…Declare N341bn in PAT
Stories by Blaise Udunze
DESPITE worries that the 2015 full year-end financials would be largely impaired with negative earnings and low lending to the real sector due to regulatory headwinds, five banks gave out a total of N6.20 trillion as loans to the economy.
Before then, there were concerns that the adverse impact of the regulatory headwinds including the implementation of the Treasury Single Account (TSA), the complete phase out of Commission on Turnover (CoT), foreign exchange challenge and bad debts, exposure to the oil and gas sector, would shock corporate earnings.
But results released on the floor of the Nigerian Stock Exchange (NSE) showed that five deposit money banks boosted the real sector with total loans and advances of about N6.209 trillion in the period under review and recording stronger profits deposit challenges.
The five banks, including Zenith Bank, Access Bank, Guaranty Trust Bank, United Bank for Africa and Sterling Bank, declared a combined total profit after tax of N341 billion. The loans and advances of the banks rose by 11.4 per cent above the N5.639 trillion compared to the previous year.
Meanwhile, two banks recorded lower lending figures compared to the three other banks. Sterling Bank loaned N407.5 billion, representing 7.1 per cent decrease lending from the N438.6 billion in 2014, UBA gave out N1.031 trillion as loans and advances, declining 3.8 per cent from N1.072 trillion recorded in the previous year.
On the positive side, Zenith Bank Plc. recorded the highest value of loans in absolute terms, while Access Bank Plc. led in percentage increase. Zenith Bank recorded loans and advances of N1.989 trillion, up by 15 per cent from N1.729 trillion recorded in 2014. Access Bank Plc. followed with N1.409 trillion, showing a jump of 25 per cent compared with N1.123 trillion in 2014. The GTBank Plc. extended loans and advances worth N1.372 trillion to its customers, up by 7.5 per cent from N1.276 trillion recorded in 2014.
However, the breakdown of the banks’ N341 billion PAT showed that Access Bank’s PAT was up by 53 per cent in 2015 to N65.9 billion from N43.1 billion in FY 2014, while UBA recorded a profit growth of 24.5 per cent to N59.7 billion from N47.9 billion in the corresponding period.
The others, like Zenith Bank’s profit, represent an increase of 6.23 per cent or N6.21 billion when compared with the figure for 2014. Sterling Bank’s PAT increased by 14.3 per cent to N10.3 billion as against N9 billion, while Guaranty Trust Bank’s PAT growth remained within single digit region (5.3 per cent Y-o- Y vs 9.6 per cent Y-o-Y in FY 2014) rising to N99.4 billion in FY 2015.
Commenting on the profit of banks despite a turbulent 2015, the Director General of the West African Institute for Finance and Economic Management (WAIFEM), Prof. Akpan Ekpo, regretted that banks were making profit by investing in government financial papers, which is risk-less rather than long-term investment, stressing that their interest is in making profits for their shareholders, a situation, he said, is not healthy for the economy in the future.
On the loans and advances of banks, market analysts said the increase in lending, despite challenges, is a positive development that should be improved upon by the banks in the current financial year.
MPC to keep rates unchanged, focus on stimulating growth –Experts
ECONOMIC policy experts yesterday predicted the Central Bank of Nigeria’s (CBN)’s Monetary Policy Committee (MPC) may adopt a wait-and-see approach of keeping all rates constant while continuing to harp on structural reforms and policy coordination with the fiscal arm.
The two-day MPC meeting, which commenced Monday and ends today, is holding for the second time this year after its last meeting in January 2016 to review developments in the domestic and global fronts as well as take key policy decisions.
The expected outcome of the meeting is the result of an increase in inflation pressure, along with the backdrop of renewed optimism in the global economy, albeit tepid, sustained sub-optimal domestic economic performance and elevated headwinds on potential real economic growth.
In the domestic economy, however, the release of several economic data continues to mirror the current challenges that have beset the country as well as the investment landscape.
Headline inflation rose to the highest level since 2012 to 11.4 per cent in February 2016, reeling from the impacts of higher electricity tariff, imported and domestic food prices. This has weakened the purchasing power of consumers in an atmosphere of lower per-capita income growth and also lowered real return on investments.
Irrespective of the dovish stance adopted by the CBN since H2:2015 with the objective to spur credit growth to the real sector and catalyse GDP growth, the pass through effect of this policy thrust has been muted on aggregate economic data. Credit to the private sector contracted 0.1 per cent (to N18.9 trillion) between June 2015 and January 2016 while demand deposits have grown 31 per cent (to N6.5 trillion).
Meanwhile, investment bankers and top financial analysts at Afrinvest West expect that the gamut of issues in the global and domestic economy would set the tone of discourse at the MPC meeting with the committee likely to deliberate on policy measures to lift growth, attract foreign private capital and ease pressure on consumer prices.
“Committee members are increasingly communicating dovish statements and are likely to rest on the (valid) evidence that current pressure on prices is feeding from cost push factors and not liquidity driven to dismiss the option of using the MPR or SDF instruments to stabilise prices.
“The focus of committee members has shifted from attracting short term private capital that typically responds to tightening; a policy tightening without adjustment of exchange rate or allowing more flexibility to deepen liquidity and access will only result in tightening of financing conditions in the economy and pressure cost/prices further,” the analysts noted.
MoneyGram, GTBank launch service to boost remittance market
MONEYGRAM and Guaranty Trust Bank have launched MoneyGram Receive Service into Nigeria’s $21 billion annual remittance market.
This service will be available through MoneyGram’s cash to account service across the GTBank network.
Customers in Nigeria can receive money from friends and family in 129 countries directly into their personal GTBank accounts within minutes. These funds can be accessed as customers would normally do on all deposits into their accounts either in person, online or through an ATM.
Speaking at the launch in Lagos recently, MoneyGram CEO, Alex Holmes, said that remittances were crucial to the nation’s economy as Nigerians living abroad sent more than $21 billion back into the country in 2015.
He said that the partnership with the bank would increase MoneyGram’s connection to almost 1.5 billion bank accounts in five of the world’s largest remittance receive markets – Nigeria, China, India, Mexico and the Philippines.
Holmes explained that MoneyGram’s account deposit service makes it easy and convenient for both the sender and the receiver to transfer and receive funds.
SERAP threatens to sue CBN over recruitment process
THE Socio-Economic Rights and Accountability Project (SERAP), a civil society organisation, has requested the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, to withdraw hundreds of letters of employment issued to some of its employees, as their engagement did not follow due process.
In an open letter to the apex bank governor, SERAP requested him to put in place a system of recruitment and hiring based on the principles of non-discrimination, transparency, participation and objective criteria such as merit, equity and aptitude.
The letter signed by the Executive Director of SERAP, Adetokunbo Mumuni, warned that, “should Emefiele and the CBN fail and/or neglect to act as requested within 14 days of the receipt and/or publication of this letter, the registered trustees of SERAP shall take appropriate legal action to ensure effective remedies for millions of Nigerians that have been denied equal opportunity to participate in the recruitment process.
“This corrupt process amounts to a fundamental breach of constitutionally and internationally recognised human rights of millions of Nigerians particularly the right to equality and non-discrimination to work and to human dignity.”
The statement reads in part: “Instead of the CBN promoting equality of opportunity and access to employment for all Nigerians, it has perpetrated discrimination and therefore denied an opportunity for economic self reliance and in many cases a means for millions of Nigerians to escape poverty and live a life of dignity.
“The process also directly breaches Article 7 of the UN Convention against Corruption, which Nigeria has ratified. Article 7 requires institutions like the CBN to adopt, maintain and strengthen systems for the recruitment and hiring of civil servants that are based on principles of transparency and objective criteria such as merit, equity and aptitude.”
Buhari tasks banks on improved lending to agric sector
PRESIDENT Muhammadu Buhari yesterday tasked commercial banks to boost lending to the agriculture sector, part of his drive to encourage diversification away from oil production mono-economy.
Credit to the Private Sector including the agricultural sector contracted 0.1per cent (to N18.9trillion) between June 2015 and January 2016. Buhari also vowed to improve energy provision in a country long blighted by power shortages.
The nation had been hit hard by a fall in crude prices that has cut vital oil revenues – which account for 70 percent of national income – causing the economy to grow by just 2.8 percent in 2015, its slowest pace in decades. “Our real wealth is in farming, livestock, hatcheries, fishery, horticulture and forestry,” Buhari told a gathering of the advisory National Economic Council (NEC) attended by Nigeria’s 36 state governors, the budget minister and central bank governor.