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CBN

  • CBN, SEC grant approval in principle to Access, Diamond banks’ merger

    CBN, SEC grant approval in principle to Access, Diamond banks’ merger

    Access Bank and Diamond Bank Plc have obtained approval in principle from the Central Bank of Nigeria and the Securities and Exchange Commission on their proposed merger plans.

    Access Bank Executive Director, Personal Banking, Mr. Victor Etuokwu, said in Lagos that CBN and SEC had granted both banks approval in principle for the merger process.

    Etuokwu said that the banks were awaiting the final approval which would be granted after convening shareholders meeting.

    “So far, we have gotten approvals up to approval in principle. There are three approvals that we need for this process.

    “The first one is the pre-order approval which is like the first approval, the next approval is the approval in principle.

    “The final approval comes after approval in principle and it will come after you have convened your shareholders meetings,’’ Etuokwu said.

    He said that the banks would convene shareholders meetings in February, noting that the approval would be taken to court once approved by the shareholders.

    Etuokwu said all the processes including final approval would be completed in the next 60 days.

    He said that the new bank would remain committed to retail and corporate banking to drive financial inclusion for desired growth and development.

    “We need to invest in retail market to drive economic growth, this is what the new bank will do, a strong corporate and a strong retail bank,’’ he said.

    On staff retrenchment, Etuokwu said that members of staff would be retrained for different roles in case of overlapping.

    “Staff will be retrained for new roles where there are overlaps, one of the branches can be converted to an e-branch or Automated Teller Machine gallery,’’ he added.

    Mr Robert Giles, in charge of Retail, Diamond Bank said that integration of both banks had commenced for seamless service delivery.

    Giles said that ATMs of both banks could be used by customers at no cost, noting that they were committed at taking costs away from customers.

    Access Chief Executive Officer, Mr. Herbert Wigwe, at a joint news conference recently said it had already finalised terms and obtained regulatory approvals for a Tier II capital issuance to raise $250m available for draw down in January 2019.

    He said that the bank had also obtained “No Objection’’ from the CBN to undertake a Rights Issue to raise up to N75bn or $207m in the first half of 2019.

    Wigwe said that shareholder approvals and other regulatory approvals to that effect would be obtained before the offer opens.

    He noted that the fund raising exercise would accelerate the capital management plan to support retail growth previously set out in the bank’s five-year strategy.

    Wigwe said that the bigger entity was ready to absorb the staff of Diamond Bank at the completion of the deal by end of Jun, without any disengagement.

     

  • Nigeria’s e-payment transactions hit N56.85trn

    Nigeria’s e-payment transactions hit N56.85trn

    Report from the Nigerian Interbank Settlement System (NIBSS), have indicated that Nigeria’s electronic payment (e-payment) services, recorded transactions worth N56.85 trillion from January to September, 2018.

    The report showed an increase of N16.4 trillion when compared to the N40.45 trillion that was recorded in the corresponding period of 2017.

    The report showed that most of the electronic transactions were done through the NIBSS Instant Payment (NIP), Point of Sale (PoS), Automated Transfer Machines (ATMs), Mobile Money, Electronic Bills Payment (E-Bills) and Web payments.

    A breakdown of the report showed that ATMs transactions grew from N4.61 trillion in 2017 to N4.76 trillion at the end of the third quarter of 2018.

    Also, the volume of transactions on ATMs under the period in review grew from 560.86 million in 2017, to 650.06 million in 2018.

    The report showed a rise of about N635 billion in the use of POS machines to carry out payments by Nigerians.

    Under the review period, 98.73 million transactions worth N975 billion were carried out using POS in 2017, while in 2018, the volume grew to 196.83 million, valued at N1.61 trillion.

    Similarly, the volume of transactions carried out by Nigerians, using mobile money rose from N795.18 billion in 2017, to N1.22 trillion as at Sept, 2018.

    Also, using the web payment channel, the total value of transactions under the review period rose from N129.24 billion in 2017, to N183.07 billion in 2018.

    However, the value of such transactions on e-bill payments, which allowed customers to pay utility bills such as power, cable and so on online, declined from N420.73 billion in 2017 to N370 billion in 2018.

    Meanwhile, a Financial analyst, Dr Patricia Auta, has said that the NIBSS report showed an increased awareness and use of technology by individuals and businesses in the country.

    Auta urged the Central Bank of Nigeria (CBN), to intensify efforts on cashless economy, especially in states, to further grow the electronic payment space.

    She also advised banks to stay competitive and drive growth by providing innovative alternate payment channels to customers.

     

  • CBN orders banks to assign tracking numbers to customers’ complaints

    CBN orders banks to assign tracking numbers to customers’ complaints

    Deposit Money Banks (DMBs) and other financial institutions operating in the country have been ordered by the Central Bank of Nigeria (CBN) to from Wednesday, January 2, 2019 assign a tracking number to every complaint received from their customers.

    This directive was contained in a circular issued on Friday and signed by a director at the apex bank, Kofo Salam-Alada.

    Apart from the above, banks, after receiving customers’ complaints, are also expected to issue an acknowledgment to the customer, which must contain the assigned tracking number.

    In addition, the financial institutions must commence upload of complaints to the Consumer Complaints Management System (CCMS) on a daily basis.

    In the circular, the central bank said the banks should always “comply with the timelines stipulated in the CCMS for resolution of the various categories of complaints, warning that non-compliance will attract sanctions in line with the Banks and Other Financial Institutions Act (BOFIA), Cap B3, LFN 2004.”

    The CBN explained in the circular that this development was in “furtherance of its mandate to promote a stable financial system,” adding that the CCMS was created to ease “complaints management to engender public confidence in the financial system.”

  • $8.1bn dispute: CBN closes case with MTN, asks coy to pay $52.6m

    The Central Bank of Nigeria (CBN) has asked MTN Nigeria to pay $52.6m in settlement of the $8.1bn foreign exchange repatriation dispute.

    The African telecoms giant and the CBN, in separate statements issued on Monday, said that the agreement was reached after several intensive engagements in Lagos.

    MTN said the settlement was based on the realisation that certain Certificates of Capital Importation utilised in some private placement shares of about $1bn in 2008 were not properly issued as the company only got approval-in-principle from the CBN.

    “The CBN instructed MTN Nigeria to implement a notional reversal of the 2008 private placement of shares in MTN Nigeria at a net cost of circa N19.2bn – equivalent to $52.6m,” the telecoms company said.

    “MTN Nigeria and the CBN have agreed that they will resolve the matter on the basis that MTN Nigeria will pay the notional reversal amount without admission of liability.”

    The statement signed by the Director, Corporate Communications, CBN, Isaac Okorafor, read in part, “The parties have resolved that execution of the terms of the agreement will lead to amicable disposal of the pending legal suit between the parties and final resolution of the matter.

    “The CBN assures foreign investors that the integrity of the CCIs issued by authorised dealers remains sacrosanct. Potential investors are encouraged to take advantage of the enormous investment opportunities that abound within Nigeria.”

    The two parties said they would continue discussions in relation to the issues dealt with in the resolution agreement.

    The network provider explained that the regulator reviewed additional documents it presented and it was resolved that the telco was no longer required “to reverse the historical dividend payments made to MTN Nigeria shareholders.”

    As part of the agreement, MTN said, “The CBN will regularise all the CCIs issued on the investment by shareholders of MTN Nigeria of circa $402,625,419 without regard to any historical disputes relating to those CCIs, thereby bringing to a final resolution all incidental disputes arising from this matter.”

    Regarding the MTN/Accountant General of Federation dispute on back taxes, MTN informed its shareholders that the legal process it initiated, seeking the restraining of the AGF from taking further action, was ongoing.

    MTN Nigeria maintained its innocence on the $2.1bn tax allegation, saying no additional payment, as claimed by the AGF, was due.

    The AGF matter came up for initial mention before the Federal High Court of Nigeria Lagos Judicial Division on November 8, 2018, and has been adjourned to February 7, 2019.

    It added that the suit had been adjourned to February 7, 2019 in the Federal High Court, Ikoyi.

    The CBN in late August had alleged that MTN and four of its banks – Standard Chartered Plc, Citigroup Inc., Stanbic IBTC Plc and Diamond Bank Plc – illegally repatriated $8.1bn from Nigeria while the office of the Attorney General claimed the company failed to remit $2bn back taxes.

    The CBN also imposed a total fine of N5.87bn on the four banks for allegedly remitting dividends with irregular CCIs on behalf of MTN Nigeria between 2007 and 2015.

     

  • Coy calls on EFCC to release detained $2.8mn cash, employees

    The management of Bankers Warehouse has called on the Financial and Economic Crimes Commission (EFCC) to release the $2.8 million cash and its employees arrested at Enugu Airport on Thursday, Dec. 20.

    Bankers Warehouse is a company registered by the Central Bank of Nigeria (CBN) to carry out cash movement as well as currency processing.

    The company said in Lagos on Sunday that the cash were seized while its employees were arrested while carrying out legitimate business of cash movement for one of its banker clients.

    It said the employees were arrested, interrogated and detained at Enugu Airport by the EFCC while carrying out cash movement of its clients from its Onitsha branch to Lagos in spite of providing identification details.

    “The document provided also included a covering note from the bank authourising the team to move the consignment which is the standard practice.

    “We hereby state categorically that the movement of this currency was a legitimate business carried o on behalf of a legitimate financial institution.

    “We emphasise that our employees are in no way criminals carrying out any act of illegality as the EFCC has tried to portray.

    “These young men whose character and reputation have been deliberately soiled by the EFCC operatives were conducting their legitimate duties as requested bank customer of our company.

    “We request for swift and immediate release of our employees and our customer’s currency both detained without proper cause.

    “We also demand immediate retraction by the EFCC and and an apology issued to our company and our employees whose images have been maligned.”

    The company said that its client who had been unfairly exposed and accused of implied illegality and whose money was still improperly held by the EFCC operatives also deserved a special apology for the disclosure and damage to their image.

     

  • $8.1b dispute: Court adjourns MTN, CBN case till 2019

    A Nigerian judge adjourned on Wednesday a hearing over an $8.1 billion dispute between South African telecoms giant MTN and the central bank until Jan. 22.

    The dispute is over the transfer of $8.1 billion of funds which Nigeria’s central bank said the company had sent abroad in breach of foreign-exchange regulations. MTN has denied any wrongdoing.

    Nigeria is MTN’s biggest market, accounting for a third of the South African company’s annual core profit. The mobile phone network serves 56 million people in Nigeria.

    The adjournment came at the request of the central bank and MTN lawyers.

    “We are still making moves towards an out of court settlement,” a central bank lawyer told the court.

    An MTN lawyer said discussions were ongoing.

    Nigeria is MTN’s biggest market, accounting for a third of the South African company’s annual core profit. The mobile phone network serves 56 million people in Nigeria.

     

  • Forex: CBN adds fertilizer to banned items, vows to clamp down on violators

    The Central Bank of Nigeria (CBN) has announced plans to sanction some corporate and entities said to be engaging in the dumping of the 41 items restricted from being imported into the country with foreign exchange sourced from the Nigerian Foreign Exchange Market.

    Recall that the CBN as part of its developmental objective of employment generation and inclusive growth in Nigeria on July 1, 2015 restricted the availability of forex to the importation of 41 items which could be competitively produced within the economy.

    However, the CBN in a circular signed by Kevin Amugo, Director, Financial Policy and Regulation Department on Monday said the the apex bank had discovered that there were circumvention of the policy as the restricted items were being dumped in the country.

    It said the implications were that the growth and employment benefits arising from the policy may be eroded if not checked.

    “The CBN views this development with trepidation. The Economic Intelligence Unit of the bank in collaboration with the EFCC would commence immediate investigation of the accounts of the corporate and entities engaged in this unwholesome act with a view to visiting severe sanctions on all the culprits,” the circular said.

    “Such sanctions would among others include blacklisting the corporates and their directors; closure of their bank accounts; and restricting them from maintaining any bank accounts in any bank under the CBN remit. Banks that provided their platforms for such economic abuses would also be appropriately sanctioned.”

    Meanwhile, in another circular, the CBN confirmed the inclusion of fertilizer on the list of ban items effective Dec 7, 2018.

    The circular signed by Ahmed Umar, Director, Trade and Exchange Department said, CBN will ensure that transaction (Form M) on fertilizer for which payment are outstanding are settled at the appropriate settlement dates

    CBN said the policy had resulted in massive investments and the establishment of cottage industries that now engage in the production of the items across the country.

    “The growth and employment benefits have been phenomenal,” the bank said.

    THE 42 ITEMS RESTRICTED FROM IMPORTATION WITH FOREX

    Rice

    Cement

    Margarine

    Palm kernel/Palm oil products/vegetables oils

    Meat and processed meat products

    Vegetables and processed vegetable products

    Poultry chicken, eggs, turkey

    Private airplanes/jets

    Indian incense

    Tinned fish in sauce(Geisha)/sardines

    Cold rolled steel sheets

    Galvanized steel sheets

    Roofing sheets

    Wheelbarrows

    Head pans

    Metal boxes and containers

    Enamelware

    Steel drums

    Steel pipes

    Wire rods(deformed and not deformed)

    Iron rods and reinforcing bard

    Wire mesh

    Steel nails

    Security and razor wine

    Wood particle boards and panels

    Wood Fibre Boards and Panels

    Plywood boards and panels

    Wooden doors

    Toothpicks

    Glass and Glassware

    Kitchen utensils

    Tableware

    Tiles-vitrified and ceramic

    Textiles

    Woven fabrics

    Clothes

    Plastic and rubber products, polypropylene granules , cellophane wrappers

    Soap and cosmetics

    Tomatoes/tomato pastes

    Eurobond/foreign currency bond/ share purchases

    Fertilizer

     

  • Diamond Bank woes worsen as customers lament non-payments

    Customers of Diamond Bank Nigeria using the bank’s mobile app eSUSU feature for group and personal savings have lamented non-payments, indicative of a probable financial crisis at the bank.

    TheNewsGuru (TNG) reports this is following downgrade of Diamond Bank, reflecting uncertainty over its solvency and liquidity in view of very weak asset quality, highly vulnerable capital position as well as tight foreign currency (FC) liquidity ahead of an upcoming maturing USD200 million Eurobond in May 2019.

    Customers who spoke with TNG at the weekend expressed fears of losing their hard-earned money following recent developments, especially rumours of acquisition, at the bank.

    The customers said they had used the bank’s mobile app thrift saving feature consistently without issues since they were aware of it, but are worried after the bank refused to pay recently.

    When contacted, officials at the bank told TNG that deactivation/liquidation process usually takes within 24 to 48 working hours to be completed.

    However, one of the customers told TNG of having two personal saving plans on the eSUSU platform, and that, five days after end of the plans that Diamond Bank was supposed to make payments available, the bank was yet to pay.

    When asked if the bank is in a process to discontinue the eSUSU feature, Diamond Bank said, “We can also confirm that the eSUSU services are very well available”.

    The bank, however, pleaded with customers to be patient.

    The fears of the customers who spoke with TNG were heightened by especially rumours that Access Bank was in talks to acquire Diamond Bank and the recent downgrade of the bank.

    In November, Access Bank was said to making negotiations to add Diamond Bank’s portfolio to its assets in 2019. Talks on the acquisition were on, according to sources, who said the fusion is set for the first quarter of next year.

    However, Diamond Bank immediately dispelled the rumours, urging the banking public, particularly its customers, to avoid panic withdrawals while assuring them of the safety of their funds.

    Also, only recently, Diamond Bank got approval of the Central Bank of Nigeria (CBN) to operate as a national bank only with immediate effect, resulting in the bank ceasing from operating as an international bank.

    The move followed the bank’s decision to sell its international operations, which included the disposal of its West African Subsidiary in 2017, and Diamond Bank UK, the sale of which is currently in its final stages.

    According to the bank, the re-licensing supports its objective of streamlining its operations to focus resources on the significant opportunities in the Nigerian retail banking market, and economy as a whole.

    “The move to a national banking license marks a continuation of our strategy to focus on Nigeria’s significant fundamental trends, including a large underbanked population and Africa’s biggest economy.

    “By focusing and optimizing our resources towards Nigeria and the priority area of retail banking, we will be better positioned for longer term growth and greater profitability.

    “The reduction in minimum capital requirement also increases our capacity to expand the quantum of business and product services we can offer consumers, as well as representing a key step in strengthening our financial position,” Uzoma Dozie, Diamond Bank CEO said.

    The change to national bank status enables Diamond Bank to maintain a lower minimum capital liquidity requirement of 10% as against 15% required for international banks.

    The share price of Diamond Bank moved up by +56.92% in one week.

    However, it has lost -15.7% in one month, -37.04% in six months, -32.89% in one year and -32% year to date.

    In the week rounding off November, Diamond Bank was among the top 10 decliners on the Nigerian stock market, shedding 31.58% in shares in a week-trading.

    In November alone, it lost 54% and was the worst performer in Nigeria’s all-share index.

    The bank reported a loss after tax of N9.01 billion in its 2017 full-year financial results as against a profit after tax of 3.49 billion in the preceding year.

    Recently, its chairman and three non-executive directors resigned from their positions in the move to recapitalize.

     

  • $8.1bn demand: MTN opts for out-of-court settlement with CBN

    Telecommunications firm, MTN Nigeria Communications Limited, on Tuesday, asked the Federal High Court in Lagos to further adjourn the hearing in the suit it filed to challenge the $8,134,312,397.63 being demanded from it by the Central Bank of Nigeria.

    The $1.8bn demand by the CBN followed alleged forex remittances infraction by MTN.

    On Tuesday, MTN’s lead counsel, Chief Wole Olanipekun (SAN), told the court that his client had approached the CBN for possible amicable resolution of the dispute.

    He urged Justice Saliu Saidu to further adjourn the suit to enable parties to fully explore out-of-court resolution and deliberate on the terms of the settlement.

    The position was confirmed by CBN’s lead counsel, Mr Seyi Sowemimo (SAN), who added that the discussions for possible out-of-court settlement were in the advanced stage.

    Consequently, Justice Saidu adjourned till December 12, 2018, for a report of the settlement between the parties.

    MTN filed the suit, marked FHC/L/CS/1475/2018, in November, urged the court to the declaration that the CBN acted ultra vires its statutory powers when it wrote an August 28, 2018 letter to it demanding a refund of $8.1bn.

    The firm urged the court to hold that the CBN’s $8.1bn demand was “illegal, oppressive, abusive, unauthorised and unconstitutional.”

    The telecommunications giant urged the court to declare that that “the 1st defendant’s decision in its letter of August 28, 2018 with Ref No GBD/GOV/COM/DGF/118/121 addressed to the plaintiff and titled, ‘Investigation into the remittance of foreign exchange on the basis of the illegal capital importation certificates issued to MTN Nigeria Communications Limited’ were reached in breach of the plaintiff’s right to fair hearing.”

    It also urged the court to void a September 3, 2018 letter written to it by the 2nd defendant, the Attorney General of the Federation, demanding $8.1bn as “penalties for the offence of ‘infraction of forex remittances’.”

    MTN sought a court order “restraining the 1st and 2nd defendants from giving effect to the decisions, demands, and directives in their letters of August 28, 2018, and September 3, 2018, respectively.”

    However, the CBN, in its statement of defence and counter-claim, urged the court to dismiss MTN’s suit, insisting that the telecommunications giant must refund $8.1bn to the Federal Government.

    The dispute over $8.1bn repatriated funds started when the CBN alleged that MTN used improperly issued certificates to transfer funds out of Nigeria after the telecom giant converted shareholder loans in its Nigerian unit to preference shares in 2007, but MTN denied the allegations.

    The apex bank said MTN’s banks failed to verify that the telecom group had met all the country’s foreign exchange regulations.

  • $8.1 bn repatriation: Court fixes date for report of settlement in MTN vs CBN case

    $8.1 bn repatriation: Court fixes date for report of settlement in MTN vs CBN case

    A Federal High Court in Lagos on Tuesday, adjourned until Dec. 12, for report of settlement in a dispute between MTN Nigeria Communications Ltd, and the Central Bank of Nigeria (CBN), over alleged illegal repatriation of 8.1 billion dollars by the telecoms company.

    Justice Saliu Saidu fixed the date for report, after parties informed the court that they were engaged in settlement talks.

    When the case was called on Tuesday, Chief Wole Olanipekun (SAN) announced his appearance alongside four other senior lawyers, for MTN.

    On the other hand, Mr Seyi Sowemimo (SAN) announced his appearance for CBN, while Mr T.D Agbe, Senior State Counsel from the Federal Ministry of Justice, appeared for the Attorney General of the Federation (AGF).

    Olanipekun said: “May it please your lordship, the matter today, is slated for hearing of pending applications, but we owe the court a duty to inform it that parties are engaged.

    “Counsel have conferred, and in view of this, we are asking for a short date for report,”

    On his part CBN counsel said: “We have advanced stages towards settlement, and it remains to cross the Ts and dot the Is; it is just for report of settlement,”

    Following this development and based on agreement of parties, the court consequently adjourned the case until Dec. 12 for a report of settlement.

    MTN had filed the suit, seeking an injunction to restrain the CBN and AGF from taking further actions to reclaim the alleged debts.

    The firm wants the court to hold that the CBN lacks power to determine its civil obligations or penal liabilities.

    It is urging the court to declare that the CBN acted outside its statutory powers when it wrote a letter to it on Aug.18, demanding a refund of 8.1 billion dollars.

    It wants the court to hold that the demand was illegal, oppressive, abusive, unauthorised and unconstitutional.

    On its part, CBN alleged that the telecoms firm improperly repatriated dividends, and requested that MTN should return 8.1 billion dollars to its coffers.

    Meanwhile, MTN had filed a sister case before another judge of same court, Justice Chukwujekwu Aneke, against the AGF, challenging a withholding tax assessment of 1.3 billion dollars and an import duty tax of N242 billion.

    MTN queries these assessments.

    Justice Aneke has fixed Feb. 7, 2019 for hearing of all pending applications in this suit.