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  • CBN, NCC wade into Etisalat debt crisis, to meet today

    CBN, NCC wade into Etisalat debt crisis, to meet today

    Following a take over of Etisalat Nigeria by a consortium of banks over its indebtedness, the Central Bank of Nigeria (CBN) and Nigerian Communications Commission (NCC) will on Wednesday (today) meet the management of Etisalat and the banks.

    The essence of the meeting is to find a resolution to the debt crisis troubling the telecoms company.

    Reuters quoted an official of Etisalat Nigeria as saying that discussions with the group of Nigerian commercial lenders are ongoing to find a “non-disruptive” solution to the debt.

    The source further said that several meetings were ongoing at the NCC and the CBN after talks between about 10 Nigerian banks and Etisalat Nigeria broke down.

    He also confirmed that part of the $1.2billion bank credit obtained by Etisalat Nigeria has been paid back since 2013 when the loans were first structured.

    The parties are also expected to issue a joint statement after the meeting later today.

    TheNewsGuru.com reports that on Tuesday, the Etisalat Group, the parent company of Etisalat Nigeria, informed the Abu Dhabi Securities Exchange that a group of Nigerian commercial banks refused to agree to the restructuring of the debt (which amounts to 541 billion naira) owed by the company.

  • Consortium of banks takes over Etisalat Nigeria

    After talks of Etisalat Nigeria debt restructuring plan reached stalemate, a consortium of banks will effective June 23 take over the business of Etisalat Nigeria.

    The parent company of Etisalat Nigeria, Etisalat Group, announced the takeover on Tuesday in a filing to the Abu Dhabi Securities Exchange in Abu Dhabi, United Arab Emirate.

    The filing, with reference number Ho/GCFO/152/85, and dated June 20, 2017 signed by Etisalat Group Chief Financial Officber, Serkan Okandan, said efforts by EMTS to restructure the repayment of the syndicated loan by a consortium of banks to Etisalat Nigeria collapsed.

    “Further to our announcement dated 12 February, 2017, Emirates Telecommunications Group Company PJSC, “Etisalat Group” would like to inform you that Emerging Markets Telecommunications Services Limited “EMTS” (“the company), established in Nigeria and an associate of Etisalat Group with effective ownership of 45% and 25% ordinary and preference shares respectively, defaulted on a facility agreement with a syndicate of Nigerian banks (“EMTS Lenders”).

    “Subsequently, discussions between EMTS and the EMTS Lenders did not produce an agreement on a debt restructuring plan.

    “Accordingly, the Company received a default and security Enforcement Notice on 9 June 2017 requesting EMTS Holding BV (EMTS BV) established in the Netherlands, and through which Etisalat Group holds its interest in the company) requiring EMTS BV to transfer 100% of its shares in the company to the United Capital Trustees Limited (the Security Trustee”) of the EMTS Lenders by 15 June 2017.

    “Subsequently the EMTS Lenders extended the deadline for the share transfer to 5.00 pm Lagos time on 23 June 2017,” the filing said.

    Etisalat has been under pressure since 2016, following the demand notice for the recovery of a $1.72 billion (about N541.8 billion) loan facility it obtained from the consortium of banks, led by Access Bank PLC and other Nigerian and foreign banks, in 2015.

    The loan, which involved a foreign-backed guaranty bond, was for the mobile telephone operator to finance a major network rehabilitation and expansion of its operational base in Nigeria.

    Unable to meet its debt servicing obligations agreed since 2016, the consortium, prodded by their foreign partners, threatened to take over the company and its assets across the country.

    But the intervention of the telecom sector regulator, Nigerian Communications Commission, NCC, and its financial sector counterpart, the Central Bank of Nigeria, CBN, persuaded the banks to rethink their threat and give Etisalat a chance to renegotiate the loan’s repayment schedule.

    However, EMTS Holding BV, established in the Netherlands, has up to June 23 to complete the transfer of 100 percent of the company’s shares in Etisalat to the United Capital Trustees Limited, the legal representative of the consortium of banks.

     

     

     

    Source: Premium Times

     

  • Scarcity: CBN injects $195m into forex market

    Scarcity: CBN injects $195m into forex market

    …as Naira exchanges for N364/$1

    Following its 800 million dollars intervention in the inter-bank Foreign Exchange (FOREX) Market last week, the Central Bank of Nigeria (CBN), on Monday, injected 195 million dollars into the market to meet the requests of customers in the various segments of the market.

    The acting Director, Corporate Communications, Mr Isaac Okorafor , said in a statement in Abuja that the bank would soon introduce a new FOREX retail option.

    Giving a breakdown of funds injected on Monday, he said the apex bank offered 100 million dollars to authourised dealers through interbank wholesale window, while it allocated 50 million dollars to Small and Medium Enterprises (SMEs) window.

    Okorafor said the Invisibles segment was allocated 45 million dollars to meet the needs of those who applied for FOREX to settle Business/Personal Travel Allowances, school tuition and medicals.

    The CBN spokesperson said the bank would continue to ensure adherence to its forex policy by insisting on transparency by stakeholders to guarantee stability in the market.

    The CBN made two major interventions in the inter-bank Forex market last week, totaling 831.5 million dollars.

    Since February 2017, the bank had boosted transactions at the Investors’ and Exporters’ segment of the market to the tune of 2.2 billion dollars.

    Also last week, the CBN, in a bid to tackle inflation, unveiled plan to mop up N200.32 billion from the Nigerian banking system through special Open Market Operation (OMO) at the rate of 16 per cent per annum.

    Meanwhile, the Naira had continued to maintain its stability in the FOREX market, exchanging at an average of N364 to a dollar at the parallel segment of the market on Monday.

     

     

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  • CBN to sell N1.24tr Treasury Bills by September

    CBN to sell N1.24tr Treasury Bills by September

    The Central Bank of Nigeria (CBN) plans to sell N1.24 trillion ($4.1 billion) worth of treasury bills (T-bills) from June 15 to August 31, the regulator’s debt calendar for the third quarter has shown.

    The bank aims to auction N226.64 billion in 91-day bills, N311.32 billion in 182-day and N698.64 billion in 364-day debt.

    TheNewsGuru.com reports that the apex bank sells treasury bills twice a month to help fund the government’s budget deficit and support commercial banks in managing liquidity.

    Nigeria, grappling with its first recession in 25 years after a slide in global oil prices and due to the impact of attacks on energy facilities in the Niger Delta, has set out a budget plan worth N7.44 trillion for this year.

    Nigeria expects to face a budget deficit of about N2.21 trillion for the year as it tries to wriggle its way out of recession. It expects to raise money to cover more than half the deficit through domestic borrowing.

    The bills’ maturities range between three months and a year and would be raised on Monday, according to the CBN. They are marketable short-term money market securities that serve the purpose of raising money for the government and also help in monetary policy management of the CBN.

    The CBN on August 3 last year, raised N245.18 billion ($773.44 million) worth of T-bills to settle short-term obligations. It also issued N45.18 billion in three-month debt, N80 billion of six-month paper and N120 billion of one year bills in a Dutch auction, Treasury Bills traders said.

    Indicative rates for the auction are 16 per cent for three-months, 18 per cent for six-months and 18.5 per cent for one-year bills. The auction’s results will be published a day after the sale.

    The main investors in government securities are mainly pension funds and commercial banks, which control more than 60 per cent of the market, followed by insurance funds and a few micro-finance institutions.

    Yields on fixed income securities have been rising in recent months with the CBN mopping up naira liquidity to try to lure back foreign investors, who sold naira assets following the plunge in the price of oil, Nigeria’s economic mainstay.

     

  • Forex: CBN introduces new rules to end scarcity

    Forex: CBN introduces new rules to end scarcity

    …as Naira exchanges for N372/$1 at parrallel market

    The Central Bank of Nigeria on Monday introduced new rules into the interbank foreign exchange market.

    This development is coming as the Naira to dollar rate climbed to 372 at the parallel market and 305.55 at the interbank market on Monday.

    The rules were contained in a new circular tagged, “Further liberalisation of the interbank foreign exchange market,’’ and signed by the Director, Financial Markets, Dr. Alvan Ikoku.

    Among other things, the regulator said authorised dealers in the interbank were meant to put only N1 spread on their transactions.

    The statement reads, “All authorised dealers shall be subject to a maximum spread of N1. Funds purchased by an authorised dealer from another dealer on the interbank market shall not be held in position overnight by the buying authorised dealer or sold to another authorised dealer.”

    “Such interbank purchases shall only be sold by the buying authorised dealer to its customers for permitted/eligible transactions as outlined in the above-referenced circular.

    It added, “Authorised dealers shall not exceed their respective foreign currency trading position without approval of the CBN. Compliance with the FCTPL shall strictly be monitored by the CBN.”

    “All interbank trades –spot, forwards, futures, option and swaps –that have an impact on an authorised dealer’s FCTPL are expected to comply with the rate reasonability standards.”

    In addition, the CBN stated that it reserved the right to intervene, as a buyer or seller, as it deemed it fit in the interbank market.

    It advised the dealers to encourage their corporate clients to on-board the FMDQ-advised forex trading system immediately, in order to avoid sanctions and to deepen the market.

  • CBN injects $190m into FOREX market, opens up market

    CBN injects $190m into FOREX market, opens up market

    Relentless to achieve convergence of rates between the interbank and Bureau de Change segments of the foreign exchange market (FOREX), the Central Bank of Nigeria (CBN) has injected another 190 million dollars into the market.

    The acting Director, Corporate Communications, CBN, Mr Isaac Okorafor, in a statement on Monday in Abuja, said 100 million dollars was offered as wholesale interventions and 50 million dollars was allocated to the Small and Medium Enterprises (SMEs) FOREX window.

    He said that 40 million dollars was also allocated to accommodate customers requiring FOREX for business, Personal Travel Allowances, tuition and medical fees.

    Okorafor said the Naira had made tremendous gain against the dollar in recent times.

    He said FOREX rates at both the inter-bank and BDC segments had almost converged, prompting even greater optimism that the value of the Naira would continue to spike.

    Okorafor observed that by ensuring transparency in the market as well as fairness to end-users, the CBN had further exposed speculators and checkmated them.

    He, therefore, urged all dealers, particularly licensed BDCs, to continue to play by the rule, adding that the CBN would not hesitate to wield the big stick against any erring bank or dealer.

    Okorafor said that the CBN had also released new guidelines to further develop the foreign exchange market and improve its structure.

    “The new circular, among other provisions, allows authorised dealers to sell their excess foreign currency to other authorised dealers without seeking prior approval from the CBN,” he said.

    Meanwhile the Naira continues to maintain its strong stand against major currencies around the globe, exchanging for N364 for one dollar in the BDC segment of the market on Monday.

     

  • Senate to invite CBN, DMBs over forex crisis, high interest rates

    …Says Presidency will sign 2017 Appropriation Bill soon

    Senate President, Dr. Bukola Saraki has said the Senate as part of its legislative function will intervene in the high interest rates on loans and forex crisis that has lingered for a while now by inviting the apex bank, Central Bank of Nigeria, CBN and Deposit Money Banks, DMBs, to technically proffer long lasting solutions.

    He stated that in an economy where workers were being retrenched and people were losing investments, it was immoral for certain sectors to be making astronomical profits.

    Saraki stated this in an interactive session with newsmen in Ilorin, Kwara State on Sunday. In his words: “They (banks) will tell you that they are doing business but in doing business, there must be social responsibility. We must be able to sit down and look at ourselves eyeball to eyeball, and we intend to do that; and I can promise Nigerians that we can find a solution. Hopefully with the stability in the forex market, we will now begin to address the high interest rate.

    “There is no business that can make money if it is trying to borrow at 28 or 29 per cent. It cannot work and if we cannot get the banks to lend to the real sector and they carry on their money to government instruments, there cannot be growth. So, we must tackle that. I can assure you that I will lead that challenge. We must sit down and discuss it.”

    Saraki added, “They are in business to make money but we must look at what money is reasonable in this kind of environment. You may have to reduce that profitability to allow your country to grow. It is that balancing that we need, but in doing that, there must be some incentives. We may have to tell them, ‘Listen, we may have to limit how much you put in government security’.

    “What do you do with that extra amount of money? It must go to the real sector. It must go to the business that produce made-in-Nigeria products. They may say that it is too risky to do that. In doing that, we must give them some assistance. This is the kind of negotiation we must make.”

    He said the Senate would discuss with the Central Bank of Nigeria and the banks on how to address the high interest rate regime.

    The Senate President urged Nigerians to patronise homemade products, adding that people should report any Ministry, Department and Agency that flouted the Senate’s directive that indigenous companies producing such commodities should be given the option of first refusal during public procurement.

    On the delay in the signing of the 2017 budget into law, Saraki told Nigerians not to be apprehensive about whether the Presidency would assent to the budget or not.

    He said, “There was a comment I read online where the Presidency had said it did not have an intention not to sign. I do not think that (not signing the budget) will happen; I doubt very much.

    “Nigerians should not be concerned about that; I am pretty sure that the Executive will sign the bill and we will begin to implement the budget. I am confident that the Executive will sign it very soon. There should be no anxiety there.”

  • Senate to meet with CBN over high interest rate

    Senate President Bukola Saraki has promised that the Senate will look into the high interest rate charged by banks in the country.

    “It is likely that we will debate it this week,” Saraki said during an interactive session with journalists on Sunday in Ilorin.

    According to him, the high interest rate is not good for the economy as the nation eases out of recession and targets growth.

    “This week we will debate it, have a round table discussion with the Central Bank of Nigeria and other commercial banks and talk frankly to ourselves,” he said.

    According to Saraki, it is not fair for the banking sector to be making astronomical profit while companies lose money and retrench workers.

    “Hopefully, with the stability of the foreign exchange, we can now begin to address the issue of interest rate.

    “There is no business that can make money if you are borrowing at 28 percent, it cannot work,” Saraki added.

    He said the Senate would engage financial institutions to arrive at an affordable interest rate, adding, “if they refuse, the Senate may come up with legislation to peg the interest rate.”

    According to him, the banks are charging high interest rate because they have tied their assets in government securities and are getting 18 to 19 percent.

    “They will tell you they are doing business, but in any business, there must be social responsibility.

    “I promise Nigerians that we will find a solution to the high interest rate,” Saraki assured.

    The Senate president also said the upper chamber may limit the amount banks can put in government securities and channel the rest to areas like the real sector.

    Saraki also expressed concern over the status of local governments in the country, saying virtually all local councils lacked the required finances to carry out their statutory obligations.

    He said that to reduce the burden of responsibilities on local councils, the Senate may transfer the responsibility of funding primary education to states.

    “I am of the view that we should look at how state governments take over primary education.

    “This is an arm of government that cannot meet its constitutional obligations and you now put a very important one under it.

    “Ninety Five percent of local governments depend on state governments’ support to pay workers salaries,” Saraki added.

    He noted that the Constitution Review Committee of the Senate may grant autonomy to the local government in the country.

    The Senate president, however, believed that granting autonomy to local governments may not solve their problems.

    He stressed that the main issue was that of inadequate funding which must be addressed to allow local governments function effectively.

  • Banks lost N2.19bn to fraudsters In 2016 – CBN

    Banks lost N2.19bn to fraudsters In 2016 – CBN

    The Central Bank of Nigeria, CBN, on Tuesday said that Deposit Money Banks in the country lost a total of N2.19bn to fraudsters in the 2016 fiscal period.

    The figure was contained in the Nigeria Electronic Fraud Forum Annual Report, which was unveiled by the CBN Governor, Mr. Godwin Emefiele, during the NEFF stakeholders’ workshop on cybercrime.

    The conference with the theme: ‘Tackling enforcement challenges under the Cybercrime Act’, was held to address some of the impediments to the enforcement of the Act.

    The report, which was made available to newsmen, stated that 19,531 fraud cases were reported for the DMBs in 2016 as against 10,743 in 2015.

    It stated that although there was an 82 per cent increase in reported fraud cases as compared to 2015; the banking sector witnessed marginal reduction in the value of attempted frauds and actual losses.

    For instance, the report stated that attempted frauds’ value dropped from N4.37bn in 2015 to N4.36bn in 2016, while actual loss value declined from N2.25bn to N2.19bn.

    A breakdown of the actual amount lost showed that across the counter transactions accounted for the highest with a total value of N511.07m.

    This was followed by Automated Teller Machine transactions, with N464.5m; Internet banking, N320.66m; Point-of-Sale transactions, N243.32m; and mobile banking transactions, N235.17m.

    Losses from e-commerce transactions were put at N132.25m; web transactions, N83.77m; cheques, N4.55m; kiosks, N10.19m; and others, N190.97m.

    The report read in part, “Based on trend and human perception, it is believed that fraud rates increase towards the end of the year due to festivities observed during this period and the need for people to get more money.

    “But the truth is fraud can occur anytime, hence the need for us to always gear up our preventive and detective strategies.”

    Speaking on the theme of the workshop, Emefiele, who was represented by the Deputy Governor, Operations, CBN, Mr. Adebayo Adelabu, said the challenges faced while enforcing the Cybercrime Act, 2015 had made it imperative for a review of the law.

    He stated, “The protection of information infrastructure utilised in the delivery of financial services is considered critical all over the world, and it was because of the importance of securing infrastructure such as that of the financial sector, and protecting the underlying services from cyberattacks that the Cybercrime (Prohibition and Prevention) Act was enacted in 2015.

    Emefiele said, “It is now about two years into the commencement of the Act, and so it is not too early to conduct a holistic review of its implementation.”

    “Thus, your deliverables at this workshop should include a careful examination of the extent to which the obligations placed by the Act are fulfilled, and the general assessment of any challenges experienced in compliance with the provisions of the Act.

    “It is our natural expectation that following such careful and interesting review, this workshop would have very little difficulty in proffering the much needed solutions and making practical recommendations for the effective implementation of the Act from hereon.”

    The CBN governor stated that while the apex bank and banking operators had made efforts to reduce the incidents of fraud and ensure consumer confidence in the payment system, the Cybercrime Act, if effectively enforced, would serve as a deterrent and constant reminder to those who might wish to engage in illicit activities targeting the financial technology infrastructure.