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Agency Predicts Low Profits For Commercial Banks In 2018

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An international credit rating agency, Fitch Rating has predicted that commercial banks operating in Nigeria may find it challenging to sustain profitability in 2018, given the decline in net Treasury Bill (T-bill) issuance programme in the first quarter of 2018.
The rating agency noted that the Central Bank of Nigeria (CBN) Treasury Bill (T-Bills) slowdown may impact negatively on Nigerian Banks profits in 2018, with the likes of Guaranty Trust bank Plc, Zenith Bank and United Bank for Africa Plc, among others, may find it more difficult to sustain profitability during the year. Coupon rates on T-Bill and bond were reduced as the Federal Government looks to increase its financing from external sources and longer-dated domestic issuance. According to Fitch, “We expect falling T-bill yields and lower issuance to put pressure on Nigerian banks’ profitability in 2018.
The CBN’s latest issuance schedule shows N1.1 trillion ( of rollovers in first quarter of 2018 against N1.3 trillion of maturing bills. In 2017, rollovers fully covered maturing bills.
“Performance metrics at all banks will be affected by weak demand for lending, falling T-bill yields, lower foreign-currency translation gains and rising loan impairment charges, but the largest banks are best placed to withstand these challenges,” Fitch said. According to Fitch, record T-bill issuance in 2017 helped support the Central Bank of Nigeria (CBN)’s strategy to maintain stability at the foreign exchange market as global oil prices continued to rally.
The report by Fitch said, “High yields on T-bills issued in 2017 (around 13per cent-14per cent on 90-day T-bills) attracted investors and helped to support the naira. “An increase in oil export earnings and the introduction in April 2017 of the Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX) mechanism, commonly referred to as the Investors and Exporters’ FX Window (I & E FX), also helped naira stabilisation during the second half of 2017.”
“Nigerian banks are highly reliant on net interest income for profitability and T-bills proved to be an important source of profits in 2017. “Interest on securities represented 30 per cent of total gross interest earned in nine months of 2017, averaged across Nigerian banks rated by Fitch (2016: 23 per cent),” the report by Fitch explained. Fitch said as at nine months ended September 2017, federal government securities including T-bills represented more than 15per cent of the banks’ total assets as new lending fell, reflecting weak credit demand, tighter underwriting standards and banks’ reluctance to extend new loans as they focused on extensive restructuring of troubled oil-related and other portfolios. The report on five Nigerian banks stocks stated: “Even the country’s largest banks cut back on new lending, with Guaranty Trust Bank’s (GTBank) stock of outstanding loans falling 10 per cent during nine months of 2017, FBN Holdings’ by 4.6 per cent, Zenith Bank’s by 3.7per cent and Access’s by 1.1 per cent. “United Bank for Africa’s loan book grew 5.6 per cent, but this is likely to have been driven by non-Nigerian lending as the bank operates in 22 other African countries.
“Fitch noted that GTBank has one of the highest Return On Average Equity (ROAE) followed by Zenith Bank and Access Bank as at nine months ended September 30, 2017. The report revealed that banks with four to six per cent ROAE may struggle to remain in profitability this year.
“Operating returns are still strong at GTBank (9M17 (ROAE): 37 per cent), Zenith (28 per cent), UBA (22 per cent) and Access (20 per cent), while FBNH’s operating ROAE is lower (12 per cent) but improving. “However, some second-tier banks with nine months of 2017 operating ROAE of four per cent-six per cent may struggle to remain profitable in 2018,” the report added.

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Adeniyi’s Impersonator Faces Trial, Knows Fate, July 3

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The Federal High Court sitting in the Central Business District of the Federal Capital Territory, Abuja, has conducted a hearing of one Ibrahim Shu’aibu, a 50-year-old man, for assuming the character of the Comptroller-General of Customs (CGC), Bashir Adewale Adeniyi, among other distinguished personalities in Nigeria, to commit fraudulent activities.
The Nigeria Customs Service (NCS) had in January addressed the media about the suspect’s apprehension by the Service’s Police Unit following his involvement in fraudulent activities, which included luring numerous citizens to pay him money for the issuance of job appointment letters.
During the court hearing, the lead Counsel of the NCS, Abidemi Adewumi-Aluko, said the accused was arraigned on a nine-count charge to which the defendant pleaded not guilty.
Justice Binta Nyako, the Presiding judge, adjourned the hearing to Wednesday, 3 July 2024, and ordered that the accused be remanded with the Nigerian Correctional Service pending the fulfillment of bail requirements.

By: Nkpemenyie Mcdominic, Lagos

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Trans-Border Trade Setback: Shippers’ Council Pledges Support For ITC 

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The Nigerian Shippers’ Council (NSC) has expressed readiness to support the International Trade Centre (ITC) as part of measures toward resolving challenges faced by trans-border traders and trade facilitation.
Executive Secretary, Nigerian Shippers’ Council, Barr. Pius Akutah, disclosed this in Lagos last Friday, when  delegates of ITC, paid a working visit on a fact finding mission.
While harping on the role of the Council as an ombudsmen in port operations, Akutah emphasized that trade facilitation is a major initiative of the NSC, pledging to provide the necessary support to ensure the success of the study brought forward by the ITC team.
He noted that the study will strengthen the Council’s ability to formalize informal trade at border areas, gather statistics, and plan for trade volumes.
Akutah stated that the focus of the study is on agricultural products, as a significant area of potential for Nigeria, not only in the African region, but also globally.
He expressed optimism that the study will help develop skills and improve operations at the Border Information Centre (BIC) managed by the Council.
“Trade facilitation is one of the major aspect of what we do so we are going to give you the necessary support to achieve the success that is desired.
“The study will help us to plan and develop more skills in terms of what we do at the Border Information Centre. Shippers Council is a partner and I want us to take our partnership to the next level that will focus on engagement with our stakeholders”, Akutah noted.
Speaking earlier during the courtesy visit to the NSC headquarters, Associate Programme Officer, ITC, Richard Eke- Metoho, who led the delegation, said the visit to the Council was part of the team’s ongoing study to identify areas for improvement in trade facilitation, particularly at border crossing points.
He stated the importance of collecting data from the Nigerian Shippers’ Council, which manages a border information center at Seme-Krake border.
According to him, some of the identified challenges faced by traders and truck drivers using the Seme-Krake border, a key trade route is the number of checkpoints and lack of scanners.
He said information collected by the team will not only identify existing trade facilitation measures that are working effectively, but also lead to the development of new trade facilitation measures that address the challenges faced by traders
He said, “We are here to collect experience from the Nigerian Shippers Council.
“From our interactions with the Shippers Council, we keep finding similar problem faced by traders, most especially on the number of checkpoints and scanners that are really needed especially for transporters and truck drivers.
“It is still an ongoing study. The more information we collect right now, the more it will help us to make more informed decision process. At the end of the study, we will be able to develop a report that will pinpoint all the main obstacles that traders are facing”.

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Customs Condemns Attack On Officers In Katsina

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The Nigeria Customs Service (NCS) has condemned the brutal attack on its officers and men at the Gamji Makaho checkpoint in the Dankama area of Katsina State on April 17, 2024, which claimed the life of Customs Assistant II Auwal Haruna.
The Service vowed that it would stop at nothing in securing justice for the victims of the attack.
NCS also said it would rejig its anti-smuggling operations while strengthening collaborations with other sister security agencies as part of measures to reinforce the fight against smuggling.
Speaking on the resolve of the management to pursue the matter to its logical conclusion, Comptroller General of Customs, Bashir Adewale Adeniyi extended his heartfelt condolences to the family and colleagues of CA II Auwal Haruna.
He disclosed that the service, in close collaboration with other security agencies, is tirelessly working towards “apprehending the perpetrators of this reprehensible act and ensure they face the full consequences of the law.
“Violence against our officers is utterly unacceptable, and we will pursue every avenue to bring those responsible to justice.
“The safety of our personnel and the security of our borders remain paramount. We are committed to working with traditional rulers, government bodies, and sister agencies to combat this heinous crime against our personnel”.
He further reaffirmed the unwavering commitment of the service under his watch to combating smuggling and other cross-border crimes, adding that the Service will not falter in its mission to uphold the laws of the land and protect the interests of the Nigerian people.
The CGC said: “Intelligence available to us indicates that certain unpatriotic community members are harbouring suspected accomplices involved in this heinous crime.
“We implore these individuals to embrace patriotism by aligning with the laws and refraining from condoning illegality. It is in the best interest of our communities and nation to collaborate with law enforcement agencies to root out criminal elements and ensure that justice prevails”.

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