Business
Skye Bank, Sterling Bank Lose N18bn To Bad Loans
Skye Bank Plc and Sterling Bank Plc have recorded net loss of about N18 billion as provisions for classified loans ate deep into profitability. Audited report and accounts of the two banks for the 12 month period ended September 30, 2009, showed that the two banks altogether recorded exceptional items totaling N45 billion as provisions and write downs for bad loan assets.
The Central Bank of Nigeria (CBN) has insisted that all banks must fully disclose and make adequate provisions for non-performing loans, a directive that has seen many banks account in the red.
Skye Bank’s report showed a net loss of about N13.3 billion in 2009 as against profit after tax of N15.13 billion in 2008. Pre-tax loss stood at N12.63 billon in 2008 compared with pre-tax profit of N20.45 billion in corresponding period of 2008. The bank, however, expanded the top-line by 36 per cent with gross earnings of N101.45 billion in 2009 as against N74.62 million in 2008.
In the same vein Sterling Bank recorded net loss of about N4.6 billion in 2009 as against net earnings of N6.58 billion in 2008. Pre-tax loss had stood at N4.35 billion in 2009 compared with profit before tax of N7.98 billion in 2008. Sterling Bank also reported marginal increase in gross earnings from N36.30 billion in 2008 to N37.77 billion in 2009.
Both banks indicated that provisions for bad loans adversely affected their performance during the period. Skye Bank indicated that it recorded an exceptional item of N34.18 billion while Sterling Bank reported exceptional item of N10.83 billion. Both Skye Bank and Sterling Bank have been cleared as sufficiently in stable condition for sustainable operations by the recent audits of the CBN. The apex bank had on August 14, 2009 cleared Sterling Bank Plc in the first batch of the industry-wide audit, the same day it took over and replace the management of five banks adjudged to be in grave situation.
The first batch of troubled banks include Union Bank of Nigeria (UBN) Plc, Intercontinental Bank Plc, Oceanic Bank International Plc, Afribank Nigeria Plc and Finbank Plc. The CBN on October 2 released the report of the second batch of its special examination giving nine banks including Skye Bank clean bill of health while taking over the management of three other banks. Two other banks were given deadlines to recapitalize their operations.
The nine banks that were cleared included Access Bank Plc, Citibank Nigeria Limited Ecobank Nigeria Plc, Fidelity Bank Plc, First City Monument Bank Plc, Skye Bank Plc, Stanbic IBTC Bank Plc, Standard Chartered Bank Limited and Zenith Bank Plc. All the Public Limited Liability Companies are quoted on the NSE. The apex bank stated that Unity Bank, another quoted bank, was adjudged to have insufficient capital but not in grave situation because it has a healthy liquid position. Both Unity Bank and Wema Bank have been directed to recapitalize their operations by June 30, 2010.
The apex however, took over the management of three other banks including Bank PHB Plc, Spring Bank Plc and Equitorial Trust Bank, bringing to eight total number of banks under the management of CBN appointed management.
Sanusi Lamido Sanusi, governor, Central Bank of Nigeria, has blamed banks for huge concentration of their exposures to the stock market and oil and gas sector, poor corporate government and depleted capital.
Business
Food Vendors, Others Relocate To New Site At PH Airport
The raging controversy between the Port Harcourt International Airport Management and restaurants/canteen operators and theirallies over relocation has been brought under control, as the operators have commenced relocation to their structures at the new site.
Recall that there had been serious feud over a directive by the Manager of the airport, Mr. Michael Area, for food vendors and their allies to relocate to the new site.
They insisted that the new site was too distant and hence, would negatively affect patronage from customers, with possible loss.
They further also insisted that it wouldcost them much money to put up another structure, given the economic situation in the country, since the airport management did not build any structure for them, apart from providing the empty land they have to also pay for.
The situation had led to flexing of muscles, which made the Airport Manager to order for sealing of all shops, resulting in scarcity of food, as airport users could not find a place to eat, apart from the only Genesis fast food spot available.
As at last Friday, The Tide observed that most of the food vendors had transferred their structures to the new place, and had started doing business there already.
Meanwhile, customers have started settling down at the new location as they were seen patronising shops for foods and drinks, in spite of the distance.
Few of the remaining structures at the old site, The Tide further gathered, will also be removed as quickly as possible, and the owners are making efforts to get funds for the job to be done.
One of them, Mrs Aka Love explained that she was going to relocate to the new place before the end of March.
Currently, business activities at the old site have come to null, as the place which was usually a beehive of food, drinks and relaxation, has completely winded down.
By: Corlins Walter
Business
MOWCA Strengthens Maritime Crime Prevention
Secretary General of the Maritime Organisation of West and Central Africa (MOWCA), Dr. Paul Adalikwu, has stepped up interaction with the United States Government to lift restrictions placed on some member countries allegedly implicated in illicit shipping activities.
Adalikwu, who led a delegation from the MOWCA Secretariat to the US Embassy in Abidjan for a first leg of the strategic consultation aimed at promoting seamless participation of MOWCA countries in international trade within the global maritime space, reiterated the organisation’s commitment to the best ethical and lawful maritime practices.
Addressing the U.S Ambassador to Côte d’Ivoire, H.E Mrs Jessica Davis Ba, the MOWCA SG stated the organisation’s interest in promoting the International Ship and Port facility Security (ISPS) code which aims at enhancing security of vessels and their ports of call.
He expressed the commitment of MOWCA in promoting environmentally friendly, safe and cost effective shipping without any encumbrance that may limit the economic potential of member countries.
Dr Adalikwu recalled that at the instance of the U.S. Department of State invitation, MOWCA participated in the 2023 Registry Information Sharing Compact (RISC) Conference in Larnaca, Cyprus, on February 28–March 1, 2023, and a virtual meeting held on June 6 2023, with Mrs Jennifer Chalmers, Officer in change of Counterproliferation Initiative.
He recalled The U.S. DOS willingness to support MOWCA’s effort for preventive maritime security through the establishment of the Center for Information and Communication (CINFOCOM) with the aim to ensure a maritime situational awareness domain within MOWCA’s member states’ waters.
He added that MOWCA under his watch is committed to training and retraining of maritime practitioners and experts to enhance the human capital capabilities of member states.
The CINFOCOM will help prevent transnational crimes committed at sea like sanctions evasion by North Korea and other state actors, who exploit poor enforcement due diligence by ship open registries to circumvent United Nations and U.S. trade restrictions.
By: Nkpemenyie Mcdominic, Lagos
Business
Nigeria’s Public Debt Hits N97.3trn – DMO
The Debt Management Office (DMO) has hinted that Nigeria’s public debt increased by 10.7 per cent from N87.87 trillion in the third quarter of last year, to N97.34 trillion as at December 31, 2023.
DMO, in an update data released last Friday, said the increase in the debt stock was largely due to new domestic borrowing by the Federal Government to part finance the deficit in the 2024 Appropriation Act and disbursements by multilateral and bilateral lenders.
The office noted that the N97.3 trillion public debt comprises of domestic debt of N59.12 trillion and external debt of N38.22 trillion. The sum of $3.5 billion was used to service external debt during the review period.
“Nigeria’s Public Debt Stock as at December 31, 2023 was N97.34trillion or $108.229 billion. This amount comprises the domestic and external debt stocks of the Federal Government of Nigeria (FGN), the 36 States Governments, and the Federal Capital Territory (FCT).
“There was an increase of N9.43 trillion over the comparative figure for September, 2023, which was largely due to new domestic borrowing by the FGN to part finance the deficit in the 2024 Appropriation Act and disbursements by multilateral and bilateral lenders.
“At N59.12 trillion, total domestic debt accounted for 61 percent of the total public debt stock, while external debt at N38.22 trillion accounted for the balance of 39 percent.
“Consistent with the debt management strategy, Nigeria’s external debt stock was skewed in favour of loans from multilateral (49.77 percent) and bilateral lenders (14.02 percent) or total of 63.79 percent which are mostly concessional and semi-concessional.
“Whilst the DMO continues to employ best practice in public debt management, the recent and on-going efforts of the fiscal authorities to shore up revenue will support debt sustainability”, DMO stated.
By: Corlins Walter
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