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Nigeria Tier-2 financial institution, Diamond Bank Plc. has denied media reports that it was in talks with new investors to raise fresh capital for the company.
 
It was reported that the funds, which were to be injected by foreign intersperse, were part of the measures to recapitalise the bank as its asset value had been eroded by increased non-performing loans and high operational cost.
 
Recall that the mid-tier bank had on Thursday said the Chairman of its board, Oluseyi Bickerseth, and three other directors resigned “with immediate effect for varied personal reasons.”
 
Although, the lender did not clearly state why they resigned, but it was gathered the four key members of its board were asked to step down to make room for new management for easy capital raising.
 
The management of the bank made this known on Friday in a notice sent to the Nigerian Stock Exchange (NSE).
 
“Diamond Bank is not in talks with any party, global or otherwise, for any capital injection.
 
“While previous communication from the bank has highlighted a need to shore up the bank’s capital adequacy ratio (CAR), the preferred option is an internal capital management programme,” the bank said in a statement on Friday.
 
Meanwhile, the announcement appeared not to have gone down well with its shareholders as the bank’s shares closed at N1.44 per share on Friday after it fell by 3.36 percent, the biggest drop in over six weeks.
 
Ripples Nigeria reports that the stock had been on bullish trend since last Monday to reach N1.49 per share on Thursday, their highest level in four (4) months.
 
Besides, Diamond Bank’s earnings results for nine months ended September 30, 2018 showed a worsening financial state of the company, just as its gross earnings for the review period dropped to N142.5 billion from N143.7 billion a year earlier.
 
A further analysis revealed that the company’s profit before tax fell from N4.8 billion to N3.1 billion, while the post-tax profit declined from N3.9 billion to N1.7 billion in the period under review when compared to the same period in 2017.
 
Owing to this terrible performance, the Diamond Bank’s Earnings Per Share (EPS) dropped by 59 percent to 7 kobo.
 
 
Source: The Ripples
The Nigerian Federal Account Allocation Committee (FAAC) has disbursed a total of N689.71 billion to the federal, state and local governments as revenue allocation for the month of September.
 
The amount, which was distributed in the monthly FAAC meeting in Abuja on Thursday, is N51.13 billion lower than N741.84 shared among the three tiers of government in August despite increase in oil export sales.
 
Finance Minister Zainab Ahmed, who presided the meeting, stressed the need for the governments to save for the rainy day.
 
“In view of the situation of the economy at the moment it is important to restate the need for governments at all levels to maintain transparency and instil a saving culture for the rainy day. We have to save, not only saving for today, but for tomorrow,” the minister said.
 
In a communique by FAAC Technical Sub-Committee at the end of its meeting held on Wednesday and signed by the Accountant-General of the Federation, Ahmed Idris, gross statutory revenue for the month was N569.281 billion, indicating N57.858 billion when compared to N627.139 billion shared in August.
 
Details of the disbursement from the document showed that crude oil export sales increased by 0.17 million barrels, resulting in increased revenue of $8.48 million to the federation.
 
However, the average unit price dropped from $77.10 per barrel to $75.69 per barrel in the review month.
 
The document noted that shutdown of pipelines in the Niger Delta during the month resulted in shut in of production at various pipelines.
 
The details further revealed revenue from Royalties increased significantly while Value Added Tax (VAT), Petroleum Profit Tax (PPT) and Companies Income Tax (CIT) decreased significantly.
 
A breakdown of the figures for the month of September showed that the gross revenue available from the VAT was N79.154 billion as against N114.542 billion distributed in the preceding month, resulting in a decrease of N35.388 billion.
 
According to the document, the federal government received about N277.197 billion, the state and local governments got about N172.810 billion and 130.534 billion respectively, while the nine oil producing states received about N52.596 billion as 13 percent derivation.
 
The Federal Inland Revenue Service (FIRS) got about N15.572 billion as cost of collection/transfer.
 
Meanwhile, the report of the committee on the Excess Crude Account (ECA) was stepped down and withdrawn to enable the committee to rework and represent it at the next meeting.
 
 
Source: Vanguard
The shares of Diamond Bank trading on the floor of the Nigerian Stock Exchange (NSE) rose to their highest level in four (4) months on Thursday after the bank’s key board members resigned.
 
The stock, which joined the biggest gainers and extended its bullish trend into the fourth trading session today after records of bearishness last week, rose by 7.19 percent to close at N1.49 per share, the highest level since June 25, 2018.
 
The bank announced the resignation of the Chairman of its board, Oluseyi Bickerseth, and three other directors of the bank in a notice sent to NSE and signed by its Secretary and Legal Adviser, Uzoma Uja, on Thursday.
 
The three other directors of the bank include Rotimi Oyekanmi, Mrs. Juliet Anammah and Mrs. Aisha Oyebode.
 
“We wish to notify the Nigerian Stock Exchange (NSE) and the public that the following Non-Executive Directors have resigned from the Board of Diamond Bank Plc with immediate effect.”
 
“The directors are resigning for varied personal reasons, which will include focusing on their priorities. Diamond Bank will update the market with any further development in due course,” the notice read.
 
The financial institution had in July appointed Bickerseth as the Chairman of its Board of Directors. Bickerseth took over from Prof. Chris Ogbechie who retired on March 31, 2018 after completion of his tenure.
 
Diamond Bank is faced with serious liquidity challenge as a result of rising non-performing loans and high operational cost.
 
In 2017, the bank recorded its first loss in six years as it embarked on sale of assets to manage its capital.
 
An analysis of its earnings results for the year ended 30 June 2018 showed that the company post-tax earnings fell from N8.02 billion in the period ended June 2017 to N1.80 billion when compared with the corresponding period in 2018.
 
The stock is expected to rise further in the short term on strengthening investors’ confidence ahead of new capital injection.
 
The bank, which was incorporated on December 20, 1990, commenced its operation in 1991 as a private limited liability company, but in 2005, the bank got listed publicly on the NSE.
 
Meanwhile, the NSE key market indicator, the All-Share Index (ASI), rebounded by 44 basis points to 32,545.06 points after yesterday’s negative performance.
 
The positive performance was triggered by bargain hunting in highly capitalised stocks like Nigerian Breweries, Dangote Cement and Nestle Nigeria.
 
In view of this, investors gained N51.6 billion as market capitalisation of all traded equities rose to N11.9 trillion, while the year-to-date return improved to -14.9 percent.
 
 
Source: The Ripples
The Central Bank of Nigeria (CBN) has again revoked the operating licenses of nine (9) microfinance banks in Niger State, the National Association of Microfinance Banks (MFBs).
 
The North Central Secretary of the association, Tsado Daniel, who made this known while speaking at the commissioning of the Federal Polytechnic Bida Microfinance Bank, said the banks were part of the 34 MFBs in the state before the CBN’s action.
 
Although, Daniel did not mention the names of the affected MFBs, he simply said “these micro-finance banks lost their licences because they fell short during the regulation exercise carried out by the CBN.’’
 
According to him, the non-adherence to corporate governance contributed to the collapse of the banks, urging the management and staff members of the new and existing banks “to adhere strictly to the rule of the game.”
 
“Banks do not die, people kill them; please do not kill the Federal Polytechnic Bida Microfinance Bank,” Daniel counselled.
 
The CBN had recently declared its plans to revoke operating licenses of 182 financial institutions operating in the country.
 
The declaration came about a week after it revoked Skye Bank’s license over failure of its shareholders to recapitalise the bank.
 
CBN had said the 182 financial institutions in its watchlist, including 154 MFBs, cut across different states of the country.
 
Reacting, a representative of CBN in Minna, Hajia Hajara Mohammed, pointed out that insider abuse was a huge factor that contributed to the failure of MFBs across the country.
 
Mohammed urged beneficiaries of loan facilities from banks to stop diverting the money to marriage ceremonies or other unprofitable ventures.
 
Speaking earlier, the Rector of the polytechnic, Dr. Abubakar Dzukogi, said the MFB will kick off its operations with a capital base of N20 million with the aim of increasing it to N50 million by 2019
 
Dzukogi, who doubles as the Chairman, Board of Directors of the Federal Polytechnic Microfinance Bank, added that the effort would ensure students and staff perform banking transactions in a seamless manner, which according to him, is in line with the cashless policy of the CBN.
 
 
Source: The Ripples

The Nigerian Senate In Wednesday, passed a resolution calling on the Central Bank of Nigeria (CBN) to suspend the excessive ATM card maintenance charges being deducted from customers.

The resolution came as part of a motion on the illicit and excessive bank charges on customers accounts, sponsored by Senator Olugbenga Ashafa (Lagos East, APC).

The Senate also called on commercial banks operating in the country to configure their machines to dispense up to N40,000 per withdrawal pending the outcome of the investigation by the Senate committees tasked with investigating the excessive and illicit bank charges.

Speaking on the Motion, the President of the Senate, Dr. Abubakar Bukola Saraki said: “This is a motion that affects the lives of every Nigerian — irrespective of what part of the country you come from or whatever political affiliation you might have. This is why we are here: to always defend and protect the interests of the Nigerian people.”

The Senate President stated that the Senate must work to ensure that the resolutions on the excessive bank charges goes beyond the debate stage, so that whatever action the Upper Legislative Chamber takes, would come into effect.

“This Senate has done this many times before; when there was a hike in the mobile telecommunication data charges, we intervened and put an end to that. When there were discrepancies and increases in electricity prices, we also took action. We have done this on a number of similar cases. Therefore, on this, I want us to take effective resolutions,” Saraki said.

Other Senators who contributed to the debate, called on banks to review their charges.

“The common man is also a victim,” said Senator Emmanuel Bwacha, “Banks declare profits and you wonder where these profits are coming from — it’s from the sweat of the common man. Let us come up with a law that puts banks on their toes.”

“It won’t be out of place to institute a committee that will call on the CBN to tell us what these charges are about. The Senate by fiat should abolish charges if they can’t be verified,” said Senator Bala Ibn Na’Allah.

“The Senate must take a serious stand on this issue. Nigerians are really suffering. The banking system is not encouraging. I had an issue, took it to the bank and was refunded but how many Nigerians can do this? The issue needs to be addressed,” stated Senator Kabiru Gaya.

“For me, this is a major step that we are taking. This is because I introduced the first ATM machine that came into Nigeria over 25-years ago,” the Senate President, Dr. Saraki told his colleagues, “Now, after 25-years, we should have grown out of these excessive charges and moved on. So, I believe that this is something that we must address to create an environment that protects all Nigerians, because these kind of charges in this economy affects everyone.”

The Senate further directed its Committees on Banking, Insurance and other Financial Institutions and Finance to conduct an investigation into the propriety of ATM card maintenance charges in comparison with international best practices and report back to the Senate.

The Senate also directed the aforementioned committees to invite the Governor of the CBN to appear before it to explain why the official charges as approved by the CBN are skewed in favour of the banking institutions as against the ordinary customers of the banks.

Finally, the Senate called on the Consumer Protection Council to look into the various complaints of excess and unnecessary charges by Nigerian Banks.

Source: The Ripples

The Federal Government of Nigeria has announced the issuance of a second tranche of N100 billion Sukuk Bond to finance road infrastructure across the country.

The approval for the second tranche followed the success and oversubscription of the first tranche, the Chief Executive Officer (CEO) of Metropolitan Skills, Ummahani Amin, said at a two-day training on Sukuk structurisation and management in Abuja.

The training was organised by the Metropolitan Skills Ltd. in partnership with the Ministry of Finance, and Standing Committee for Economic and Commercial Cooperation of the organisation of the Islamic Cooperation (COMCEC).

Recall that the Federal Government had in September 2017 issued the first N100 billion Sukuk Bond as part of capital raising for the construction of about 25 roads in the nation.

Amino said funds realised from the second tranche of the bond would also be channelled into the construction of roads across the six geo-political zones of the country.

He assured that just like the first tranche, this year’s tranche of N100 billion would be successful.

“We are doing the second tranche now because the first one was successful and over subscribed. N100 billion was involved in the first and the second is on the way.

“So we are looking at the same infrastructure, construction of roads across Nigeria and the six geopolitical zones. This has never happened in the history of Nigeria for infrastructure,” Amin said.

 

Source: The Ripples

The Naira, yesterday, depreciated to N363.27 per dollar in the Investors and Exporters (I&E) window even as the volume of dollars traded rose marginally by 257 percent.
 
Data from FMDQ showed that the indicative exchange rate for the window rose to N363.27 per dollar yesterday from N362.97 per dollar on Wednesday, indicating 30 kobo depreciation of the naira.
 
The volume of dollars traded on the window yesterday rose by 257 percent to $401.69 million from $112.66 million traded on Wednesday.
 
However, the naira yesterday was stable at N359 per dollar in the parallel market.
 
 
The Guardian

The Central Bank of Nigeria (CBN) said it will impose N10,000 ($28) fine per item for every failed NIP transaction caused by any financial institution operating in the country.

It said the implementation of the sanction, which would be effective from October 2, 2018, would be monitored using complaints from senders and/or beneficiaries.

The CBN said the sanction would be placed on any Instant (Inter-Bank) Electronic Funds Transfer (EFT) service provider that fail to reverse such payment within 24 hours.

Instant (Inter-Bank) service provider are any financial institution licensed by CBN to carry on the business of facilitating electronic funds transfer services in partnership with sending and receiving entities.

The CBN, in its Regulation on Instant (Inter-Bank) EFT Services in Nigeria released during the weekend, said the policy was in furtherance to its mandate for the development of electronic payments system in the country.

Also the financial regulator also said delayed application of inward NIP into beneficiary’s accounts beyond four (4) minutes would also attract another N10,000 ($28) fine per item.

The apex bank however advised any stakeholder to the instant EFT service willing to propose an amendment to the regulation to formally forward such proposal to the office of its Director, Baking and Payments System Department for consideration.

Instant (Inter-Bank) EFT also known has instant EFT or instant payment means a system between two distinct entities when delivery from the sending entity to the receiving entity takes place within one (1) minute.

 

The Ripples.

Following declines in the value of shares of Nestle Nigeria, Guaranty Trust Bank, Zenith Bank and other highly capitalized stocks, the trading activity on the floor of the Nigeria Stock Exchange (NSE) on Monday closed in red to start the week.

The bearishness recorded at the market was as a result of persisted sell pressures on the local bourse, dragging the key performance indicator of the NSE, the All-Share Index (ASI), down by 1.25 percent to close at 34,037.91 points, and plunging the year-to-date loss of the ASI to -12.16 percent.

After the close of business, equities investors lost a total of N155.60 billion in value as market capitalization of all listed stocks, which opened at N12.27 trillion, dropped to N12.43 trillion.

Consequently, the total volume and value of transactions dipped by 11.75 percent and 35.53 percent from 155.95 million shares and N2.1 billion to 137.63 million shares and N1.36 billion, respectively.

Performance across sectors was also bearish, as indices of all major sectors headed to the south. The NSE Consumer Goods index led the sector decliners, falling by 3.69 percent as investors sold off Nestle Nigeria, which dropped by 9.7 percent, and Nigerian Breweries shedding 0.4 percent.

NSE Insurance index trailed with 2.09 percent depreciation on the back of sell-offs in NEM Insurance and Continental Reinsurance, while NSE Banking index dropped by 1.25 percent, driven by sell pressures in Guaranty Trust Bank, Zenith Bank and Access Bank, which fell by 1.4 percent, 1.9 percent and 1.7 percent, respectively.

Similarly, Forte Oil, which shed 9.3 percent, pulled the NSE Oil & Gas index down by 0.52 percent, while NSE Industrial Goods index closed flat amid profit taking activity on Cutix, dropping 0.25 percent of its share value.

Nestle Nigeria led the laggards chart, depreciating by 9.67 percent to close at N1,355 per share. Global Spectrum Energy Services followed by shedding 9.45 percent to close N5.75 per share, while Forte Oil dropped 9.29 percent to close at N19.05 per share.

Regency Alliance Insurance Company lost 8.70 percent to close at 21 Kobo per share, while Japaul Oil fell by 7.69 percent to close at 24 Kobo per share.

On the flip side, Sunu Assurances Nigeria emerged the top gainer with10 percent to close at 22 Kobo per share. Union Diagnostic & Clinical Services trailed by gaining 7.41 percent to close at 29 kobo, while Honeywell Flour garnered 5.56 percent to close at N1.52 per share.

University Press gained 4.17 percent to close at N2 per share, while Mutual Benefits Assurance rose by 3.70 percent to close at 28 Kobo per share.

Guaranty Trust Bank was the most traded stock in value after recording 29 percent of the total investment turnover, reaching 11.25 million volumes of shares valued at N390.94 million.

Nigerian Breweries, which accounted for 26 percent of the total return, traded a total volume of 2.36 million worth N218.80 million, while Zenith Bank sold 6.64 million volume of shares at N136.60 million.

United Bank for Africa traded 16.66 million shares valued at N130.87 million, while Nestle Nigeria transacted 87,930 shares worth N119.77 million.

Analysts at Afrinvest Securities said the market performance reflects investors’ bearish outlook on the market as political risks remain heightened and in addition to continued absence of positive drivers.

In spite of the negative performance, the analysts remained optimistic that some bargain hunting would drive performance in the near term.

 

Vanguard

A limited liability company Reagan Cement Limited alleged to have suffered economic misfortune as a result of breach of contract occasioned by Bank of Industry limited, has renewed its N2.8 billion legal battle against the bank.
 
In an amended statement of claims accompanied by written statement on oath sworn to by the Chief Executive officer of the company, Chief Reagan Ufomba and filed before a Federal High Court in Lagos by a Human Right Lawyer, Festus Keyamo SAN on behalf of Reagan Cement Limited, Chief Ufomba alleged that by a letter dated 1st of November 2012, Bank of Industry Limited offered his company a long term loan of N2,875,583,735 for the purchase of equipment and machinery for the building of Cement Chinke Grinding Mill in Calabar.
 
In line with conditions precedent to the disbursement of the loan, the company submitted a bank guarantee from the Unity Bank Plc as receiving bank as part of the condition for the disbursement of the said loan.
 
However, from the total sum of N2,875,583,735 only the sum of N316,314,210.85 was capitalized interest and paid upfront to Bank of Industry and the balance of the loan facility in the sum of N2,559,269,514.15 was transferred into the company’s account domicile with Unity Bank Plc. The capitalized interest represents the interest on the loan facility for one year.
 
The company has been paying interest on the facility to the bank between January and May 2014. The duration of the loan was for seven years.
 
When the loan was still subsisting and no breach whatsoever on the part of the company, the bank called back the whole sum of the loan, a total sum of N2,875,583,735 via transfer out of the account of the company with Unity Bank Plc on the 5th of august 2014 in favour of Bank of Industry.
 
Chief Ufomba averred further that on the premise of the said loan, Shangai Minggong Heavy Equipment Company Limited of China HAXMI engineers was contracted to build and manufacture the various equipment and machine for the grinding mill, saying some of the equipment and machine are already in Calabar for installation while others have been manufactured but yet to be shipped into Nigeria.
 
The bank demanded for 1% letter of credit commission to be paid upfront before the equipment can be paid for,1% legal, 1% processing fees and another 1% commitment fees. Meeting all the obligations set by the bank and terms of the loan agreement still subsisting, the bank called back the loan through the company’s bank guarantee, Unity Bank Plc without informing the company.
 
He said the grinding mill project in Calabar is on a stand still as contractors are calling for their money and the remaining equipment set for shipment but yet to be paid for because the funds have been withdrawn by the bank.
 
According to him, when the company noticed that Bank of Industry had called back the loan after paying the sum of N885,282,452 as fees to the bank for services, it wrote to the bank querying its action, as they acknowledged the letter but never responded to the plea of the company
 
He said the loan was for seven years and that the company was still enjoying a two year moratorium and interest paid as when due but the breach of the bank has caused huge damages to the project which was ongoing as monies owed by contractors could not be paid due to the frustrations of the said facility by the bank.
 
Consequently, the company claims against the bank are as follows:
 
-A declaration that the called back of the loan facility by the bank was a breach of contract between the company and Bank of Industry Ltd.
 
-An order of the court mandating the bank to reimburse the account of the company domicile with the bank with the balance from the loan sum of N2,875,735 after payment for the cost of production and manufacturing of the equipment and machine for the grinding mill has been deducted and paid to the contractor.
 
-An order that the sum of N2 billion be paid to the plaintiff as damages for the bank charges, loss of business, loss of reputations and loss of profit.
 
 
Source:NAN
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