One day after the Central Bank of Nigeria (CBN) heavily “penalized” some banks in the country for disobeying a directive requiring them to lend to the real sector of the economy, top executives of the affected lenders have met with the apex to demand a review of the sanctions.
According to sources familiar with the development, the bank chiefs were gathered in Abuja, yesterday, at the CBN headquarters where they met with top CBN officials. They demanded an immediate review of the penalty stemming from their claim that the CBN failed to stick with an earlier announced deadline before it can take effect.
The CBN acted faster than usual: In their argument, the aggrieved bank chiefs said that the CBN had earlier given September 30th as the deadline for compliance by all Nigerian lenders. Interestingly, the apex bank did not even wait for September to end before imposing the penalty on September 26th.
As Nairametrics reported, the CBN deducted a total of N499.1 billion, from their accounts with the CBN. The affected banks include:
- Zenith Bank Plc (N135,629,337,625);
- Citibank Nigeria Limited (N100,743,055, 321);
- United Bank for Africa Plc (UBA) (N99,676,181,916);
- First Bank of Nigeria Limited (N74,668,880,480);
- Standard Chartered Bank Limited (N30,027,137,984);
- Guaranty Trust Bank Plc (N25, 147, 933, 628);
- First City Monument Bank (N14, 371,064, 742);
- FBNQuest Merchant Bank Limited (N2, 697,456,144);
- Jaiz Bank Plc (N7, 525, 165,552);
- Keystone Bank Limited (N4, 162, 938, 879);
- Rand Merchant Bank Limited (N2, 823,177,399); and
- SunTrust Bank (N1,703,205,427).
Prior to this time: The Central Bank of Nigeria did publicize the directive in early July, much to the dislike of many banks. According to the directive, banks must meet and maintain a minimum loan to deposit ratio of 60% by September 2019 or risk being debited. It was also noted that the ratio would be periodically reviewed on a quarterly basis.
A dilemma for banks: Recall that the CBN issued the directive in a bid to discourage banks from merely investing in risk-free securities when they should be lending to the real sector and stimulating economic activities in the process. In other words, the directive is aimed at facilitating easier access to funds for businesses. Nigerian banks are mostly sceptical of lending to the real sector, out of fear of loan losses which ultimately impact negatively on their performances.
In the meantime, the banks apparently do not have a choice than to increase their lending. Agreed, it can be argued that the CBN ought to have waited until the deadline before imposing the penalty. But then again, how much difference does five days really make! Moreover, why were the banks waiting until September 30th to adhere to the directive when they had the whole of July, August, and September?
NB: This article has been amended to correct the wrong impression that the banks were fined. The banks were not fined.
Multiverse forecasts N39.5 million profit in Q1 2021
The management of Multiverse Plc has projected a revenue of N76 million and a profit of N39.5 million in Q1 2021.
Multiverse Mining and Exploration Plc has projected that in the first quarter of 2021, the mining and exploration company will generate N76 million in revenue, and post a profit of N39.5 million.
These projections were made by the company in a recent earnings forecast issued by the Management, and signed by the Corporate Secretaries of the company.
Key highlights of the earnings forecast for Q1 2021
- Total revenue is projected at N76 million.
- Turnover from agency sale is projected at N1 million.
- Agency cost is s projected at N850 thousand.
- Total expenses are projected at N7.8 million.
- Operating Profit is projected at N67.3 million.
- EBIT (Earnings Before Interest and Taxation) is projected at N67.3 million.
- Interest Expense is projected at N27.8 million.
- Profit after tax is projected at N39.5 million.
Key assumptions made to support the earnings forecast and projection of the company
The earnings forecast was made on the ground that there won’t be any significant change in the economic policies of the Federal Government, while the monetary policies of the CBN would not be altered significantly.
The company also maintained that there would not be any industrial unrest that would affect its production and sales volume, while the profit of the company would not be pressured by rising costs of inputs, as prices of materials used in production shall be stable in the period under review.
GCR affirms Dangote Cement issuer ratings of AA+(NG) and A1+(NG)
Global Credit Ratings has affirmed Dangote Cement issuer ratings of AA+(NG) and A1+(NG).
Dangote Cement Plc has announced that Global Credit Ratings has affirmed the cement manufacturer a long-term and short-term national scale issuer ratings of AA+ (NG) and A1+(NG) respectively.
According to the press release issued by the company, the rating which maintains a stable outlook on Dangote Cement would expire by November 2021.
In line with this, GCR reviewed existing bonds of the company and assigned the N100bn Series 1 Fixed Rate Bond of Dangote Cement a rating of AA+.
Why this matters
- The ratings reflect Dangote Cement Plc’s status as Africa’s leading integrated cement manufacturer with a group-wide installed capacity of 45.6 million metric tonnes per annum across ten countries.
- The stable outlook which was maintained by GCR reflects the extensive distribution network, significant scale economies and position as the largest corporations on the Nigerian Stock Exchange, with sound access to capital.
- It is important to note that a rebound is expected within 18-24 months, on the back of strong base domestic demand.
What they are saying
Michel Puchercos, Chief Executive Officer, said:
- “Dangote Cement has shown great resilience in 2020 despite the COVID-19 pandemic and a challenging environment. The Group continues to report strong cash generation while maintaining strong financial discipline. As Africa’s leading cement producer, we are committed to maximizing shareholder value creation.”
Governor Sanwo-Olu says 24,000 students yet to resume in public schools
24,000 students in public schools are yet to return back after the reopening of schools, according to Governor Sanwo-Olu.
The Lagos State Governor, Babajide Sanwo-Olu, has revealed that about 24,000 students in public schools are yet to come back after the reopening of schools following last year’s lockdown necessitated by the first wave of Covid-19 across the country.
This is as the governor said that resumption of school activities Monday, January 20, 2021, was a difficult decision to make in light of the second wave of Covid-19.
This disclosure was made by the governor while peaking during a press conference on Covid-19 update at the Lagos House, Ikeja on Tuesday.
Sanwo-Olu assured that it was the best decision for the children’s safety and long-term development, especially the most vulnerable ones.
What the Lagos State Governor is saying
Sanwo-Olu in his statement said, “Last year after the first lockdown and kids have to come back to school, we are still looking for about 24,000 of them that have not come back to school. So, there is a challenge if you keep them out for that long and their parents or guardians now turn them to other things instead of ensuring that they have time to come back for learning even if it is twice or thrice a week.
“At least they have been registered since the beginning of a session and they can be monitored. If not, they will just be roaming the streets and become endangered. We have seen incidents of child abuse and all unprintable things that are being done to these children. So, we believe to a large extent that schools sometimes happen to be the safe haven for them. We have done the roster in which we ensure they keep social distance and we are monitoring,” he said.
What you should know
- It can be recalled that public and private schools below the tertiary level in Lagos State, On Monday, January 18, 2021, reopened for academic activities despite opposition from some stakeholders due to the second wave of coronavirus pandemic in the state.
- Following the surge in the number of infections in the state, which is the epicentre of the disease in the country, there were complaints about the state of preparedness of the schools, especially the public ones, in adhering to the strict Covid-19 protocols and guidelines.