Connect with us
nairametrics
UBA ads

Companies

GE to open $100 million plant that can service and repair power turbines

Published

on

Contrary to earlier reports, General Electric (GE) plans to launch a repair and service plant for power turbines. News outlets, including on Nairametrics had reported that Generic Electric was about complete work on its gas turbine plant which will be ready early next year.

However, an email sent to Nairametrics by General Electric confirmed that it was indeed a repair and service plant for power turbines that was launched at a cost of over $100 million.

UBA ADS

The plant will help aid the tap growing demand for gas-fired power plants in Nigeria. Here is what we know about the plant.

  • Country rep, Lazarus Angbazo said the GE plant would be a multi-use facility to support its clients in the power, oil and gas sector, adding that the U.S. company has invested in some local power plants.
  • Construction work on the plant, located in Calabar, is expected to be completed in December.
  • Operations is expected to commence in the first quarter

GEis one of the biggest conglomerates in the world with operations spanning various areas including Engineering, Oil and gas, Renewable energy, and Finance. The group had revenues of $123 billion in 2016.

The turbine plant will be of great benefit to generating companies (Gencos) who will no longer need to import them from other countries. Several analysts have posited that epileptic power is one of the major reasons Nigerian industries are unable to produce competitively. Most industries are forced to rely on alternative sources of energy like diesel, which come with associated costs.

GTBank 728 x 90

 

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com

Click to comment

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Companies

CBN debits banks another N459.7 billion for failure to meet CRR target

Sadly, this move, in addition to similar policies by the CBN, has left many banks cash-strapped and unable to pursue various profitable ventures.

Published

on

CBN

The Central Bank of Nigeria (CBN) has debited twenty-six banks, including merchant banks, to the tune of N459.7 billion for failure to meet their CRR (Cash Reserve Ratio) obligations. The fresh debit, which Nairametrics reliably gathered occurred yesterday, has left many stakeholders in the banking sector very upset.

The details: Among the banks that were most affected are United Bank for Africa Plc (N82.3 billion), First Bank of Nigeria Ltd (N59.3), Zenith Bank Plc (N50 billion), First City Monument Bank (FCMB) Limited (N45 billion), and Guaranty Trust Bank Plc (N40 billion). The rest of the affected banks can be seen in the table below.

UBA ADS

Note that the latest CRR debits are coming barely one month after a lot of banks were collectively debited to the tune of N1.4 trillion for the same reason in April. Between then and now, a lot of other minor CRR debits have occurred. Nairametrics understands that the apex bank now debits banks on a weekly basis.

Some backstory: During the CBN’s Monetary Policy Committee (MPC) meeting that was held last month, committee members voted to retain CRR rate at 27.5%. The rate was increased in January this year from 5% to its current level after the apex bank cited inflationary pressure concerns. What this means, therefore, is that Nigerian banks are required to keep 27.5% of their deposits as CRR with the Central Bank of Nigeria.

GTBank 728 x 90

Download the Nairametrics News App 

But banks are silently upset: Sadly, this move, in addition to similar policies by the CBN, has left many banks cash-strapped and unable to pursue various profitable ventures. While reacting to the latest development, a banker who refused to be identified, said:

“What we’ve seen in recent times is that the CBN just indiscriminately debits banks, usually towards the stale-end of every week. They will look at your bank account and if your liquidity is plenty, they will debit you.

Deal book 300 x 250

“You know the central bank also does what we call retail FX intervention, that is when they sell FX to corporates. Now, because they don’t want banks coming with huge demands, what they do is that a day before the FX sales, they debit the banks so that the naira you have available is small and you cannot put them under pressure because of your FX demands. That has really been the driver.

READ ALSO: Central banks digital currencies pose a threat against the U.S dollar

app

“We understand that the central bank had set up a special CRR team that is supposed to monitor banks’ CRR once a month. But now, the team monitors banks’ CRR on a weekly basis. This is why the central bank is effectively debiting banks on a weekly basis. Some weeks ago, they debited some banks about N1.4 trillion. That was one of many. Between that time and now, there have been more debits that have happened. But the debits that are huge/significant are what is troubling the banks. There was a N300 billion that happened about two weeks ago. and then yesterday that was this N459.7 billion that was also debited.

Patricia

“These are huge amounts that are leaving the banking sector. It’s a squeeze on the banks. A bank like First Bank, for instance, has about N1.4 trillion in CRR with the Central Bank. And there is Zenith Bank with equally as much as N1.5 trillion. These are monies that banks can potentially put in loans at 52% at 30%, or even put in money market instruments at maybe 10%. So, for a shareholder of these banks, this CRR debits are impairing the banks’ ability to increase their earnings because now are not able to use the funds that are legitimately theirs to create money for their shareholders. And the question is that under what framework is the Central Bank choosing to take people’s money?”

Continue Reading

Companies

NAICOM gives insurance companies additional one year to recapitalise

In the meantime, the insurance companies are expected to meet at least half of the capital requirements by the end of 2020. The final deadline to fully recapitalise is September 2021. 

Published

on

NAICOM, Recapitalisation: 44 firms get NAICOM’s nod , NAICOM boss makes case for recapitalisation, insists the exercise will solidify insurance sector , NAICOM extends recapitalisation deadline for insurance companies to meet new capital base, Due to lack of ‘process’, NAICOM says no insurance firm has met recapitalisation requirement, Insurance: Recapitalisation exercise sets consolidation in motion, Insurance firms are reportedly selling off assets to meet NAICOM’s recapitalisation deadline, Insurance: NAICOM mulls extension of recapitalization exercise

The National Insurance Commission (NAICOM) has given insurance firms in the country one more year to meet the recapitalisation obligation that was recently set for them.

Apparently, it became imperative for NAICOM to set a new deadline for the recapitalisation process, considering how the Coronavirus pandemic has disrupted the activities of most companies, including the insurers. Bloomberg quoted the insurance regulator to have said that “the incidences of COVID-19 pandemic have made it difficult to proceed with the Dec. 31, 2020 recapitalization deadline.”

UBA ADS

In the meantime, the insurance companies are expected to meet at least half of the capital requirements by the end of 2020. The final deadline to fully recapitalise is September 2021.

Recall that Nairametrics had reported in April about NAICOM considering the extension of the recapitalisation deadline. Now, it has finally happened. And this is the third time an extension has been implemented since the recapitalisation programme was first announced in May 2019. Prior to this time, NAICOM had extended it from June 30th, 2020 to December 31st, 2020.

The recapitalisation programme is requiring life insurance firms to meet a minimum paid-up capital of N8.0 billion, up from N2.0 billion previously. In the same vein, general insurance companies are required to raise their minimum paid-up capital to N10.0 billion from N3.0 billion previously.

GTBank 728 x 90

READ MORE: If you experience these signs then know your salary is not enough

The regulatory capital for composite insurance was raised to N18.0 billion from N5.0 billion previously while reinsurance businesses are now required to have a minimum capital of N20.0 billion from a previous N10.0 billion.

Nairametrics had reported that some insurance companies have been struggling to meet these requirements. There were also wide-spread speculations over possible mergers/acquisitions in the insurance sector. At the moment, only the top insurance firms have been able to meet the capital requirements. The deadline extension is, therefore, expected to help them comply.

Deal book 300 x 250

Continue Reading

Companies

Nigeria’s tier-1 banks earn N18.4 billion from account maintenance charges in Q1 2020

Banks’ earnings from account maintenance charges, though low when compared to other revenue streams, still make up a significant portion of their non-interest income.

Published

on

Nigeria's banks, Account Maintenance Charges

Nigeria’s tier-1 banks — comprised of First Bank, UBA, GTBank, Access Bank, and Zenith Bank (FUGAZ) — generated a total of N18.4 billion from bank maintenance charges in Q1 2020. The sum is 17.12% more than N15.6 billion that was generated by the five banks during the comparable period in 2019.

This is according to recent checks by Nairametrics Research, a breakdown of which revealed that Zenith Bank generated the most income from account maintenance fees, followed by Access Bank and then, GTBank.

UBA ADS

See the breakdown below.

  • Zenith Bank Plc: N5.7 billion
  • Access Bank Plc: N3.9 billion
  • Guaranty Trust Bank Plc: N3.3 billion
  • First Bank Plc: N3.1 billion
  • United Bank for Africa Plc: N2.3 billion

READ MORE: Stocktaking: Ebenezer Onyeagwu’s year as CEO of Zenith bank

What you should know about account maintenance charges

Banks’ earnings from account maintenance charges, though low when compared to other revenue streams, still make up a significant portion of their non-interest income.

GTBank 728 x 90

According to the latest directive by the Central Bank of Nigeria on bank charges, Nigerian banks are allowed to charge their customers a “negotiable” N1 per mille. What this means is that banks can charge N1 per N1000 debit transactions on current accounts. Banks’ account maintenance charges come in the form of COT (i.e., Commission on Turnover) which is a charge levied on customer withdrawals by their banks. In Nigeria, these charges are mainly applicable to current accounts.

“Current Account Maintenance Fee (CAMF): Applicable to current accounts ONLY in respect of customer-induced debit transactions to third parties and debit transfers/lodgments to the customer’s account in another bank. Note that CAMF is not applicable to Savings Accounts,” said part of the CBN directive.

(READ THIS: You must know these terms if you want to own a bank account in Nigeria)

Deal book 300 x 250

Customers don’t like account maintenance charges

Interestingly, a lot of Nigerian bank customers are not keen on bank maintenance charges. After all, nobody likes to get debit alerts, especially so when such is coming from their banks. Perhaps, the main reason some customers dislike bank maintenance charges is because they tend to be higher than the interest capitalised entitled to such customers. Professor Ayobami Ojebode of the Department of  Communications and Language Arts, University of Ibadan, recently complained about this, saying:

“Dear bank, I see o! Don’t think I don’t see you! You credit me N50 interest on my savings and debit N150 for account maintenance & card fee etc! Come here, what do you really think you are doing?”

app

Patricia
Continue Reading