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Banks’ Shares Rally As Thousands Lose Jobs

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Banks’ shares have rallied after two lenders fired almost 3,000 workers between them, and after shareholders of Fidelity Bank Nigeria and First City Monument Bank Plc approved bond sales.

Intercontinental Bank Plc advanced for the first day in 13, adding 46 per cent to close at N1.36 after it sacked 1,339 staff on December 18.

The shares had declined 89 per cent this year shares in Oceanic Bank International Plc, which had fallen 87 per cent in 2009, posted their steepest two-day rise in more than a month and advanced 4.5 per cent to close at N1.40 after the bank fired 1,500 employees.

The banks led a gain of as much as 1.7 per cent in the Nigerian Stock Exchange’s Banking index, its biggest intra-day rise since November 11. The index has lost 37 per cent this year and closed 0.6 per cent higher.

“the only thing banks can do is look at their cost structures since revenue insn’t growing”,

Bismarck Rewane, the Chief Executive Officer of Financial Derivatives and a number of the committee set up by the government to advise it on Nigeria’s response to the global financial crisis, said “It’s a welcome development. They have to reduce cost”.

The dismissals form part of a shake-up following an audit by the Central Bank of Nigeria in August and September, which resulted in Governor Lamido Sanusi, firing chief executives of both banks and six others and injecting at least N620 billion naira ($4.12 billion) into 10 banks including intercontinental and Oceanic; to boost their capital and Liquidity.

Nigeria’s All-Share Index, is the second-worst performer of 90 benchmark equity indexes on Bloomberg this year, after Ghana plunged 34 per cent in 2009 and 46 per cent last year.

Banks dragged the index down on concern they may have as much as $10 billion toxic assets, according to data in May from Eurasia group, a New York-based research company.

As much as two thirds of the bad debt is the result of a least N1 trillion of margin loans used to buy equities as they soared almost 13-fold since 2000.

Fidelity Bank headed for its highest close in two weeks, climbing 3.2 per cent to N2.58 after shareholders approved a N200 billion ($1.3 billion) bond sale on December 21. First City shareholders gave permission for the lender to raise N100 billion through a bond sale on December 16, company spokesman, Tunde Shofowora, said by phone from Lagos. The shares increased for the first day in four, adding 3.7 per cent to N7.19.

The two lenders are following Nigeria’s four biggest by raising funds through debt sales.

First Bank of Nigeria Plc, the West African nation’s biggest company by market value, will issue N500 billion in bonds after shareholders approved the sale on October 8.

Zenith Bank Limited, the second-biggest lender, will raise N300 billion following approval at a meeting on October 30, spokesman Timi Ejoor, said by phone.

Guaranty Trust Bank Plc, the third biggest, started a five year, naira-denominated bond issue on December 9, while United Bank for Africa Plc, the fourth-biggest lender, received the go-ahead to raise N500 billion through a bond sale on October 2.

The Nigerian bank shake-up may create opportunities for buyers. Standard Bank Group Limited, Africa’s largest lender, is looking at Nigeria for possible acquisition opportunities as the banking crisis slashed valuations, Johannesburg-based spokesman Eric Larsen, said.

Old Mutual Plc, the biggest insurer on the continent, seeks to follow smaller rivals such as Liberty Holdings Limited and FirstRand Limited into Africa, including Nigeria, to boost growth and make up for losses in its U.S business.

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Customs Intercepts N6, 974m Worth PMS

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Barely two weeks after seizing a tank-full equivalent of Premium Motor Spirit (PMS), known locally as petrol, the  Seme Command of the Nigeria Customs Service has intercepted 1005 jerry cans of the same product.
The product, amounting to 3000 litres, is with Duty Paid Value (DPV) worth  of N6,974,750.00.
A statement signed by the Command’s Spokesman, DSC Hussaini Abdullahi, and made available to our correspondent in Lagos at the weekend, said the seizure was made during a routine check of the adjoining creeks, beaches, and flash points.
The statement quoted the Customs Area Controller, Comptroller Bello Mohammed Jibo, as saying that “as long as unrepentant and undesirable elements engage in acts of economic sabotage and smuggling, so shall officers and men remain a step ahead to counter their illicit trades”.
The statement further reads: “In continuation of our efforts to suppress smuggling of petroleum products within the nooks and crannies of the command, officers and men of the Seme Area Command on a routine patrol along the creeks within Seme and Badagry intercepted another large quantity of petroleum products in sacks.
“After successful evacuation of the said item to the command’s premises where examination was conducted, one thousand and five (1005)x 30 litres of jerry cans of petroleum products each, equivalent to thirty thousand, one hundred and fifty (30,150) litres  were discovered. The Duty Paid Value (DPV) is Six million, nine hundred and seventy four thousand, seven hundred and fifty naira (N6,974,750.00), only”.
While showcasing the seized products, Jibo commended the doggedness, patriotism, dedication and high level of professionalism exhibited by his men, noting that the new Land Cruiser patrol vehicles (Buffalo) recently donated to commands by the Management of the NCS has aided the operation of the command, as the vehicles enhance access to a wider circle.

By: Nkpemenyie Mcdominic, Lagos

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NASS, MDAs’ Non-Remittance Of Taxes Cost FIRS N5.8bn …NCAA Tops Defaulters With N2,984bn

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Non-remittance of tax deductions by the National Assembly, comprising the Senate and House of Representatives, as well as Federal Ministries, Departments, and Agencies has resulted in a loss of tax revenue amounting to N5.8 billion by the Federal Inland Revenue Service (FIRS) in 2019.
Disclosing this in its 2019 Annual Report on non-compliance, internal control, and weakness issues in MDAs of the Federal Government of Nigeria, the Office of the Auditor General of the Federation said it is for the year ended December 31, 2019.
The MDAs, according to the Report, are the Federal Ministry of Agriculture and Rural Development; Federal College of Freshwater Fisheries Technology, New Bussa; Advertising Practitioners Council of Nigeria; Nigerian Civil Aviation Authority; Nigerian Communications Satellite Limited; Hussaini Adamu Federal Polytechnic, Jigawa State; Federal Medical Centre, Keffi, Nasarawa State; Department of Petroleum Resources; National Assembly Service Commission; and Nigerian Correctional Services.
It stated that between 2018 and 2019, the MDAs failed to either remit one per cent stamp duty, value added tax, withholding tax or Pay As You Earn tax deducted from awarded contracts, thereby contravening sections of the Financial Regulations and Treasury Circular issued on December 29, 2015.
The Report further stated that Paragraph 234(I) of the Financial Regulations states that “it is mandatory for accounting officers to ensure full compliance with the dual roles of making provision for the Value Added Tax and withholding tax due on supply and services contract and actual remittance of same”.
Specifically, it quoted Paragraph 235, saying, “Deduction of VAT, WHT, and PAYE shall be remitted to Federal Inland Revenue Service at the same time the payee who is the subject of deduction is paid”.
It continued that the Treasury circular Ref No. TRY/A12&B12/2015 and OAGF/CAD/VOL.II/390, dated December 29, 2015, states that “1% Stamp Duty chargeable on contract awards and the remittance be made to the relevant tax authority (Federal Inland Revenue Service)”.
The Report also stated: “The audit observed that the sum of N5,828,621,715.06 was the amount of taxes not remitted by 12 Ministries, Departments and Agencies.
“The Nigerian Civil Aviation Authority (NCAA) has the highest amount of N2,984,887,250.00, while Federal College of Freshwater Fisheries Technology, New Bussa has the least amount of N1,021,011.13”.

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NCS, Apapa Records N870,39bn Revenue Boost

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The Apapa Command of the Nigeria Customs Service (NCS) recorded an impressive performance in its revenue generation and anti-smuggling campaign in 2021.
Disclosing this recently during a review of its activities in 2021, the Area Controller of the command, Comptroller Yusuf Malanta, said the sum of N870.38 billion of the N2.24 trillion announced recently by the Service was collected in Apapa Command in 2021.
Giving an insight into the command’s revenue profile, Malanta told newsmen that the  N870.38 billion collected by the command was 68 percent more than what was collected in 2020 which was N518.4 billion.
He stayed that the Command recorded 103 seizures worth N31 billion in 2021.
Malanta identified the seizures as 46.55kg of cocaine, which was concealed on board MV Karteria and MV Chayanee Naree laden with raw sugar; containers of foreign parboiled rice, tomato paste, secondhand clothes, unregistered pharmaceuticals such as captagon pills, tramadol, codeine syrup, etc.
“These were seizures made in accordance with the provisions of sections 46, 47, and 161 of the Customs and Excise Management Act (CEMA) CAP C45 LFN 2004. These seizures are condemned by a competent court of law and the suspects are still undergoing investigation and interrogation”, the Customs boss said.
He continued that 5.38 metric tons of non-oil commodities were exported through the command as against 1.3 million metric tons in 2020.
According to him, the Free on Board (FOB) value for the exported items rose from $340 million (N140 billion) in 2020 to $641 million (N264 billion) last year.

By: Nkpemenyie Mcdominic, Lagos

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