Mr Bello Hassan, managing director/CEO, Nigeria Deposit Insurance Corporation (NDIC), has said that the use of Bank Verification Numbers (BVN) facilitated the successful reimbursement of 84.98 per cent of depositors from the defunct Heritage Bank.

Hassan made this announcement during the 21st edition of the NDIC Workshop for Business Editors and the Finance Correspondents Association of Nigeria (FICAN), held in Lagos.

The workshop, themed “Strengthening Nigeria’s Financial Safety-Net – The Role of Deposit Insurance,” was described as timely and pertinent, considering the rapidly changing dynamics of the global financial system and its impact on Nigeria.

He emphasized that the recent revocation of Heritage Bank’s license by the Central Bank of Nigeria (CBN) on June 3, 2024, serves as a clear demonstration of the NDIC’s critical role in protecting depositors and maintaining financial stability in the banking sector.

According to him, acting under the relevant provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020 and the NDIC Act 2023, the NDIC was appointed liquidator to manage the orderly resolution of the bank and oversee the payment of its depositors and other claimants.

He said in the discharge of this critical role of depositor reimbursement, the Corporation began the payment of the insured deposits of N5m maximum per depositor within a record time of four days of the bank’s closure.

This was achieved using Bank Verification Numbers (BVN) as a unique identifier to locate depositors’ alternate accounts in other banks without the need to fill out forms or visit the NDIC offices.

“This innovative approach has indeed, enabled the payment of 84.98% of depositors with BVN-linked accounts to date.

“The prompt payment of depositors, coming at a time when the Corporation had also recently increased the deposit insurance coverage from N500,000 to N5m in Deposit Money Banks, significantly cushioned the negative impact of bank failure, especially during the current challenging economic climate.

This achievement is consistent with the provisions of the International Association of Deposit Insurers (IADI) Core Principle 15, which emphasises timely payouts to depositors of failed banks,” he said.

Hassan said that having largely reimbursed depositors their insured deposits, the Corporation is committed to ensuring that depositors with balances exceeding N5m are also paid the balance of their deposits.

He stated that the uninsured deposits represent a significant portion of the total deposits in Heritage Bank.

According to him, in this regard, the Corporation is already working assiduously to ensure that, all depositors with amounts above the maximum insured amount of N5m are paid through liquidation dividends from the realisation of the defunct bank’s assets and recovery of debts.

“The Corporation has already initiated the process of debt recovery and realisation of investments and physical assets of the defunct bank to ensure timely payment of the uninsured deposits of the defunct bank.

“Additionally, the NDIC’s responsibilities extend to the creditors of the defunct bank, who will receive payments after all depositors have been fully reimbursed.

“This orderly process, based on asset realisation and priority of claims, is essential in maintaining public trust in the banking system and promoting financial stability.

“The handling of the Heritage Bank liquidation illustrates the broader role of the NDIC in ensuring that even in times of financial disruption, depositors can be rest assured that their funds are protected,” he said.

Hassan assured that as the Nigerian financial system continues to evolve and face new challenges, the NDIC remains steadfast in its mission to protect depositors and collaborate with the Central Bank of Nigeria (CBN) in ensuring the stability of the banking sector, which is critical to the growth and development of the economy.

He noted that confidence is key in the maintenance of financial system stability and the role of deposit insurance cannot be overemphasized.

“As one of the safety nets, it reassures depositors, thereby instilling trust in the banking system and preventing bank runs during times of uncertainty.

“ Over the years, the NDIC has been instrumental in promoting stability by ensuring that when banks fail, depositors are protected, and their funds are reimbursed promptly,” he said.

E-payment transactions in the country jumped by 86.44 per cent to N566.39tn in the first half of 2024 from N303.60tn in the same period of last year, according to data from the Nigeria Inter-Bank Settlement System.

The data showed July saw the highest transaction value, totalling N89.50tn, compared to N47.39tn in July 2023. In June this year, the value of e-payment transactions stood at N79.59tn, up from N45.31tn in June 2023.

The NIP, launched in 2011 by NIBSS, is an online real-time interbank payment platform that enables instant value transfers.

Banks have since made the NIP platform accessible to customers through various channels, such as internet banking, mobile apps, USSD, ATMs, POS, and bank branches.

Similarly, May saw a total of N87.48tn e-payment transactions, compared to N45.96tn in May of the previous year.

April 2024 recorded N75.32tn in e-payment transactions, rising from N41.25tn in April 2023, while March 2024 posted N83.05tn compared to N48.33tn in March 2023.

In February, transactions reached N79.33tn, up from N36.79tn in February 2023, and January 2024 saw N72.11tn compared to N38.77tn in January 2023.

The surge in e-payment transactions was linked to the increasing adoption of digital payment platforms by businesses and individuals, driven by convenience and efficiency in financial transactions.

Last year, electronic payment transactions in the country hit an all-time high, rising by 55 per cent to N600tn, compared to N387tn in 2022.

Also, the total value of point-of-sale transactions for 2023 was N10.73tn compared to N8.39tn recorded in 2022.

Africa Finance Corporation (AFC), the continent’s leading infrastructure solutions provider, today announced that it has received an uplift to its credit ratings outlook from Moody’s Investors Service, with the assignment of a “stable” outlook.

This decision further solidifies AFC’s position as one of the highest investment-grade African institutions, with Moody’s affirming the Corporation’s long-term issuer and senior unsecured ratings at A3, as well as AFC’s short-term issuer rating at P-2.

“Notwithstanding increased country risk in several of AFC’s countries of operation over the past year, asset performance has proven resilient amid effective credit protections,” Moody’s analysts stated in its latest report.

“The stable outlook also reflects management’s governance track record and early intervention capacity to mitigate materializing risks at an early stage.”

Moody’s A3 rating affirmation reflects AFC’s adherence to its prudential guidelines to safeguard the Corporation’s intrinsic financial strength based on solid capital adequacy and high-quality liquidity buffers.

In FY2023, the Corporation recorded outstanding financial performance with Capital Adequacy Ratio increased to 34.5% from 34.3% in 2022 and Cost-to-Income Ratio improved to 19.6%, from 22.7% in 2022.

Additionally, the Corporation recorded Liquidity Coverage Ratios (LCR) of 161% and 143% under normal circumstances and a stress scenario respectively, significantly higher than the Corporation’s LCR requirement of greater than 100% in both scenarios.

The decision by Moody’s is crucial for AFC to continue leveraging its top-tier credit ratings to achieve among the lowest borrowing costs of any institution in Africa, for transformational infrastructure projects in power, natural resources, transport, and technology that drive rapid industrialisation and job creation on the continent.

Landmark initiatives include Djibouti’s first wind farm, with AFC as lead developer advancing plans to become the first African country wholly reliant on renewable sources for energy, and the Lobito Corridor rail project, with AFC again as lead developer working alongside the US, European Union and governments of Angola, DRC and Zambia to mobilise industry and connect the Atlantic and Indian oceans.

“Amidst the current challenging global macroeconomic and financial conditions, we are pleased to receive such strong endorsement from Moody’s, a key lever in our access to global capital markets,” Samaila Zubairu, President and CEO of AFC, said “It reinforces our position as the resilient and reliable partner for a more prosperous African future and an indispensable ally in mobilising urgently needed capital to build the infrastructure that integrates Africa and enables its industrialisation.”

“The change in outlook to stable from negative is driven by our expectation that AFC will be able to maintain astable, if not improving leverage ratio and that the asset performance track record will be preserved.” Moody’s analysts said, commending AFC. “The improved leverage outlook reflects the Corporation’s continued equity raising strategy.

The Corporation exceeded its $1 billion target in 2019-23 and aims to raise a similar amount during 2024-28. Moreover, the corporation lowered its dividend payout ratio starting 2023 which will help retain a higher share of earnings and grow the capital base organically in the future,” they reported.

In the face of uncertainty in the global financial landscape, AFC successfully maintains access to the global capital markets, a testament to the confidence that investors place in the Corporation’s robust credit risk profile and it’s growing global appeal.

This year, AFC has completed several pivotal funding transactions including its largest ever debt facility, a US$1.16 billion syndicated loan, attracting new lenders from the Middle East, Europe, and Asia.