Standard Bank Targets Troubled Banks For Acquisition
Standard Bank Group Limited is currently looking at the nation’s ailing financial system with a view to acquiring more banks in order to expand its operation within the West African regional market.
This development followed continued crash in the price of banks’ equity and the reform programme of Central Bank of Nigeria (CBN) that has put the nation’s banking system in better shape.
Erik Larsen, the bank’s spokesman, said that the current situation in Nigeria has presented good opportunities for them to expand their operation within the West Coast. “Standard Bank Group is watching developments with interest and Nigeria remains a key strategic market for standard bank”, he said, adding that the bank would soon move to achieve this noble objective.
It would be recalled that the nation’s banking crisis began in August when the CBN fired eight chief executive officers and injected N620 billion into the banks to boost their capital base. Banking shares extended falls recently after Intercontinental Bank Plc and Oceanic Bank International Plc reported heavy losses in their last financial year.
Razia Khan, head of Africa research at Standard Chartered Bank noted that rivals in the U.S., the U.K., South Africa and Nigeria will not be “blind” to buying opportunities in Nigeria following the losses and stock price declines.
According to her “the largest banks will probably still be Nigerian but, for South Africa, Nigeria offers a big prize, because South Africa has the appetite to do more in Africa’s second – largest economy.
Foreign banks, such as Citigroup Inc and Barclays Plc will also be watching.
John storey, analyst with Bank of America-Merrill Lynch, said in a note recently that South African banks, in particular First Rand, Absa and Standard Bank, have expressed a strong interest to acquire and further expand operations in Nigeria.
He said that “our base case is actual mergers and acquisitions will be slow to materialise but aggressive posturing could drive a re-rating.”
Louis Zeuner, deputy chief executive officer ABSA Group Limited said recently that the lender is “not involved in any discussions in Nigeria” and that having a representative office in the West African country is “adequate”.
First Rand Ltd, South Africa’s second-largest banking group, did not immediately respond to questions. The lender said in September this year that it is keen on participating in any consolidation.
Concerns about the asset quality of Nigeria’s banks will dominate storey’s investment view in 2010, he said. Impairement charges will not “normalise” next year, he wrote, adding that banks usually take 24 months to fully recover from a crisis.
Guaranty Trust Bank Plc is storey’s top pick in Nigeria, “we see Guaranty Trust Bank as the best-in-class bank within Nigeria that provides exposure to upside surprises to the oil and macro-economic story.
Zenith Bank, United Bank for Africa, Guaranty and First Bank are the four largest banks in Nigeria by market capitalisation and appear well-placed to gain market share in a consolidated sector.
Infrastructure Deficit, Insecurity, Limit Maritime Contribution To GDP – Expert
A Maritime stake holder, and Chairman of Sifax Group, Taiwo Afolabi, has attributed maritime industry’s minimal contribution to Nigeria’s Gross Domestic Product (GDP) to infrastructure deficit, insecurity on the nation’s waterways, low level of technology adoption, and deployment in the sector.
Afolabi made this known at the 5th Taiwo Afolabi Annual Maritime (TAAM) conference organised by the Maritime Forum of the faculty of law, University of Lagos.
Afolabi noted that other hindrances are foreign exchange bottleneck and inconsistent policies.
“These have limited the ability of the sector to contribute significantly to the country’s Gross Domestic Product GDP.
“If well harnessed, the maritime industry has the potential to become a major revenue earner for the country, particularly with the declining oil revenue.
“The lessons of the last few years as a nation should not be lost on us. The non-oil sector is increasingly becoming the mainstay of the country’s economy. We have funded our national budget in the last few years majorly without proceeds from oil but from other sectors.
“The days of our over reliance on oil is behind us now and it’s about time we focused on transitioning from an oil-dependent economy to non-oil reliance.
“The maritime sector, I can say without any fear of contradiction, will play a crucial role in this economic transitioning if more attention is committed to the industry.
“Judging by the potentials of the industry, we are of the opinion and belief that Nigeria’s maritime industry can rank among the best in the world.
“It will only take careful planning, progressive policies, generous funding, enabling environment, friendly economic policies, manpower development and massive infrastructural development”, he noted.
Loans Repayment Default: DMO Exonerates Nigeria
The Debt Management Office (DMO) has refuted the claim by the Socio-Economic Rights and Accountability Project (SERAP) that Nigeria has defaulted in repaying its Chinese loans.
SERAP had in an earlier statement hailed the judgement that ordered the present regime led by President Muhammadu Buhari to account for how it spent $460 million obtained from China to fund the Abuja Closed-Circuit Television project which later was not implemented.
The NGO also quoted a report in its statement saying “Nigeria has failed to repay loans for which penalties stand at N41.31bn”.
But DMO in its refuttal said the statement is ‘false’ as Nigeria has not defaulted in its loan repayment.
It said, “Nigeria is fully committed to housing its debt obligations and has not defaulted on any of its debt service obligations”, DMO said on Monday.
SERAP had sued the Federal Government following a 2019 disclosure by the Minister of Finance, Zainab Ahmed that “Nigeria was servicing the loan”, adding that she had “no explanations on the status of the project”.
She reportedly said, “We are servicing the loan. I have no information on the status of the CCTV project”.
Giving his judgement, Justice Nwite agreed with SERAP that “there is a reasonable cause of action against the government. Accounting for the spending of the $460 million Chinese loan is in the interest of the public. It will be inimical for the court to refuse SERAP’s application for judicial review of the government’s action”.
The presiding justice also said the Minister of Finance is in charge of the finance of the country and “cannot by any stretch of imagination be oblivious of the amount of money paid to the contractors for the Abuja CCTV contract and the money meant for the construction of the headquarters of the Code of Conduct Bureau (CCB)”, SERAP said.
CBN Names Four Firms To Print Cheques
Nigeria’s apex banking institution, Central Bank of Nigeria (CBN), has named four local firms for the printing of cheques, excluding the Nigeria Security Printing and Minting Company (NPSMC) PLC.
The list of the approved firms for the printing of cheques was contained in a circular issued by CBN.
The circular, which was signed by the Director of Banking Services, Sam Okojere, said the approved firms include Superflux International Limited, Tripple Gee and Company, Yaliam Press Limited, and Marvelous Mike Press.
“The re-accreditation of Cheques Printers and Cheque Personalisers is in line with the relevant qualification criteria”, CBN stated.
The circular also revealed that seven banks were approved as personalisers of cheques: they are Zenith Bank Plc, Ecobank Plc, First Bank Ltd, Stanbic IBTC Bank Plc, Keystone Bank Ltd, Providus Bank Ltd and Wema Bank Plc.
It further disclosed that all accredited printers and personalisers had been duly notified and certificates issued.
The Nigeria Security Printing and Minting Company Plc is the sole printer of N200, N500, and N1000 new notes.
Nigeria Security Printing and Minting Company Plc and Euphoria Group Limited were accredited and approved on Thursday, 04 December 2014, in a letter REF: BPS/DIR/GEN/CIR/02/033.
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