Connect with us
nairametrics

Companies

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.

Published

on

Godwin Emefiele, 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.

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.

GTBank 728 x 90

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.

Deal book 300 x 250
Coronation ads

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:

“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.”

Jaiz bank ads

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

Stanbic IBTC

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.

Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs. He initially joined Nairametrics as an all-round Business Analyst, but later began focusing on and covering the financial services sector. He has also held various leadership roles, including Senior Editor, QAQC Lead, and Deputy Managing Editor. Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan. If you have a scoop for him, you may contact him via his email- [email protected] You may also contact him through various social media platforms, preferably LinkedIn and Twitter.

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 .

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Companies

Unilever announces the completion of its Group legal structure

Unilever PLC has announced the completion of the unification of its Group legal structure

Published

on

Unilever Overseas increases stake in Unilever Nigeria Plc

Unilever, the parent company of Unilever Nigeria Plc, has announced the completion of the unification of its Group legal structure under a single parent company, Unilever Plc.

According to the press release issued by the company, from today, 30th November 2020 and for the first time in its history, Unilever now trades with one market capitalisation, one class of shares, and one global pool of liquidity, whilst also maintaining the Group’s listings on the Amsterdam, London, and New York stock exchanges.

What they are saying

Nils Andersen, Chairman of Unilever, said: “This is an important day for Unilever and we would like to thank our shareholders for their strong support of our Unification proposals, which gives us greater flexibility for strategic portfolio change, remove complexity, and further improve governance.

There will be no change to the operations, locations, activities or staffing levels in either the Netherlands or the United Kingdom as a result of Unification. The headquarters of Unilever’s Foods & Refreshment Division will continue to be based in Rotterdam and the Home Care and Beauty & Personal Care Divisions will continue to be headquartered in the United Kingdom.”

What to expect

This development has no impact on the going concern of Unilever Nigeria Plc, the shareholding structure, as well as the free float shares of the company on NSE, which totals 1,491,985,247 — representing 25.97% of the ordinary shares of the company issued and fully paid for by investors.

GTBank 728 x 90

(READ MORE: Q1 2020 Unaudited Report: Unilever Nigeria records N13.3 billion revenue) 

However, upon the completion of the unification of the Group’s Legal Structure, Unilever overseas under this structure remains in control of the 74.03% ordinary shares of the Nigerian subsidiary.

What you should know

  • For investors on the London Stock Exchange, Euronext Amsterdam, and the New York Stock Exchange, dealings in new Unilever Plc shares commenced today, as the new Unilever Plc shares will be admitted to the Premium Listing segment of the Official List of the UK Financial Conduct Authority (“FCA”) and to trading on the London Stock Exchange’s Main Market for listed securities, with the ticker “ULVR”.
  • Unilever Plc shares will also be admitted to listing and to trading on Euronext in Amsterdam under the ticker “UNA” today. It is expected that Unilever Plc ADSs will be admitted to trading on the New York Stock Exchange this afternoon.
  • Following the issue and allotment of 1,460,713,122 new Unilever Plc shares pursuant to Unification, which represent 55.56% of the total number of Plc shares, Unilever Plc’s total issued ordinary share capital today consists of 2,629,243,772 ordinary shares of 3 1/9 pence each.
  • As part of Unification, Unilever NV ceased to exist yesterday, 29 November 2020, which means there has been no dealings and there will be no further dealings in any Unilever NV securities (including Unilever NV shares on Euronext in Amsterdam).

Deal book 300 x 250
Coronation ads
Continue Reading

Companies

Flour Mills GMD purchased additional shares worth N209.29 million in 3 days

Paul Miyonmide Gbedebo acquired 7,486,719 additional shares of Flour Mills, worth ₦209.3 million in 3 days.

Published

on

Flour Mill's profit after tax increases by 16.44% in H1 2019  

The Group Managing Director of Flour Mills Nigeria Plc (FMN), Paul Miyonmide Gbededo, purchased a total of 7,486,719 additional shares of the company, worth ₦209.29 million.

According to the notifications issued between 17th and 19th of November by the company’s Secretary, Mr Joseph Umolu, the GMD purchased the ordinary shares of Flour Mills Nigeria in this order:

  • On 17th November, 1,949,839 additional shares worth N54.59 million, at a price of N28.00 per share.
  • On 18th November, 4,200,852 additional shares worth N117.62 million, at a price of N28.00 per share.
  • On 19th November, 1,336,028 additional shares worth N37.07 million, at a price of N27.75 per share.

(READ MORE: Nestlé S.A buys shares of its Nigerian subsidiary worth ₦463.46 million in a week)

This brings the total number of shares of Flour Mills Nigeria Plc purchased by the GMD to 7,486,719. The total consideration for these shares is put at N209.29 million.

What you should know

GTBank 728 x 90

In line with the information contained in the financial statements of the company, as of 30th September 2020, Mr. Gbedebo had a direct shareholding of 2,720,109 shares.

Hence, with the 7,486,719 additional units acquired, his total shareholding now stands at 10,206,828 shares, which is worth N285.79 million at the current share price of N28.00.

What this means

Deal book 300 x 250
Coronation ads

The purchase of the shares of Flour Mills Nigeria Plc further cements Mr. Paul Gbedebo’s position as one of its majority shareholders.

Continue Reading

Companies

ValuAlliance distributes value fund of N10 per unit for H1, 2020

ValuAlliance Value Fund has declared the distribution to unit holders, the sum of N10.00/unit for the financial year ended June 30, 2020. 

Published

on

ValuAlliance distributes value fund of N10 per unit for H1, 2020

ValuAlliance Value Fund (“Value Fund” or the “Fund”), formerly called the SIM Capital Alliance Value Fund, has declared the distribution to unit holders, the sum of N10.00/unit for the financial year ended June 30, 2020.

This is according to a notification by the firm, sent to the Nigerian Stock Exchange market and seen by Nairametrics.

The latest distribution indicates a decline of N1/unit when compared to its distribution in the corresponding period last year.

READ MORE: SEC reinstates DEAP Capital’s Board

The key highlights of the recent notification include:

GTBank 728 x 90
  • Annual General Meeting Date: 21st December 2020
  • AGM Venue: 33A Alfred Rewane (Kingsway) Road, Ikoyi, Lagos, Nigeria
  • Proposed Distribution: ₦10/unit
  • Qualification Date: 9th December 2020
  • Closure of Register Date: 10th December 2020
  • Payment Date: 23rd December 2020

READ: Exxon Mobil to cut 14,000 jobs as pandemic hit oil demand, prices

What you should know

  • The Value Fund is a closed-end Fund registered and regulated by the Securities and Exchange Commission (SEC), whose units are listed on the main board of the NSE.
  • The Value Fund for the year ended June 30, 2020 achieved a growth of 2.83% Year-on-Year, with a cumulative return of 125.32% since inception, which translates to a 9-year Internal Rate of Return (IRR) of 12.06%.

Explore Data on the Nairametrics Research Website

Deal book 300 x 250
Coronation ads

Continue Reading