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CBN says commercial banks can invest in Treasury Bills for now

The Central Bank of Nigeria [@cenbank] has dismissed reports that it has finally barred commercial banks from investing in treasury bills so there could be more liquid to give out loans to the real sectors of the economy.

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Treasury Bills, CBN acts tough again, gives banks 72 hours ultimatum to resolve customers’ complaints, CBN, NECA calls for CBN

The Central Bank of Nigeria (CBN) has dismissed reports that it has finally barred commercial banks from investing in Treasury Bills.

A top official of the CBN reportedly revealed that although the apex bank would be eager to see commercial banks participate less in the primary market Treasury Bills auction, this can only take effect when the Central Bank issues an official circular to that effect.

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The back story: A section of the media reported last week that CBN prevented commercial banks from buying Treasury Bills for their own accounts at an open market auction held on Thursday, July 18, 2019.

This has generated reactions, as the CBN had earlier hinted at its plan to provide a mechanism that would limit banks from accessing government securities so as to redirect banks’ lending focus to the private sector.

  • The CBN recently gave new directives to the commercial banks to maintain a minimum loan-to-deposit ratio of about 60%, with the aim of encouraging SME, retail, mortgage and consumer lending in the economy.
  • In a bid to end banks’ reluctance to lend to the real sectors, the Central Bank directed that banks’ daily deposits placement through the CBN’s Standing Deposit Facility (SDF), shall no longer exceed N2 billion. 

[READ: Why CBN disallowed banks from investing in bonds]

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CBN dismisses claims: Though it was revealed in a recent circular that the CBN would fully execute the plan to see banks focus more of their funds to MSMEs in Nigeria, the source revealed that no decision had been made to stop banks from patronising government Treasury Bills and bonds.

“We want the banks to focus more on lending and not buying government securities.  But we are not trying to force them to do so, because we have our Prudential Guidelines that they must comply with. What we are doing is like a signal, we are showing them the direction we want them to go.

“We have not barred the banks from investing in Treasury Bills, otherwise, we would have released a circular to that effect. But we did what we did, first to let the market know that our interest would be for non-proprietary transactions.

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“That is, investors, both local and foreign, can buy our instruments. But we would like to see less of the banks coming to use their instruments to come to the primary market to buy Treasury Bills.

“However, banks and any other person can do secondary market transactions. That does not mean that banks have been barred from the treasury bills market. The CBN will use its discretion to see whether it is a general auction or a special auction that the banks can participate in.”

The bottom line: Specifically, in an attempt to drive the real sector of the economy, the CBN has been advancing its move to make credit facilities available to the sector.

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Meanwhile, following the report of dismissal by the CBN, it means commercial banks can still leverage on investment in Treasury Bills and bonds while the CBN unveils its final strategies regarding bank participation in buying government bonds and Treasury Bills.

[READ: Experts differ on possible rates cut as CBN holds MPC meeting]

Patricia

Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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Coronavirus

FCMB shuts contact centre locations due to COVID-19 scare

Other banks have recently had to shut down their branches due to public health concerns caused by COVID-19.

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FCMB contact centre

First City Monument Bank (FCMB) Limited informed its customers, yesterday, that its contact centre locations have all been temporarily shut down following COVID-19 scare.

A brief statement that was issued via Twitter emphasised that the general shutdown of the physical locations is only a temporary and precautionary measure aimed at preventing further spread of the contagious virus. The statement, however, did not clarify whether there have been any reported cases of infection at these contact centre locations.

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“Dear Customers, we trust you are doing well and staying safe. We would like to inform you about the temporary closure of one of our Contact Centre locations as a precautionary measure to curtail the spread of COVID-19 and protect our employees,” part of the statement said.

Meanwhile, customers were informed that FCMB’s contact centres will remain active in the meantime, albeit virtually. However, customers may experience delays prior to being attended to. Customers were also advised to explore the self-help options offered by the bank’s electronic banking channels in order to resolve their challenges.

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Nairametrics understands that some of the bank’s customers have been experiencing some ‘not so great’ customer service over the past few weeks. One of these customers, who chose not to be named, confirmed this to Nairametrics. Reacting to the statement by the bank, the customer said:

“This statement explains why the bank has not been responding to complaints across all its channels. For at least 4 weeks now, they don’t respond to emails, WhatsApp messages or DMs. I have some funds that they have not reversed in like 4 weeks now. If you check Twitter, you will see so many similar complaints.”

Recall that some other banks have had to close down their branches due to the same reason given by FCMB. Just recently, Jaiz Bank Plc shut down its Ikeja branch for disinfection. Weeks before that, Wema Bank also confirmed that two of its branches were temporarily shut down after two staff became infected with the virus.

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Corporate Press Releases

NSE Masks for All Nigerians Campaign receives boost from private sector

The Exchange will distribute 100,000 face masks through different cities in Nigeria.

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CEO NSE, NSE lifts suspension on Omatek Ventures’ shares, NSE launches Comic Book to boost financial literacy, NSE goes public with 2.5 billion ordinary shares in unanimous vote by the members, NSE commemorates 2020 International Women’s Day and rings the bell for gender equality, COVID-19: NSE extends time for submission of financial statements, NSE PUBLISHES GUIDANCE TO FACILITATE EFFECTIVE VIRTUAL MEETINGS FOR STAKEHOLDERS AMIDST COVID-19, NSE Hosts First-Ever Digital Closing Gong Ceremony

The rapid rise in confirmed cases of Coronavirus (COVID-19) in Nigeria demands more collective, decisive, coordinated and inclusive action in the fight against the virus. Now is the time for government, private sector and well-meaning individuals to come together to flatten the curve.

In light of this, The Nigerian Stock Exchange (NSE or The Exchange) on Monday, 06 July 2020, redeemed its pledge of Sixty Million Naira to the Capital Market Support Committee for COVID-19 (CMSCC) with the donation of ambulance and Twenty Million, Seven Hundred Thousand Naira cash to the committee. The CMSCC is a Securities and Exchange Commission (SEC) led initiative set up to stimulate the capital market ecosystem to play an active role in curbing the spread of COVID-19 in Nigeria. The donation was received by the Chairman, CMSCC, Mr. Ariyo Olushekun and the Director, Lagos Zonal Office, SEC, Mr. Steven Falomo.

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In furtherance of its commitment to support the fight against the virus, The Exchange launched the Masks For All Nigerians campaign with the aim to galvanize responsible corporate citizens and individuals to donate 400 million face masks to Nigerians, especially low-income households. The NSE kicked off the campaign with an anchor donation of 100,000 face masks that are being distributed in areas where it has operations and areas that are greatly affected by COVID-19.

READ MORE: NSE upgrades data portal to improve access to the market

As part of the Masks For All Nigerians campaign, The Exchange executed a nationwide awareness campaign on social media and radio to educate Nigerians on the need to wear face masks, practice social distancing and maintain good hygiene. The NSE also involved its Good Cause Ambassador, Innocent ‘TuFace’ Idibia, to amplify the need for Nigerians to wear and donate face masks via www.masksforallng.com, as well as adhere to the guidelines put in place to keep our communities safe. As part of its Employee Giveback Programme, members of staff are also donating 500 masks per week to Nigerians.

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Speaking on the initiative, the Chief Executive Officer, NSE, Mr. Oscar N. Onyema, OON said, “We are facing an unprecedented crisis that requires us to adopt a more collaborative approach in fighting this pandemic especially as economic activity and social interactions resume. As we work to encourage the use of reusable face masks and adherence to other safety guidelines, we call on responsible corporate citizens and well-meaning individuals to support this initiative by wearing a mask when in public settings and donating masks especially to those at the bottom of the pyramid so as to protect lives.”

READ ALSO: IFC supports Nigeria’s FCMB to finance SMEs facing COVID-19 related challenge

In response to the call, several private sector players have sprung to action bringing the total number of masks donated under the Masks for All Nigerians campaign to 216,300. Opay was the first to partner with a donation of 100,000 face masks to Lagos State University Teaching Hospital on Thursday, 4 June 2020. Also, Morbod Group donated 13,000 masks to residents of Lagos and South-Eastern part of Nigeria. The two most recent donors are Babalakin & Co Legal Practitioners and AIICO Insurance who donated 1,300 non-medical face masks to the Ikoyi Custodial Centre, Nigerian Correctional Service and 2,000 non-medical face masks to the Nigerian Red Cross Society, Lagos State Branch, respectively. AIICO Insurance has also made a commitment to donate another 7,000 face masks.

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READ ALSO: Ministry of Health approves COVID-19 protocols for aviation sector, as airports prepare to resume

In fulfilling its commitment to donate 100,000 face masks, The Exchange will distribute 33,000 face masks in Lagos; 7,000 in Oyo; 5,000 in Ogun; 5,500 in Anambra; 5,500 in Rivers; 3,800 in Edo; 14,500 in Abuja; 18,000 in Kano; 3,900 in Borno; 3,800 in Kaduna; and 10,000 to capital market stakeholders.

The Exchange has displayed remarkable resilience during this pandemic and continues to support the fight against COVID-19 in line with the strategic pillars of its Corporate Sustainability and Responsibility (CSR) strategy – community, workplace, marketplace and environment. The Masks For All Nigerians campaign and the attendant mask donation will provide immense support to the Government in reaching communities who have hitherto been left vulnerable. The Exchange also continues to sustain market activity through remote working and trading; promote market deepening activities; create an enabling regulatory environment for stakeholders; and recognise the efforts of public and private sector players in raising awareness, ramping up testing and increasing the capacity of the health sector to slow the spread of COVID-19.

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Appointments

AfDB appoints new acting Vice President as Jennifer Blanke steps down

Wambui who joined the AfDB in 2018 currently supervises the Bank’s water sector program.

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The African Development Bank (AfDB) Group has announced the appointment of Wambui Gichuri as Acting Vice President- Agriculture, Human and Social Development, with effect from 5 July 2020.

This follows the resignation of the erstwhile Vice President of Agriculture, Human and Social Development, Dr Jennifer Blanke, about 4 weeks ago.

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This was disclosed by the bank in a press statement on July 4, 2020.

Wambui who joined the African Development Bank Group in 2018 as Director, Water Development and Sanitation, currently supervises the Bank’s water sector program of over $ 4.5 billion covering 44 countries and multinational projects.

Wambui has a supervisory role over two divisions, namely the Water Development, Coordination and Partnerships, and Water Security and Sanitation divisions, as well as the African Water Facility divisions, a project preparation facility.  She also leads the development and coordination of the technical program, manages the department’s human resources and budget, and the development of extensive partnership activities. Her leadership role includes water sector policy dialogue, strategy and business development, and spearheading innovations.

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READ MORE: Adesina Probe: US Treasury Secretary praises AFDB’s decision on independent review

Before joining the African Development Bank, she worked for the World Bank where she served in various capacities for twenty years, including 17 years in water resources management, supply, sanitation, irrigation and drainage, with vast experience in Africa, Latin America and the Caribbean.

Wamgui holds a Master’s Degree in Economics from the University of Nairobi, Kenya (1988); a Bachelor of Philosophy degree in Economics (1986) and a Bachelor’s degree in Economics and Sociology from (1983) from the same university.

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The President of the African Development Bank Group, Akinwumi Adesina, expressed his delight in having Wamgui in that role due to her wealth of experience and leadership skills

Adesina said, “I am very pleased that Wambui agreed to step into this role as Acting Vice President. The Vice Presidency Complex on Agriculture, Human and Social Development has some of our largest programs and flagship initiatives. With her extensive experience, leadership, people management skills, and strong execution capacity, I am confident that she will help strengthen the team and accelerate execution on critical programs and initiatives”.

Nairametrics had reported that the former vice president for Agriculture, Human and Social Development, Jennifer Blanke, stepped down from her role with effect from July 4, 2020, on purely family reasons, she said that she intends to rejoin her family in Switzerland after a very fulfilling time at the bank.

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