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MPC Worries over Banks’ Bad Loans, Forex Exposure

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Central Bank of Nigeria (CBN)-led Monetary Policy Committee (MPC) has expressed worry over the concentration and high non-performing loans (NPLs) in banks.

 

The committee decried the persistent risks in the financial system, especially the high foreign exchange (Forex) exposure of banks, particularly to entities that do not earn forex.

 

Edward Lametek, CBN deputy governor, and a member of the MPC, disclosed this in a statement on the MPC meeting, posted on the CBN’s website.

 

He reiterated that the concentration and high NPLs were also of concern to the apex bank.

 

He however, said  payment of contractor debts by the Federal Government would go a long way in reducing the pressures in banking, and that improved surveillance and deployment of sanctions against regulatory infractions would engender good governance and stability.

 

“This is important because financial intermediation, especially provision of credit, is highly dependent on the state of health of financial institutions. At end-February 2019, the stock of deposit money banks’ total credit declined by about 2.5 per cent, year-on-year. This trend needs to be halted in the face of the prevailing sluggish performance of economic activity. In this context, the role of other financial institutions (OFIs) in the credit arena becomes important,” he said.

 

He explained that these institutions (micro-finance banks, finance companies, mortgage banks, development finance institutions, among others) are expected to play the very important role of closing certain gaps in the financial system, including crucially, financial inclusion.

 

such, they need to be encouraged to remain mission-focused.

 

“Overall, the balance of risks continues to be tilted against economic growth. In my January 2019 statement, I emphasised the need to support growth given the weak outlook for economic activity based on indications from the oil sector (especially the volatility in crude prices and production cuts) and sluggish consumption demand. Of course, I noted that more clarity over the next two months (February and March) would be helpful in deciding the direction of monetary policy beyond third quarter of 2019,” he said.

 

“Clearly, the indications then have been justified by subsequent developments particularly as shown by the CIEA, PMIs, and the outlook for the oil sector. My conviction about the merit of easing the policy stance around this time has been further strengthened by the increased opportunity for doing so. First, all the measures of inflation continued to trend downwards in February with an outlook for achieving single-digit core inflation by August. This means that the real challenge remains food inflation, which may be more effectively addressed through actions aimed at boosting production and easing distribution bottlenecks,” he said.

 

Lametek explained the CBN’s interventions in agriculture would continue to be relevant; domestic yields had declined with the one year treasury bills rate at about 13 per cent; the monetary policy stance needed to be in sync, especially as inflow of portfolio investments remained high.

 

He added that the relatively good level of external reserves and growing confidence in the economy offer some guarantee of adequate supply of forex to the market from both the CBN and autonomous sources.

 

He said a growth-supporting monetary policy orientation can only complement policies in other sectors of the economy to deliver broad based economic prosperity. The structural impediments to growth and job creation, particularly poor infrastructure, low (public) revenue effort and insecurity have to be dealt with and also maintaining a focus on the diversification of the economy.

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E-Financial

Oluloye, 67-Year-Old Woman Accused of Hacking, Stealing N16m from First Bank

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Wuraola Folashade Oluloye, a businesswoman, has been arrested for allegedly hacking a First Bank Plc account and stealing a customer’s N16.2million.

 

Oluloye, 67, was Tuesday brought before an Igbosere Magistrates’ Court, Lagos, by the Lion Building Police Division, Lagos on five counts of fraud and fraudulent diversion, according to a charge marked B/33/2019.

 

George Nwosu, prosecution counsel told the court that the defendant was arrested following a complaint by First Bank through Mr. Solomon Akhanolu, head of the Department of Forensic Auditors.

 

Nwosu told the court that the defendant committed the alleged offences between last October 16 and December 31, at First Bank’s Agidingbi Branch, Lagos.

 

The court heard that Oluloye allegedly hacked the account of Emefiele Ogbor, a First Bank customer with account No 3014419974.

 

She withdrew N16,200,000 and transferred same to her accounts in Stanbic IBTC, Union, Sterling and First banks.

 

The defendant subsequently withdrew the money from the four accounts and converted it to her use.

 

First Bank discovered the fraud during an audit and blocked the defendant’s bank account.

 

But when Oluloye showed up at the bank to make withdrawals, the police were waiting and she was arrested.

 

Folashade Olukoya granted Oluloye, chief magistrate who pleaded not guilty, N500,000 bail with two sureties in the like sum, among other conditions.

 

She remanded the defendant in Kirikiri Prison, Apapa Lagos and adjourned till June 24.

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Africa’s FinTech Sector Grows by 60% in 2 years says Disrupt Africa

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Africa’s FinTech sector is growing at a fast pace, with the number of start-ups operating in the space growing by more than 60% in the last two years, while funding has hit new records.

This is according to Disrupt Africa’s Finnovating for Africa 2019: Reimagining the African financial services landscape report, which finds the number of active FinTech ventures across the continent has grown to 491 from 301 in 2017.

According to the report, South Africa, Nigeria and Kenya remain the main three markets, with 141, 101 and 78 active ventures respectively, accounting for 65.2% of Africa’s FinTech start-ups.

“Yet the share of the overall total claimed by these three countries is in decline as the sector spreads across the continent, with FinTech start-ups tracked in 28 African nations. Though the big three markets are growing, the biggest developments are occurring in other markets, with countries like Uganda, Ghana and Egypt in particular seeing their local FinTech spaces explode,” according to Disrupt Africa.

A similar trend can be seen in terms of the type of platforms being rolled out by FinTech entrepreneurs, the company suggests.

Though start-ups in the payments and lending spaces remain the most prevalent, the fastest growth is occurring elsewhere, with the number of start-ups active in areas such as investtech and insurtech, for example, more than doubling in the last few years.

“Meanwhile, there is a marked increase in the amount of companies focusing on two or more distinct types of financial services, as African FinTechs begin to ‘rebundle’ and we see moves towards fully-fledged, all-service digital banks on the continent. This is a process that is quickening as the amount of funding coming into the sector grows. African FinTech companies have raised just shy of US$320-million in funding since January 2015, and last year’s total of US$132.8-million was the best year yet,” Disrupt Africa continues.

Gabriella Mulligan, co-founder of Disrupt Africa, said: “The financial services landscape in Africa is following a very unique trajectory, as compared to other geographies. Most remarkable about this trajectory, is that is it being driven by entrepreneurs and their home-grown innovations. We hope this report affords our readers an interesting insight into the FinTech revolution taking place across Africa.”

Tom Jackson, co-founder of Disrupt Africa, added, “No space has quite the potential impact of the FinTech space when it comes to impact – and profits – in Africa, with start-ups operating such platforms able to significantly address the major issue of financial exclusion on the continent and thus promote development in all sorts of other areas. It is exciting to see the speed at which the sector is developing, therefore, but also heartening to see the signs of maturation and consolidation that will ensure its ultimate success and longevity.”

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Ecobank Emerged ‘Best Retail Bank in Africa’ @ African Banker Awards

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Ecobank has been named Best Retail Bank in Africa 2019 at the prestigious African Banker Awards. The judges were especially impressed by how Ecobank’s state-of-the-art products, services, functionality and constant innovations provide 24/7 convenience, accessibility and affordability to meet the evolving needs and expectations of its customers across 33 African countries, whilst also successfully driving financial inclusion. Ecobank was also nominated for African Bank of the Year in the Awards. The Award ceremony was held last night in Malabo, Equatorial Guinea.

Ade Ayeyemi, Group CEO of Ecobank said: “We are honored to be recognized as Africa’s Best Retail Bank. This is testament to the success of our digital strategy and pan-African presence as we continue to drive financial integration, inclusive banking and playing a catalytic role in the transformation of Africa.”

“We are constantly innovating to meet the needs of Africans, from our multi-functional Ecobank Mobile App, which has changed banking in Africa, to our KYC-lite Xpress account opening for the unbanked and the under-banked, and our Rapidtransfer App, for cross-border remittances to Africa at minimal or no cost.

“Our Xpress Point agencies further deliver face-to-face banking to thousands in local communities. The traditional banking model is changing and Ecobank will continue to play a pivotal and pioneering role in meeting the banking needs of millions of Africans.”

Nana Araba Abban, Acting Group Executive, Consumer Bank said: “Ecobank is making banking accessible, convenient and affordable, and we are continuing to broaden our innovative range of best-in-class products, services and functionality to enrich our customers’ experience and stay a step ahead of their evolving needs and expectations. To win the prestigious ‘Best Retail Bank’ Award two years running strongly indicates that our strategy and service is working for ever increasing numbers of sub-Saharan Africans across our pan-African footprint.

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