Friday, 12 February 2021

The Securities and Exchange Commission (SEC) has joined the Central Bank of Nigeria (CBN) to ban crypto trading.

SEC has stopped admittance of affected persons into its Regulatory Incubation Framework for Fintech firms.

In a statement on Thursday, SEC said it received inquiries on a perceived policy conflict between its September 11 statement on Digital Assets, Classification and Treatment and the February 5 CBN circular.

The commission stressed that there were no contradictions or inconsistencies.

It clarified that last year’s statement was to provide regulatory certainty within the digital asset space, due to the growing volume of reported flows.

SEC said as the regulator of the banking system, the CBN has identified certain risks that threaten investors’ protection.

The commission disclosed that it engaged with the CBN and agreed to work together to further analyse and better understand the risks.

“For the purpose of admittance into the SEC Regulatory Incubation Framework, the assessment of all persons (and products) affected by the CBN Circular of February 5, 2021, is hereby put on hold until such persons are able to operate bank accounts within the Nigerian banking system”, it announced.

It said planned implementation of the Regulatory Incubation Guidelines for FinTech firms who intend to introduce innovative models for offering capital market products and services will continue.

SEC added that it would keep monitoring developments in the digital asset space to create a regulatory structure that enhances economic development and promotes a safe and transparent capital market.

Published in Bank & Finance

Air Namibia has announced the cancellation of all its operations, effective February 11, as the country’s government is poised to announce its flag carrier's voluntary liquidation.

In a late-night notice on social media, the 75-year-old airline announced that all its aircraft would be grounded. Its reservations system was suspended with no new bookings being accepted from February 11, 2021. Passengers have been advised to register claims for refunds.

Air Namibia spokesperson Twaku Kayofa told ch-aviation the government was expected to make an announcement on to explain its decision.

Kayofa confirmed that trade union representatives had informed the company’s 636 employees on February 10 that they would receive an ex gratia pay-out equal to 12 months of salary, but no benefits.

The government, the airline’s executive, and unions are to meet on Thursday to discuss the liquidation's finer details. Cabinet has already approved the voluntary liquidation of the airline with a three-person board of directors now appointed to prevent the airline’s assets from being attached in case of failure to pay creditor Challengair its first instalment next week.

According to the Namibian Sun newspaper, the board includes lawyer Norman Tjombe, businesswoman Hilda Basson-Namundjebo, and economist James Cumming who will collectively assist interim CEO Theo Mberirua in running the company.

The decision to shutter the 75-year-old carrier follows the airline’s board's resignation on February 3, after the government did not oppose an application in the Namibian High Court to have the airline liquidated. The application was made by the estate of former Belgian operator Challengair over outstanding payments on legacy debt of 1998 concerning the lease of a B767-300(ER). Lawyers representing both parties reached an 11th-hour out-of-court settlement on January 28 for EUR9.9 million (USD11.9 million), but without the government's apparent support, who said it could not afford to bail out the airline, nor had it managed to find it a strategic equity partner. The first installment of EUR5 million (USD6 million) on the settlement was due on February 18. Kayofa told ch-aviation Challengair would join the list of creditors following liquidation.

Finance Minister Ipumbu Shiimi earlier said a turnaround plan for the cash-stricken flag carrier would cost taxpayers significantly more than NAD7 billion Namibian dollars (USD461.6 million), after already spending NAD8.4 billion (USD554 million) in the past 10 years to bail out the airline. He said Air Namibia had been loss-making since its inception, plagued by a flawed business model that rendered 15 out of its 19 routes unprofitable. A combination of the types of aircraft, routes, high employee numbers, and other structural inefficiencies had contributed to the financial distress of the company.

At the time of its collapse, Air Namibia's fleet entailed four A319-100s (of which two are owned and two are leased from Deucalion Aviation Funds), two A330-200s (both leased from Castlelake), four EMB-135ERs (financially leased from HOP! (A5, Paris Orly) but unencumbered since October 2020), and one inactive B737-500 (owned). The Namibian government has been in contact with the lessors, Kayofa said.

 

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Published in Travel & Tourism

Faced with a host of challenges like the prevailing economic uncertainties, leading global banks recorded a significant decline in brand value.

According to data researched by Trading Platforms UK, the top ten global banks cumulatively lost $23.01 billion in brand value in 2020. The banks recorded a total brand value of $98.12 billion, representing a drop of 18.99% compared to 2019’s $121.13 billion figure.

HSBC had the highest brand value in 2020 at $18.74 billion, a drop of 19% from 20219’s $23.6 billion. JP Morgan’s brand value of $17.64 billion was the second-highest, representing a drop of 11% from 2019’s $19.82 billion. Citi ranked third in brand value at $15.66 billion, a decline of 17% from the $18.87 billion worth recorded in 2019. Barclays had the tenth highest value at $4.62 billion, a drop of 19% from 2019’s $4.62 billion figure.

The analysis also shows that HSBC was the biggest loser in brand value by $4.42 billion, followed by Citi at $3.21 billion. Elsewhere, Barclays ranks tenth after losing its brand value by $1.05 billion.

Top Banks Cumulative Value

Top Banks Raw Data Cumulative Value

Banks’ brand value impacted by a loss in revenue streams

The decline in the brand value for the highlighted banks emanated mainly from the challenging economic times resulting from the coronavirus pandemic. The banks saw some of the revenue avenues slow down. The facilities faced lower non-interest revenues, as there was less demand for their different services. Furthermore, the number of borrowers was also limited with banks’ anticipated consumer loan defaults considering that most people were rendered jobless.

Away from the pandemic, the banking sector was also facing uncertainties of the trade war between the United States and China. However, the tension had less impact compared to the pandemic. The stress resulting from the U.S. presidential election and the Brexit situation also complicated matters for the banking sector.

Impact of challenger banks

The challenger banks’ evolution of last year has also sliced a share of the leading traditional banks’ brand value. The pandemic ushered in a new era where most consumers turned to digital facilities for regular banking products as lockdown measures prohibited movement. Some of the traditional banks that did not have sufficient digital banking infrastructure faced the heat from fintech facilities.

Overall, the crisis strengthened the competitive pressures among banking institutions by accelerating the shift towards digitalization of financial service providers. Some of the traditional banks heavily invested in digital services, enabling them to compete with fintech and other banks. At the same time, some of the traditional banks showed intentions to acquire existing challenger banks.

Generally, the brand value is enhanced mainly through the ability to deliver better customer service, a key offering of the challenger banks. The digital shift opened up more opportunities to meet customers’ needs. The brand value drop could have been worse, considering that some banks had initiated their digital transformation before the pandemic.

It is worth noting that Chinese facilities did not feature on the top list as the banks from the region faced few challenges encountered by counterparts in North America and Europe. The country’s ability to suppress the pandemic early offered the perfect opportunity for banks to embark on recovery.

Published in World
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