The Central Bank of Nigeria (CBN) has reportedly given a directive to commercial banks for the immediate suspension of interests on the N777 billion non-performing loans to oil marketers.
Sources disclosed that the move by the CBN was informed by the worsening portfolio of non-performing loans to oil marketers in the country. According to the report, the failure of the Federal Government to pay fuel subsidy to oil marketers has worsened non-performing loans (NPLs) in recent times.
Further details: Confirming the development, the Managing Director of SunTrust Bank Limited, Ayo Babatunde disclosed that there was a 100% suspension of income on the oil marketers’ loans by banks. Babatunde reportedly said this while speaking at a seminar organised by the Money Market Workgroup of Financial Market Dealers Association (FMDA) in Lagos.
- According to the director, CBN might have taken the action to ensure that banks did not report paper profits on NPLs.
- Meanwhile, Babatunde further raised concern over the CBN policy, mandating banks to lend 60% of their deposits by September 30. He revealed that the move might push some of them to increase lending to high risk-borrowers, with the potential of incurring heavy losses.
“The guideline directing banks to improve lending to the real sector and maintain a minimum loan to deposit ratio (LDR) of 60% (compared to the sector’s LDR of 58.5% as at May and a regulatory maximum of 80%), is subject to quarterly review.
Failure to meet the minimum LDR of 60% by the specified date will result in a levy of additional Cash Reserve Requirement (CRR) equal to 50% of the lending shortfall of the target.
We need to clarify whether earlier exposure to the preferred sectors can be aggregated for the LDR computation and likely forbearance to banks with high NPLs to the preferred sectors, such as SMEs, retail, mortgage, and consumer lending.”
Why CBN is worried: A look into the NPLs data as released by the National Bureau of Statistics shows that the total NPLs stood N1.69 trillion as of April 2019. Considering the total gross loans of N15.4 trillion, it means that non-performing loans constitute 10.83% of total gross loans.
- The breakdown shows that as of April ending, Nigeria’s oil and gas sector accounted for over 60%. Specifically, the NPLs accrued to Nigeria’s oil and gas sector was estimated at N777.84 billion.
- A closer look at the data reveals that the non-performing loans in the oil sector declined by 93.3 billion as at the end of April 2019.
- Nairametrics had earlier reported that contractors and investors in the sector had largely depended on bank loans to manage their operations, with many defaulting to pay up.
Key Takeaways: The directive from the CBN to freeze all the interests banks get from the non-performing loans offered to oil markers means NPLs are now a big source of concern to the economy.
- The CBN may be planning to clamp down on banks that have shady deals surrounding the issue of the non-performing loan which has continued to linger.
- This is a move by the CBN to consolidate its move to redirect loan facilities to the real sector.
- Also, this may be a coordinated move to stop accumulated interests, and clamp down on the debtors to recover loans for the banks.
- While it remains unknown if the new policy will affect loans granted to other sectors, banks may lose returns on interests which may run into billions.
Fidelity Bank appoints Chike-Obi as Board Chairman
This announcement was contained in a notice signed by the Company Secretary.
Fidelity Bank has announced the appointment of Mustafa Chike-Obi as Chairman of the Board of Directors. The appointment has been approved by the Central Bank of Nigeria, and will take effect on August 14, 2020, after the expiration of the tenure of the current Chairman, Mr Ernest Ebi.
This announcement was contained in a notice signed by the Company Secretary, Ezinwa Unuigboje, and sent to the Nigerian Stock Exchange.
Also in the notice, the bank announced the retirement of Mr Seni Adetu, who served as Independent Non-Executive Director on the board. He stepped down from the board after completing his tenure on June 30, 2020.
The board of directors and the management of the bank appreciated Ernest Ebi and Seni Adetu for their contributions to the progress of the bank during their tenures.
“Under the chairmanship of Mr Ernest Ebi, the bank recorded significant growth across key financial metrics, with both Messers Ebi and Adetu playing significant roles, complementing management efforts in the delivery of these milestones; in service of the long-term vision of the bank. The banks market share position has also been materially strengthened over the period,” the notice read.
The appointment is in line with the bank’s high governance standards and best practices, and in compliance with internal succession policies; Mr Ebi will, over the next six weeks, ensure a successful transition and smooth handover to Chike-Obi.
Mustafa Chike-Obi has over 40 years’ experience in investment banking and the financial services sector, working with reputable global investment banking and asset Management firms. He is currently with the Alpha African Advisory, where he provides leadership and oversees the capital-raising division.
He was the inaugural CEO of the Asset Management Corporation of Nigeria (AMCON), from where he joined Alpha African Advisory.
He was also founding president at Madison Advisors, a financial services advisory and consulting firm in New Jersey, where he specialised in hedge funds and private equity investment advice.
He holds a bachelor’s degree in Mathematics from the University of Lagos, and an MBA from Stanford University Graduate School of Business.
Nigerian Content Intervention Fund increased to US$350 million
The fund expansion was one of the decisions taken at the board’s recent meeting.
The governing council of the Nigerian Content Development and Monitoring Board (NCMB) announced on Sunday that it has approved a $150 million expansion of the Nigerian Content Intervention Fund, raising it from $200 million to $350 million.
Nigerian Content Intervention Fund Increased to US$350M
The Governing Council of the Nigerian Content Development and Monitoring Board (NCDMB) has approved the expansion of the Nigerian Content Intervention Fund from US$200 million to US$350 million.@NigeriaGov pic.twitter.com/Y0TtDzwALq
— NCDMB (@OfficialNCDMB) July 5, 2020
The fund expansion was one of the decisions taken at the board’s recent meeting on June 16, 2020, chaired by Minister of State for Petroleum Resources, H.E. Chief Timipre Sylva, who is also the Chairman of the Council.
The board said that $100 million from the additional fund would be used to boost five existing loan products, which include manufacturing in the oil and gas industry, asset acquisition of rigs, marine vessels, contract financing for Nigerian oil service providers, contract financing for oil and gas community contractors, and loan refinancing with Nigerian banks.
The council also announced that $20 million and $30 million would be used for 2 newly developed loan product types (the Intervention Fund for Women in Oil & Gas and PETAN Products) which include Working Capital loans and Capacity Building loans for PETAN member companies.
Started in 2017, the Nigerian content Intervention fund was developed as a $200 Million fund managed by the Bank of Industry, to facilitate on-lending to qualified stakeholders in the Nigerian oil and gas industry on five loan product types.
The NCI Fund is a portion of the Nigerian Content Development Fund (NCDF), aggregated from the one percent deduction from the value of contracts executed in the upstream sector of the oil and gas industry.
According to the NCMB, “About 94 percent of the NCI Funds has been disbursed to 27 beneficiaries as at May 2020.”
COVID-19 Update in Nigeria
On the 5th of July 2020, 544 new confirmed cases and 11 deaths were recorded in Nigeria bringing the total confirmed cases recorded in the country to 28,711.
The spread of novel Corona Virus Disease (COVID-19) in Nigeria touched a new milestone as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 28,711 confirmed cases.
On the 5th of July 2020, 544 new confirmed cases and 11 deaths were recorded in Nigeria, having carried out a total daily test of 2,933 samples across the country.
To date, 28,711 cases have been confirmed, 11,665 cases have been discharged and 645 deaths have been recorded in 35 states and the Federal Capital Territory. A total of 151,121 tests have been carried out as of July 5th, 2020 compared to 148,188 tests a day earlier.
COVID-19 Case Updates- 5th July 2020
- Total Number of Cases – 28,711
- Total Number Discharged – 11,665
- Total Deaths – 645
- Total Tests Carried out – 151,121
According to the NCDC, the 544 new cases were reported from 19 states- Lagos (199), Ebonyi (65),Oyo (47), Ondo (46), Ogun (31), Edo (30), FCT (28), Katsina (25), Plateau (15), Bayelsa (11), Kaduna (10), Adamawa (10), Akwa Ibom (8), Gombe (7), Kano (4), Taraba (3), Rivers (2), Abia (2), Ekiti (1).
Meanwhile, the latest numbers bring Lagos state total confirmed cases to 11,244, followed by Abuja (2,181), Oyo (1,513), Edo (1,383), Kano (1,268), Delta (1,227) Rivers (1,183), Ogun (1,005), Kaduna (865), Katsina (604), Borno (528), Gombe (520), Bauchi (516), Ebonyi (503), Ondo (456), Plateau (436), Abia (385), Enugu (372), Imo (352), Jigawa (318).
Kwara state has recorded 269 cases, Bayelsa (245), Nasarawa (225), Osun (165), Sokoto (153), Niger (122), Akwa Ibom (112), Adamawa (99), Benue (97), Kebbi (84), Zamfara (76), Anambra (73), Yobe (61), Ekiti (44), Taraba (22), while Kogi state has recorded 5 cases.
Lock Down and Curfew
In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.
The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.
On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020.
|Date||Confirmed case||New cases||Total deaths||New deaths||Total recovery||Active cases||Critical cases|
|July 5, 2020||28711||544||645||11||11665||16401||7|
|July 4, 2020||28167||603||634||6||11462||16071||7|
|July 3, 2020||27564||454||628||12||11069||15867||7|
|July 2, 2020||27110||626||616||13||10801||15693||7|
|July 1, 2020||26484||790||603||13||10152||15729||7|
|June 30, 2020||25694||561||590||17||9746||15358||7|
|June 29, 2020||25133||566||573||8||9402||15158||7|
|June 28, 2020||24867||490||565||7||9007||14995||7|
|June 27, 2020||24077||779||558||4||8625||14894||7|
|June 26, 2020||23298||684||554||5||8253||14491||7|
|June 25, 2020||22614||594||549||7||7822||14243||7|
|June 24, 2020||22020||649||542||9||7613||13865||7|
|June 23, 2020||21371||452||533||8||7338||13500||7|
|June 22, 2020||20919||675||525||7||7109||13285||7|
|June 21, 2020||20242||436||518||12||6879||12847||7|
|June 20, 2020||19808||661||506||19||6718||12584||7|
|June 19, 2020||19147||667||487||12||6581||12079||7|
|June 18, 2020||18480||745||475||6||6307||11698||7|
|June 17, 2020||17735||587||469||14||5967||11299||7|
|June 16, 2020||17148||490||455||31||5623||11070||7|
|June 15, 2020||16658||573||424||4||5349||10885||7|
|June 14, 2020||16085||403||420||13||5220||10445||7|
|June 13, 2020||15682||501||407||8||5101||10174||7|
|June 12, 2020||15181||627||399||12||4891||9891||7|
|June 11, 2020||14554||681||387||5||4494||9673||7|
|June 10, 2020||13873||409||382||17||4351||9140||7|
|June 9, 2020||13464||663||365||4||4206||8893||7|
|June 8, 2020||12801||315||361||7||4040||8400||7|
|June 7, 2020||12486||260||354||12||3959||8173||7|
|June 6, 2020||12233||389||342||9||3826||8065||7|
|June 5, 2020||11844||328||333||10||3696||7815||7|
|June 4, 2020||11516||350||323||8||3535||7646||7|
|June 3, 2020||11166||348||315||1||3329||7522||7|
|June 2, 2020||10819||241||314||15||3239||7266||7|
|June 1, 2020||10578||416||299||12||3122||7157||9|
|May 31, 2020||10162||307||287||14||3007||6868||7|
|May 30, 2020||9855||553||273||12||2856||6726||7|
|May 29, 2020||9302||387||261||2||2697||6344||7|
|May 28, 2020||8915||182||259||5||2592||6064||7|
|May 27, 2020||8733||389||254||5||2501||5978||7|
|May 26, 2020||8344||276||249||16||2385||5710||7|
|May 25, 2020||8068||229||233||7||2311||5524||7|
|May 24, 2020||7839||313||226||5||2263||5360||7|
|May 23, 2020||7526||265||221||0||2174||5131||7|
|May 22, 2020||7261||245||221||10||2007||5033||7|
|May 21, 2020||7016||339||211||11||1907||4898||7|
|May 20, 2020||6677||284||200||8||1840||4637||7|
|May 19, 2020||6401||226||192||1||1734||4475||7|
|May 18, 2020||6175||216||191||9||1644||4340||7|
|May 17, 2020||5959||388||182||6||1594||4183||7|
|May 16, 2020||5621||176||176||5||1472||3973||7|
|May 15, 2020||5445||288||171||3||1320||3954||4|
|May 14, 2020||5162||193||168||3||1180||3815||4|
|May 13, 2020||4971||184||164||6||1070||3737||4|
|May 12, 2020||4787||146||158||6||959||3670||4|
|May 11, 2020||4641||242||152||10||902||3589||4|
|May 10, 2020||4399||248||142||17||778||3479||4|
|May 9, 2020||4151||239||127||11||745||3278||4|
|May 8, 2020||3912||386||118||10||679||3115||4|
|May 7, 2020||3526||381||108||4||601||2818||4|
|May 6, 2020||3145||195||104||5||534||2507||1|
|May 5, 2020||2950||148||99||5||481||2370||4|
|May 4, 2020||2802||245||94||6||417||2291||2|
|May 3, 2020||2558||170||88||2||400||2070||2|
|May 2, 2020||2388||220||86||17||351||1952||2|
|May 1, 2020||2170||238||69||10||351||1751||2|
|April 30, 2020||1932||204||59||7||317||1556||2|
|April 29, 2020||1728||196||52||7||307||1369||2|
|April 28, 2020||1532||195||45||4||255||1232||2|
|April 27, 2020||1337||64||41||0||255||994||2|
|April 26, 2020||1273||91||41||5||239||994||2|
|April 25, 2020||1182||87||36||3||222||925||2|
|April 24, 2020||1095||114||33||1||208||855||2|
|April 23, 2020||981||108||32||3||197||753||2|
|April 22, 2020||873||91||29||3||197||648||2|
|April 21, 2020||782||117||26||3||197||560||2|
|April 20, 2020||665||38||23||1||188||466||2|
|April 19, 2020||627||86||22||2||170||436||2|
|April 18, 2020||541||48||20||2||166||356||2|
|April 17, 2020||493||51||18||4||159||317||2|
|April 16, 2020||442||35||13||1||152||277||2|
|April 15, 2020||407||34||12||1||128||267||2|
|April 14, 2020||373||30||11||1||99||263||2|
|April 13, 2020||343||20||10||0||91||242||2|
|April 12, 2020||323||5||10||0||85||228||2|
|April 11, 2020||318||13||10||3||70||238||2|
|April 10, 2020||305||17||7||0||58||240||2|
|April 9, 2020||288||14||7||1||51||230||2|
|April 8, 2020||274||22||6||0||44||226||2|
|April 7, 2020||254||16||6||1||44||204||2|
|April 6, 2020||238||6||5||0||35||198||2|
|April 5, 2020||232||18||5||1||33||194||2|
|April 4, 2020||214||5||4||0||25||185||0|
|April 3, 2020||209||25||4||2||25||180||0|
|April 2, 2020||184||10||2||0||20||162||0|
|April 1, 2020||174||35||2||0||9||163||0|
|March 31, 2020||139||8||2||0||9||128||0|
|March 30, 2020||131||20||2||1||8||121||0|
|March 29, 2020||111||22||1||0||3||107||0|
|March 28, 2020||89||19||1||0||3||85||0|
|March 27, 2020||70||5||1||0||3||66||0|
|March 26, 2020||65||14||1||0||2||62||0|
|March 25, 2020||51||7||1||0||2||48||0|
|March 24, 2020||44||4||1||0||2||41||0|
|March 23, 2020||40||10||1||1||2||37||0|
|March 22, 2020||30||8||0||0||2||28||0|
|March 21, 2020||22||10||0||0||1||21||0|
|March 20, 2020||12||4||0||0||1||11||0|
|March 19, 2020||8||0||0||0||1||7||0|
|March 18, 2020||8||5||0||0||1||7||0|
|March 17, 2020||3||1||0||0||0||3||0|
|March 16, 2020||2||0||0||0||0||2||0|
|March 15, 2020||2||0||0||0||0||2||0|
|March 14, 2020||2||0||0||0||0||2||0|
|March 13, 2020||2||0||0||0||0||2||0|
|March 12, 2020||2||0||0||0||0||2||0|
|March 11, 2020||2||0||0||0||0||2||0|
|March 10, 2020||2||0||0||0||0||2||0|
|March 9, 2020||2||1||0||0||0||2||0|
|March 8, 2020||1||0||0||0||0||1||0|
|March 7, 2020||1||0||0||0||0||1||0|
|March 6, 2020||1||0||0||0||0||1||0|
|March 5, 2020||1||0||0||0||0||1||0|
|March 4, 2020||1||0||0||0||0||1||0|
|March 3, 2020||1||0||0||0||0||1||0|
|March 2, 2020||1||0||0||0||0||1||0|
|March 1, 2020||1||0||0||0||0||1||0|
|February 29, 2020||1||0||0||0||0||1||0|
|February 28, 2020||1||1||0||0||0||1||0|