the banking sector, after all, could be the beginning of new tidings to hitherto 'rescued' banks, which might easily have gone the way of other banks that have now gone defunct. 

So it was good news when Sanusi Laimido Sanusi, governor, Central Bank of Nigeria (CBN) last week after the Monetary Policy Committee (MPC), said a number of deals were likely going to be unveiled this week. Thus it was naturally welcoming when Access Bank announced its intention to go into mergers with Intercontinental Bank plc.

In many ways, this announcement meant re-assurance to the staff; at least to majority that worked with Intercontinental that their jobs were still secure. But most importantly, was the boost the combination of businesses of Access Bank and Intercontinental Bank would give to the economy.

Source: Business Day

Date: 30/03/2011

Buoyed by remarkable growth in foreign and local investments in the sector, and the phenomenal rise in number of Nigerians now using the services, the contribution of the telecom sector to Nigeria’s gross domestic product (GDP) in 2011 is expected to surpass the combined contributions of manufacturing, banking, insurance and solid minerals sectors, figures from the Ministry of Finance has indicated.

The contribution of the sector to Nigeria’s GDP for this year is estimated at 7.6 per cent, which computed with the country’s GDP figures put at $206.66 billion by the International Monetary Fund (IMF), stands at $15.7 billion. Finance and insurance, manufacturing, and solid minerals are projected to contribute 2.5 per cent, 4.5 per cent and 0.4 per cent respectively to the national GDP this year. The figures put together amounts to 7.4 per cent which is 0.2 per cent less than the 7.6 per cent expected from telecom this year.

Source: Business day

Date: 17/02/2011

Access Bank plc of Nigeria and two other banks, Citi Bank of America and BICICI Bank of France have shut down their operations in Cote d’Ivoire, following prolonged political stalemate in that country.

BICICI is a subsidiary of the French BNP Baribas.

A statement posted on the website of the BICICI said the bank had to close temporarily for security reasons. “We regret to announce to you that BICICI temporarily suspended its activities from this day February 14, 2011.

“We are no longer able to ensure that our work is done in satisfactory legal and accounting conditions for our customers or ensure the physical security of our staff,” the statement signed by the bank’s Managing Director, Yao Kouassi, said.

Source: Punch

Date: 16/02/2011

The Central Bank of Nigeria has intervened in the foreign exchange market, offering $200m for sale at the foreign exchange auction.

According to information obtained by our correspondent on Wednesday, the total amount sold at the Wholesale Dutch Auction System was $200m while the total amount demanded was $230.29m.

The marginal bid was $150.47 while the weighted average rate was $150.54. The highest successful bid rate stood at $150.61 and the lowest bid rate was $150.45.

The number of successful banks, according to the information was 17, while the number of unsuccessful banks was three. The banks that participated in the WDAS were 20 in all.

Meanwhile, the naira had appreciated slightly against the dollar at the inter-bank market on Monday as the previous week’s foreign exchange sales by energy companies continued to provide support for the local currency.

Inter-bank lending rates rose by 1.66 per cent to an average of 9.66 per cent on Friday, from eight per cent recorded the previous week.

Source: Punch

Date: 16/02/2011

The Nigerian naira fell on Wednesday on the interbank forex market as the Central Bank of Nigeria (CBN) sold $800 million at its last bi-weekly auction of the year.

The local currency closed at N153.65 to the dollar on the interbank market, down from N152.40 a dollar the previous day and its lowest since September last year, as companies rushed to buy dollars to stock up on goods and raw materials for the year end.

At the official window, the Central Bank sold $800 million at N149.17 to the dollar, short of the $837.79 million demanded, but twice the $400 million sold at N149.06 to the dollar at Monday's auction.

The closure of the official window for the year by theCentral Bank after today's auction put further pressure on available dollars in the market and caused the naira to weaken further," one dealer said.

Traders said there was increased demand for the dollar as many importers made last minute bids at the official window, while the shortfall in supply at the bi-weekly auction was redirected to the interbank market.

"The naira could depreciate further until next week when some companies are expected to wind-up for the year," another dealer said.

Source: (BusinessDay 14/12/2010)

U.S. stocks fell this week, led by banks, amid concern that an Irish financial bailout will fail to stem Europe’s debt crisis, China will raise interest rates to cool inflation and the Korean peninsula conflict will escalate. “Those things paint a pretty grave image,” said Peter Sorrentino, who helps oversee $13.8 billion at Huntington Asset Advisors in Cincinnati.

“They serve to keep the real fundamental investors on the sidelines because they’re reasons not to take a risk.” JPMorgan Chase & Co. and Bank of America Corp. led declines in the Dow Jones Industrial Average, both losing more than 4.6 percent, after Ireland became the second euro country to seek a rescue as the cost of saving its banks threatened a rerun of the Greek debt crisis. Hewlett-Packard Co. limited losses for the benchmark, rising after its profit forecast exceeded estimates. Source: (BusinessDay, 29/11/2010)