Business News
Shareholders raise alarm as GTBank and 6 other banks get N145m fine
Shareholders have unanimously lamented the huge fines slammed on seven lenders by regulatory authorities as the penalties for certain infractions during the 2018 business year.
Shareholders have unanimously lamented the huge fines slammed on seven lenders by regulatory authorities as the penalties for certain infractions during the 2018 business year.
Nairametrics understands that the banks, which include: GTBank, Access Bank, United Bank for Africa (UBA), FBN Holdings, Sterling Bank, Fidelity Bank, and Zenith International Bank, have all been mandated to pay a total of N145 million in fines to regulators for various offences.
The N145 million fines are to be paid to the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), the Financial Reporting Council of Nigeria (FRC), and the Corporate Affairs Commission (CAC).
More Details: As contained in the banks’ annual reports, FBN Holdings and its subsidiaries, First Bank of Nigeria, FBN Quest Merchant Bank, and FBN Insurance Limited, will pay the highest fine of N32.65 million to the CBN. This is followed by UBA followed which will pay N30 million.
Similarly, GTBank was fined N24 million, Access Bank was fined N20 million, Sterling Bank received N15.33 million fine, Fidelity Bank N13.01 million, and Zenith International Bank got N10 million, respectively.
Shareholders’ Stance: The shareholders under the auspices of New Dimension Shareholders Association, Shareholders Association of Nigeria, and Proactive Shareholders Association, are protesting against the fines.
According to them, the penalties imposed on the banks impacted negatively on their bottom-line, ultimately affected their dividend payout.
The shareholders argued that rather than impose such huge fines, the regulators should meet with the banks’ management to determine other penalising strategies.
The President of New Dimension Shareholders Association, Patrick Ajudua, said the fines did not just affect the dividend payment but also had a negative effect on the shareholders’ fund.
“We are not against payment of fines as it is a measure of correcting financial/governance breaches, but such must be done with human face. This means that the staff that committed the offence should be penalised. If this is done, it would forestall further violations and serve as a deterrent to others.”
Meanwhile, the President of Proactive Shareholders Association, Boniface Okezie said:
“No doubt, it is affecting the shareholders’ dividend; it is really unfortunate. The regulators can work out other ways of punishing banks that contravene the law.”
Similarly, the President, Shareholders Association of Nigeria, Ibadan Zone, Eric Akinduro said;
“The question to ask is whether the penalty is part of the budget provision, if yes? It is ok, but if no, then the officer responsible for such an offence must be held accountable for the negligence.
“This is why shareholders should continue to put the board and management on their toes. If the game is played by the rules, there will not be any reason for contravention.”
Energy
Nigeria imported over 55% of cooking gas consumed in October 2020
55.47% of cooking gas consumed by Nigerians in October 2020 was imported, according to a recent report by the PPPRA.
Nigeria imported 55.47% of cooking gas, known as Liquefied Petroleum Gas (LPG), consumed in October 2020, with the remaining 44.53% sourced and supplied locally.
This is according to the monthly LPG supply data, provided by the Petroleum Products Pricing Regulatory Agency (PPPRA). The data confirmed steady growth in the import of LPG, compared with the previous month (19.6%) and the corresponding period of 2019 (13.2%).
- Data released by the PPPRA indicated that the total quantity of LPG both imported and sourced locally in October 2020 was 123.27 thousand Metric Tonnes in Vacuum (MT (Vac)).
- Out of this, 68.37 thousand MT (Vac) was imported, and 54.90 thousand MT (Vac) was sourced locally.
(READ MORE: EndSARS: A day by day timeline of the protest that has brought Nigeria to its knees)
- Imports grew by 19.6% in October, compared with September and by 13.2% compared to the corresponding period of 2019.
- On the other hand, LPG sourced locally declined by 30.8%, compared with the previous month. However, it grew significantly by 219.3% compared with the corresponding period of 2019.
- NIPCO, with Port of Discharge at BOP, Apapa and PWA, Lagos, was the highest importer of the commodity into the country in October 2020, with 32.67 thousand MT (Vac) of LPG, representing 47.8% of the total import and 26.5% of total LPG supplied in the period under review.
- The other importers, according to the data, includes Matrix Energy, 12.46 thousand MT (Vac); Algasco LPG Services Limited, a subsidiary of Vitol, 13.82 thousand MT (Vac); Prudent, 5.63 thousand MT (Vac); and Hyson, 3.80 thousand MT (Vac).
- The origin of the imported LPG was the USA and Equatorial Guinea. The USA supplied 50.27 thousand MT (Vac), representing 73.5%, while Equatorial Guinea supplied 18.10 thousand MT (Vac), representing 26.5%. Imported LPG was discharged at BOP, Apapa; Matrix Jetty, Warri; PWA, Lagos, and Prudent Energy Jetty, Oghara.
(READ MORE: FG gives reasons for fuel subsidy removal, discloses alternative to kerosene)
- NIPCO was responsible for 26.42 thousand MT (Vac) of the total 54.90 thousand MT (Vac) sourced locally in October 2020; Algasco sourced 13.20 thousand MT (Vac); Stockgap Fuels Limited sourced 8.19 thousand MT (Vac), and Rainoil sourced 7.08 MT (Vac).
- The origin of the locally sourced LPG was NLNG, Bonny and BRT. NLNG supplied 47.82 thousand MT (Vac), representing 87.1%; while BRT supplied 7.08 thousand MT (Vac) representing 12.9%. Local LPG was discharged at PWA, Lagos; Rainoil Jetty, Lagos; Lister Jetty, Apapa; and Stockgap Jetty, Port Harcourt.
What this means
The 30.8% decline in local supply compared to the previous month is particularly worrying, considering the huge proven gas reserves in the country estimated at over 200 trillion cubic feet.
However, the 219.3% increase compared to the corresponding period in 2019 may mean that all is well. The 55.1% increase in locally sourced LPG from 35.40 thousand MT (Vac) in August to 54.90 thousand MT (Vac) in October 2020 appears to further confirm there may be no cause for alarm.
Notwithstanding the improvement, the country needs to make concerted efforts towards developing facilities and capabilities needed to improve local production of LPG, since it has abundant gas reserves.
What you should know
It may be argued that efforts are being made towards improving on what is currently obtainable. In this context, Nairametrics reported that the country has increased its LPG storage capacity to 69,968 Metric Tonnes. The latest addition being the 8,400 MT Tonnes capacity built by Techno Oil in Kirikiri, Lagos.
Coronavirus
COVID-19: AstraZeneca vaccine could be 90% effective against the virus
AstraZeneca has said that its vaccine being developed in collaboration with the University of Oxford could be 90% effective.
British pharmaceutical company, AstraZeneca, announced that the COVID-19 vaccine it is developing with Oxford University is 90% effective and also prevented 70% of trialists from falling ill.
This was disclosed by AstraZeneca on Monday and reported by Reuters and Bloomberg. AstraZeneca said its vaccine was 90% effective when a half dose was issued, followed by a full dose 30 days later.
AstraZeneca joins other major pharmaceutical companies including Pfizer and Moderna in the race to develop a vaccine for the pandemic.
What they are saying
Oxford University said it could be 70.4% effective and tests on two dose regimes show that it could be is 90%.
The company expects to have up to 200 million doses by the end of the year and produce up to 700 million doses by the first quarter of 2021.
The new vaccine also answers issues of vaccine storage and distribution, as it can be kept at basic refrigerator temperature for transport, making it much easier to transport, compared to Moderna and Pfizer’s vaccines.
What you should know
Nairametrics reported earlier this month that Pfizer Inc disclosed that its experimental vaccine, which is jointly developed with BioNTech was more than 90% effective in preventing COVID-19, based on initial data from a large study, in the ongoing phase 3 trials.
Last week, Pharmaceutical company, Moderna Inc, stated its COVID-19 vaccine is 94.5% effective in treating coronavirus, after preliminary analysis of a large late-stage clinical trial.
ENDSARS
#EndSARS: Insurance firms can seek refund after indemnifying victims – MD, NICON Insurance
NICON MD has stated that it is possible for the insurance firms to be compensated by the FG after victims have been indemnified.
The Managing Director and Chief Executive Officer (CEO) of NICON Insurance Limited, Mr. Muhammadu Bagudu Hussaini, has advised Insurance firms to maximize certain provisions in the constitution that guarantees their refund after compensating victims of the recent #EndSARS protest, opining that it is possible for the insurance firms to be compensated by the Federal Government of Nigeria.
He made the disclosure during an interview with the Daily Trust, where he decried the high level of losses encountered during the protest and the imminent high claims on insurance firms, which if care is not taken, might affect liquidity in the system.
Mr. Hussaini stated that the government has the machinery to pay the insurance companies without recourse to treasury, but he was quick to point out that it is a dormant machinery.
What they are saying
Elucidating his points, Mr. Hussaini said: “There will be a large volume of claims which the insurance industry would have to pay. I have no doubt about the capacity of the insurance industry to meet its obligations on claims that may arise from the destruction across the country.
“However, two issues would arise because the context of the claims are huge and would come in at the same time. There will be no spread, thus this will impact the finances of the underwriters and may destabilize their finances.
“What happened was as a result of breakdown of law and order. Section 14 (2b) of the Nigerian Constitution vests the duty of guaranteeing security and providing for the welfare of the citizens in the hands of government – the executive precisely. I will look at the damages from the protest as a failure of the government to provide security and welfare for the citizens.
“The section says the security and welfare of the people shall be the primary purpose of government. Thus, insurance companies have a subrogation right – the right to recover from the government their funds after they pay the claims arising from the destruction.
“Therefore, I advise the insurance companies to pay their claims and seek refund on the basis of Section 14 (2b) of the Constitution of the Federal Republic of Nigeria.”
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Godwin Ede
May 21, 2019 at 6:21 pm
I think the regulators should tread cautiously. The issue of fines n penalties paid should be the last resort. Banks n Insurance companies should avoid such infractions.Officers whose responsibility is to prepare such schedule should be alive to their responsibility. Any officer found wanting should face the consequences n such fines recovered from his salary.