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COVID-19: Why banks would rather donate billions to FG than credit their customers’ accounts

Prior to when an Italian national brought in Nigeria’s first COVID-19 case in late February, many Nigerians perceived the contagious virus as a “white man” disease.

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CBN expands scope of regional banks in Nigeria, gives compliance timeframe

Prior to when an Italian national brought in Nigeria’s first COVID-19 case in late February, many Nigerians perceived the contagious virus as a “white man” disease. Little did they know that barely one month later, most parts of the country would be under lockdown in a bid to contain the virus from spreading. Also, a lot of people did not envisage that the outbreak would come with severe economic consequences.

Fast-forward to present times and Nigeria is really struggling to contain the spread of the virus. The adverse economic impacts have also been grave. As part of efforts to assist the Federal Government to combat the virus, some of Nigeria’s biggest companies, and most notable business executives decided to donate money. They have donated a total of N25.8 billion as of April 17th, 2020.

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Disgruntled Nigerians want their own donations

Nigerian banks have been particularly instrumental in this regard, having contributed a significant portion of the money. And while the government is very grateful to them, some of their customers are quite displeased. These customers cannot understand why the banks would rather donate to the government instead of crediting their bank accounts directly.

(READ FURTHER: Essential steps companies and employees must take now to survive COVID-19)

To be fair, bank customers have a good reason to be upset. In Nigeria, everyone has been adversely affected by the Coronavirus pandemic. Some people have even lost their jobs, with no immediate hope of getting replacements. Therefore, everyone needs some financial relief which hasn’t been forthcoming, unfortunately. So, it is very understandable for bank customers to expect some money transferred into their accounts by their banks. After all, the banks already have their customers’ account details and could easily send money across to them.

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A Social Media backlash against banks

The banks’ “inability” to offer financial assistance to their customers have generated quite a lot of backlash on social media. Some customers even resorted to name-calling, describing the banks as insensitive to the plight of average citizens. They also wondered what the Federal Government is going to do with the billions that have been donated by the companies, even as some other people simply dismissed the donations as a hoax or “audio money.”

But there’s a good reason why donations are going to the FG

For most Nigerian companies, providing financial support to the ongoing fight against Coronavirus is probably the best Corporate Social Responsibility (CSR) initiative to undertake at this point. This is because not only does such a move position these companies as socially-responsible corporates, it also entitles them to some form of tax exceptions. Even Nigeria’s Minister of Finance, Budget, and National Planning, Zainab Ahmed, confirmed this in a recent interview with Arise TV.

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READ ALSO: Top Nigerian billionaires and their contributions to the fight against COVID-19

Therefore, with CSR expenses being tax-deductible, the best bet for these banks is to donate Covid-19 relief funds directly to the Federal Government so they can better account for the expenses. It may be difficult for banks to get tax deductions if they just transfer money to their customers. While commenting on this, a Relationship Manager at Zenith Bank Plc who doesn’t want to be named, said the following to Nairametrics:

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“Donating the money through the CBN is simply the most coordinated approach I can imagine. That way, it is easier for banks and other companies to account for how much they have spent on Covid-19 related CSR.

“Moreover, it could be problematic for banks to transfer money into their customers’ accounts because even though these banks have their customers’ account details, they may not really be able to target such donations at people who really need them. Just imagine that a customer has only N5,000 in his Zenith Bank account but has over N5 million in a different account with another bank. If you decide to transfer N20,000 to his Zenith Bank account based on the assumption that he is broke, he would end up shortening how much people who are actually broke would end up getting.”

READ MORE: FG takes over Yola DisCo, investors to get N26.9 billion refund  

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Meanwhile, companies are sharing relief materials

It should also be noted that many companies have made efforts to provide relief materials directly to the Nigerians who need them. As a matter of fact, some of the banks that have already donated big money to the Federal Government have also procured and shared relief materials to the people. Examples of them are Wema Bank Plc, Zenith Bank Plc, and, many more. Nairametrics also recently reported that Eko Electricity Distribution Company and the Ibadan Electricity Distribution Company have distributed food and relief items worth millions of naira to residents of Oyo and Lagos states.

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Patricia

Emmanuel covers the financial services sector for Nairametrics. Do you have a scoop for him? Well then, contact him via his email- [email protected]

17 Comments

17 Comments

  1. I'm ola

    April 20, 2020 at 1:38 pm

    Nonsense talk of greed that’s why the country cannot progress, a rich country with the poorest people. Why not use bvn hence we all did bvn linking? Give F.G some part of the donation and credit your customers account with what’s left or vice versa. The weighing balance should be balanced. Without customers there is no bank. You need your FG even much more your customers. Shame!!!

    • Ernie

      April 23, 2020 at 3:25 pm

      Shame indeed, why is bvn in use then, if someone is having 5k in another and 5m in another, won’t the 5m bank know put a call to the other bank act of his to know? Meanwhile there’s bvn that link all the acts. Mr Zenith bank man if you don’t know what to say pls keep quiet… We re hungry FG and Banks

  2. Obiajulu

    April 20, 2020 at 1:42 pm

    Why most Nigerians are against giving money FG is because there’s no cordinated approach from the government. And most times is being misappropriated

    • Fashanu

      April 21, 2020 at 6:14 am

      U bankers are foolish, government would squander d money, d impact tour customers at this point of need is very essential

  3. IBRAHIM

    April 20, 2020 at 2:10 pm

    pls mr emmanue i need your help sir any amount dat you can avoid for me and MY family to buy food stuff dis MY account IBRAHIM Abolore o ACC 0170251513 gtbank

  4. anonymous

    April 20, 2020 at 6:54 pm

    “To be fair, bank customers have a good reason to be upset. In Nigeria, everyone has been adversely affected by the Coronavirus pandemic. Some people have even lost their jobs, with no immediate hope of getting replacements. Therefore, everyone needs some financial relief which hasn’t been forthcoming, unfortunately. So, it is very understandable for bank customers to expect some money transferred into their accounts by their banks. After all, the banks already have their customers’ account details and could easily send money across to them”.

    These paragraph reeks of entitlement, why assume that the banks aren’t finding business difficult too? who knows, they might even be forced to cut their staff strength?

  5. Concerned citizen

    April 20, 2020 at 10:32 pm

    Corona virus is surely going to devastate Nigeria. This is because while the government think they are fighting the virus, they are not really doing anything to contain the spread which is occasioned by people coming out because of hunger. Thank God it is not only the poor man’s disease. Even the same irresponsive government officials have started dying of the disease. I pitty all of you!

  6. Oke

    April 21, 2020 at 12:56 am

    Nonsense..stupid excuses n unreasonable. Can’t believe professionals n learned men in the so called banking industry are saying this shit. Nigeria what has this country turn into,will Nigeria ever become better… I s a shame I am a Nigerian

  7. Afuye

    April 21, 2020 at 9:23 am

    The BVN should have been used then. All banks should transfer to the CBN and then the CBN should send money directly to the beneficiary using their BVN. Since all accounts an individual has is expected to have a single bvn

  8. Anonymous

    April 21, 2020 at 12:06 pm

    I am very surprised that a loan i collected from bank prior to the lockdown was instantly withdrawn as i transferred money
    to the account.

  9. Kabiru Adamu

    April 24, 2020 at 12:05 am

    Just sent our money to us because we are in difficult situation .

  10. Kabiru Adamu

    April 24, 2020 at 12:07 am

    Just sent our money to us because we are in difficult situation .

  11. Vincent Miguel

    April 24, 2020 at 12:50 am

    Well at first they never care and it never their concerns, they prefer we the citizen to die instead of surviving.
    They kno what they doing, after all they are the money themselves why would they transferred money to customers

  12. Kingsley Dilioha. A

    April 28, 2020 at 8:28 am

    Please, use the BVN. As it unifies account together.

  13. Kingsley Dilioha

    April 28, 2020 at 8:30 am

    Please, use the BVN. As it unifies account together.

  14. Gabriel

    May 14, 2020 at 6:23 pm

    Pls is there any sign that government is really fighting covid _19 till date? Is there reduction in the spread or the rate of the infected persons is growing rapidly I think that zenith bank manager is foolish enough to cite that example of someone having 5000 naira in zenith bank account and have 5milion in other Bank account….I think you people make it compulsory for everyone to have BVN which you said it link all our other Banks account together,How long we you continue to fool us ?you cooperate scammer that call your self Banks you charge and deduct our money massively you dump us coperately imagine I have not been using ATM for long but every time my bank charge me 52naira twice in a month for maintenance, sometime I withdraw from counter they still charge me so many untitled charge just to mention few,your directors and government are birds of same feather that flock together….I’m not surprised to read that news from one of you .

  15. Gabriel

    May 14, 2020 at 6:24 pm

    Pls is there any sign that government is really fighting covid _19 till date? Is there reduction in the spread or the rate of the infected persons is growing rapidly I think that zenith bank manager is foolish enough to cite that example of someone having 5000 naira in zenith bank account and have 5milion in other Bank account….I think you people make it compulsory for everyone to have BVN which you said it link all our other Banks account together,How long we you continue to fool us ?you cooperate scammer that call your self Banks you charge and deduct our money massively you dump us coperately imagine I have not been using ATM for long but every time my bank charge me 52naira twice in a month for maintenance, sometime I withdraw from counter they still charge me so many untitled charge just to mention few,your directors and government are birds of same feather that flock together….I’m not surprised to read that news from one of you .

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Companies

Lafarge Africa Plc. announces its board meeting and closed period for Q2 2020 

The notification which was duly signed by General Counsel & Company Secretary.

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Lafarge Africa

Lafarge Africa Plc. notified the Nigerian Stock Exchange and the investing public that he closed period will commence on Wednesday, 8th July 2020 until the unaudited financial statement for the second quarter ended 30th June 2020, is released to the Nigerian Stock Exchange. 

In a disclosure on the Nigerian Stock Exchange, it wrote: “We hereby notify the Nigerian Stock Exchange and the investing public that a meeting of the Board of Directors of Lafarge Africa Plc has been scheduled to hold on Thursday, 23rd July 2020 to consider the second quarter financial results of the Company for the quarter ended 30th June 2020.”  

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The notification which was duly signed by General Counsel & Company Secretary, Mrs. Adewunmi Alode explained further stating that “Accordingly, no Director, employee, persons discharging managerial responsibility and Advisers of the Company and their connected persons may directly or indirectly deal in the shares of the Company in any manner during the closed period.” 

Over the past few months, it made a few board changes with the retirement of two of its Non-Executive Directors, as well as the appointment of three new DirectorsIt had also spun off its South African subsidiary, Lafarge South Africa Holdings (LSAH), last year. 

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READ MORE: NSE’s statement in reaction to the Visionscape Municipality Bond Default

Lafarge Africa’s Q1 2020 revenue was up 9.8% year-on-year to N63.7 billion, driven by higher Cement Sales (a figure up 11% year-on-year to N62.3 billion) which offset the weakness in Aggregate and Concrete (down 21% y/y to N1.4bn). Its EBITDA grew by 2.4% year-on-year to N19.3 billion as well. As at Tuesday the 7th of July, the share price of the company was N10.00 

 

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Companies

AXA Mansard Insurance Plc gives notice of Annual General Meeting 

The AGM will be live-streamed to enable shareholders and stakeholders participate.

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AXA Mansard Insurance Plc

Insurance firm, AXA Mansard Insurance Plc., has given notice of its board of its Annual General Meeting (AGM) scheduled for Wednesday, July 29, 2020, at 10:00 a.m.  

The announcement which was disclosed by Nigerian Stock Exchange (NSE) in a corporate disclosure on July 7th, 2020 and signed by Company Secretary, Omowunmi Mabel Adewusi read, “Notice is hereby given that the twenty-eighth annual general meeting of AXA Mansard Insurance Plc. will hold at the Oriental Hotel, no. 3, Lekki Road, Victoria Island, Lagos on Wednesday, July 29, 2020, at 10:00 a.m.” 

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READ ALSO: AXA Mansard divests from its pension and real estate ventures

As noted, the purpose of the AGM is to transact the following business: 

  1. To receive the Audited Financial Statements for the year ended December 31, 2019, and the Reports of the Directors, Auditors and Statutory Audit Committee thereon 
  2. To authorise Directors to fix the remuneration of the Auditors 
  3. To elect Directors and 
  4. To elect members of the Statutory Audit Committee.  

In order to ensure that all relevant stakeholders can be a part of the AGM, the company will also be streaming the AGM live. It noted that “This will enable shareholders and other stakeholders who will not be attending physically to follow the proceedings.” 

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The link for the live streaming of the Meeting will be made available on the Company’s website at www.axamansard.com. 

READ MORE: Sterling Bank’s earnings to remain pressured but valuations still attractive

Recall that a few months ago, in March, the company’s Board of Directors announced the appointment of John Dickson as the company’s new Non-Executive Director. A month earlier, it also disclosed its plan to sell its pension management subsidiary (AXA Mansard Pensions Ltd) and some undisclosed real estate investments. 

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Its unaudited financials for the period Q1 2020 reveal a growth across revenue and profit lines. Gross written premium grew by 21% from N17.4 billion earned in Q1 2019 to N21 billion in Q1 2020. Profit for the year for the group grew by a commendable 120% from N890 million in Q1 2019 to N1.9 billion in Q1 2020. 

As at Tuesday, the 7th of July when markets closed, the share price of the company was N1.59. The company’s EPS stood at 0.33 while its price to book ratio stood at 0.6082. 

 

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Companies

NSITF board to investigate suspended MD and others over financial misconduct

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NSITF, FG moves to scrap hazard allowances earned by State Governors

The board of directors of the Nigerian Social Insurance Trust Fund (NSITF) has revealed that it will investigate the activities of the suspended Managing Director, 3 Executive Directors, and 8 other senior management staff over financial breaches and gross misconduct.

This was disclosed by the Chairman of the board of NSITF, Mr. Austin Enajemo-Isire, in a statement in Enugu on Sunday July 5, 2020.

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Enajemo-Isire said that the Managing Director and other top management staff of the organization would have the opportunity to clear themselves of any wrongdoing with the probe panel which was being set up.

READ MORE: Ecobank appoints Aissatou Djiba Diallo to oversee its fintech initiatives 

While reacting to claims that the suspension did not follow due process as President Muhammadu Buhari did not approve it, Enajemo-Isire said that the approval for the suspension of the affected staff had been conveyed to the Labour Minister in a correspondence referenced SGF. 47/511/T/99 of June 30, 2020.

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According to the Chairman, “The minister has conveyed this approval and directives to me for necessary action in terms of setting up a board-driven investigative panel.

READ MORE: Nigeria’s debt rises to $79.5 billion, as debt to revenue ratio worsens

“This is to give the affected officers the opportunity to clear themselves of the financial and procurement breaches and acts of gross misconduct and other infractions that gave rise to their prima facie indictment.

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“It is in this light that I have decided to call a virtual meeting of the management board on Tuesday, July 7, 2020, to consider the modalities for our action.”

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He, therefore, appealed to staffers of NSITF and their social partners to keep calm and exercise restraint.

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A few days ago, Nairametrics reported the suspension of the Managing Director and some senior management staff over corruption allegations. However, the management in its reaction debunked that claim and said that the President did not approve their suspension but that rather, it was the sole decision of the Labour Minister, Chris Ngige, who they said was overreaching himself.

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