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CBN Asks Banks to Pay 30% MPR on Savings

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Central Bank of Nigeria (CBN) has asked banks to pay a minimum of 30 per cent of Monetary Policy Rate (MPR) as interest on savings accounts, meaning that at the current MPR of 12 per cent, saving accounts will attract minimum of 3.6 per cent per annum.

The directive is expected to improve the savings culture among the people and provide clarity on banking terms.

Dr. Kingsley Moghalu , CBN deputy governor, Financial System Stability, in a report   said the MPR, which is the benchmark rate by which the apex bank determines interest rate, has been kept at 12 per cent since October 2012.

Moghalu said interest rates were relatively stable in the money market during the first half of last year, though lower than their levels in the second half of 2012.

He said the report showed average interbank call and open buyback (OBB) rates stood at 11.55 and 11.36 per cent during the review period, down from 13.44 and 12.87 per cent in the second half of 2012.

The Deputy Governor said average term deposit rate also fell to 6.87 per cent, from 7.51 per cent in the second half of 2012. Also, prime and maximum lending rates fell by 0.43 a n d 0 . 3 4 p e r c e n t a g e p o i n t s to 16.58 and 24.18 per cent in the review period.

Therefore, the spread between the maximum lending and the average term deposit rates stood at 17.31 percentage points, a 0.3 percentage point higher than the level in the second half of 2012.

He said with the inflation rate at 8.4 per cent in June 2013, most deposit rates were negative in real terms, while lending and most money market rates were positive in real terms. The negative real rate of return on deposits acts as a disincentive to savings.

“Thus, as part of the ongoing efforts to improve the savings culture, the CBN revised the Guide to Bank Charges requiring banks to pay a minimum of 30 per cent of MPR on savings accounts, among others,” he said.

He explained that inflationary pressures moderated in the first half of 2013, partly in response to the tight monetary policy stance of the CBN and the stability in the supply of petroleum products.

“Year-on-year headline inflation decelerated to 8.4 per cent in June 2013, from 12 per cent in December 2012. Also, core and food inflation declined to 5.5 and 9.6 per cent, from their respective rates of 13.7 and 10.2 per cent in December 2012,” he said while listing key risks to inflation in the short to medium term as possible accelerated fiscal releases in the latter part of the year and the upward review of electricity tariffs.

He said the growth in money supply was sluggish in the first half of last year. “Broad money supply (M2), grew by 0.7 per cent to N15.5 trillion, compared with the growth of 14.8 per cent at the end of the preceding period.

On an annualised basis, M2 grew by 1.4 per cent, compared with the indicative benchmark of 16.4 per cent for last fiscal year.

“The growth in money supply reflected the 4.7 per cent rise in net domestic credit of the banking system, demand deposits (DD) declined by 11.2 and 2.3 per cent,” he said.


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E-Financial

Nigerians Pay Five Levies for Electronic Transactions

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A bank customer in Nigeria pays as much as five different charges electronic transactions on one account and Netizens are not happy about it.

Nigerians Pay Five levies for Electronic Transactions

Only on Monday, Central Bank of Nigeria (CBN), added another 0.5 per cent cybersecurity levy to be charged on select bank transactions.

However, the apex bank exempted loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, and intra-bank transfers between customers of the same bank from the levy.

Also exempted from the levy were inter-branch transfers within a bank, cheque clearing and settlements, ⁠Letters of Credits, ⁠and Banks’ recapitalisation-related funding only bulk funds movement from collection accounts, savings, and deposits, including transactions involving long-term investments, among others.

But below is the list of charges Nigerians have to pay whenever they make electronic transfers.

  1. Cybersecurity levy

N5 is charged on the transaction of N1,000

N50 is charged on the transaction of N10,000

N500 is charged on the transaction of N100,000

N5,000 is charged on the transaction of N1,000,000

N50,000 is charged on the transaction of N10,000,000

  1. Transfer fee

N10 is being charged on the transaction below N5,000

N25 is being charged on the transaction between 5,001 and N50,000

N50 is being charged on transactions above N50,000

  1. Stamp duties

N50 is being charged on transactions between N10,000 and N10,000,000

  1. Short Messaging Service (SMS)

N4 is being charged on each electronic transfer notification

(Customers who use e-mail-only notification are not charged for this service)

  1. Value Added Tax (VAT)

N0.75 is being charged on the N10 transfer fee

N1.875 is being charged on the N25 transfer fee

N3.75 is being charged on the N50 transfer fee.

 

 


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E-Financial

AMMBAN Decries CBN Directive on CAC Registration of PoS Operators

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Association of Mobile Money and Bank Agents of Nigeria (AMMBAN) has frowned at the recent directive by Central Bank of Nigeria that Point of Sale terminal operators should register with Corporate Affairs Commission by July 7, 2024.

They argued that implementing the directive will put over 70 percent of PoS operators out of business thereby frustrating financial inclusion initiative of the federal government.

Mr. Fasasi Atanda, national president, AMMBAN, said that the directive contradicts the current CBN agent banking regulations which clearly allow individuals to be onboarded as agents under the sub-agent category.

“Currently Nigeria has over 1.8 million agents in which over 70 percent are sub-agents without registered businesses, operating under agent network – super agent arrangements. They are the most penetrating channel of financial inclusion. Now, we want to eliminate them with CAC registration,” he stated.

It would be recalled that the Federal Government through the Corporate Affairs Commission on Monday issued a two-month registration deadline to Point of Sales companies, to register their agents, merchants, and individuals with the commission in line with legal requirements and the directives of the Central Bank of Nigeria.

The agreement was reached during a meeting between Fintechs and the Registrar-General CAC, Hussaini Ishaq Magaji, in Abuja.

Speaking at the meeting, the CAC boss said the measure aims at safeguarding the businesses of Fintech’s customers and strengthening the economy.

He further stressed that the action was equally backed by Section 863, Subsection 1 of the Companies and Allied Matters Act, CAMA 2020 as well as the 2013 CBN guidelines on agent banking.

The CAC boss said the timeline for the registration, which will expire on July 7, 2024, was not targeted at any groups or individuals but genuinely aimed at providing protection for businesses.


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UBA Consolidates Gains as Gross Earnings Rise by 110 Percent, Profit Hits N156Bn

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United Bank for Africa Plc (UBA), Africa’s Global Bank , has released its financial results for the first quarter ended March 31st, 2024, showing very strong growth across key performance measures.

Oliver Alawuba, GMD, UBA Group

The Group’s results, which were released to the Nigerian Exchange Limited (NGX) on Friday May 3rd, 2024, saw outstanding year-on-year increases: Gross Earnings rose by 110%, from N271.1billion to N570.2 billion; Interest Income grew by 130%, to N440.7 billion. Operating Income increased by 115%, from N175.7 billion in 2023, to N378.59 billion.

Further consolidating the record performance delivered in the Group’s 2023 Full Year Audited Financials, UBA again saw Profit Before Tax rising significantly by 155% from N61.7 billion in Q1 2023, to N156.34 billion in Q1 2024; while Profit After Tax jumped from N53.5 billion to N142.5 billion, representing an impressive rise of 165% year-on-year.

Commenting on the results, Oliver Alawuba, group managing director,  UBA, said the Group delivered strong first quarter performance, building on the solid momentum of 2023, as well as the ongoing execution of its long-held strategy of customer focus, geographic diversification and effective risk management and governance.

He said, “Our record Q1 profit before tax was delivered with triple digit gross earnings growth, supported by very strong interest and non-interest income. Fees and Commissions rose by 118% year-on-year on the back of improved efficiencies and continued digital adoption. This has helped drive improvement in efficiency and customer satisfaction, with the Group’s cost-to-income ratio held at 57.8%.”

“The Group’s balance sheet grew steadily with Total Assets increasing by 23% to N25.4 trillion. Customer deposits closed at N18.4 trillion, recording a 23% increase year-on-year, largely attributed to growth in current accounts and savings accounts.”

“Our unwavering commitment to sound governance, robust risk management, and financial strength positions us for continued growth, while we contribute meaningfully to inclusive economic development across our network.”

Also speaking on the performance, Ugo Nwaghodoh,  executive director, Finance and Risk, said the Group’s operating results for the quarter showed the actions taken to enhance the Group’s performance continued to deliver.

He said, “Our first quarter results highlight our relentless customer focus and the strength of UBA’s geographic and product diversification, with good performance across all our regions. We continue to differentiate ourselves across all key financial metrics, with a keen focus on high-quality risk adjusted revenues and cost discipline, while maintaining very sound asset quality.“

“We remain committed to reducing both interest expense and operating expenses and expect to make steady progress as we move through the year toward our stated profitability targets,” Nwaghodoh stated.

United Bank for Africa Plc is a leading Pan-African financial institution, offering banking services to more than twenty-five million customers , across over 1,000 business offices and customer touch points, in 20 African countries and across 4 continents.

With presence in the United States of America, the United Kingdom, France and the United Arab Emirates , UBA connects people and businesses across Africa through retail; commercial and corporate banking; innovative cross-border payments and remittances; trade finance and ancillary banking services.


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