BusinessDay 07 Feb 2018

Wednesday 07 February 2018
16 BUSINESS DAY
In Association
with
Banks’ profit rises above
60% in one year
Stories by
HOPE MOSES-ASHIKE
Deposit Money
Banks
(DMBs) profit
increased by
more than 60
percent in the last one year,
mainly driven by increases in
interest income.
Banking sector net interest
income is the difference
between the revenue that
is generated from a bank’s
assets and the expenses associated
with paying out its
liabilities.
Yahaya Shehu, a member
of the Monetary Policy Committee
(MPC) who stated this
in his personal statement at
the November 2017 meeting,
also noted that banks’ return
on equity (ROE) and return
on assets (ROA) are showing
an upward trend and
are higher than comparator
countries.
However, total credit to
the economy decreased by
a little over 3 percent; nonperforming
loans (NPLs)
are rising and the capital ad-
equacy ratio, while still above
the regulatory threshold, is
declining.
“Banking industry profitability
improved significantly,
although I am not under any
illusion that the challenging
macroeconomic environment
could have adverse
effect on non-performing
loans (NPLs)”, said Joseph
Nnanna, governor, financial
system stability, Central Bank
of Nigeria (CBN).
Reflecting banking system
liquidity, Nnanna said
the average inter-bank call
rate, which opened at 12.00
per cent on October 3, 2017,
closed at 5.38 per cent on
November 16, 2017. The
OBB rates opened at 10.41
per cent and closed lower
at 6.02 per cent in the same
period. However, the average
inter-bank call and Open
Buy Back (OBB) rates for the
period stood at 10.94 and
10.15 per cent, respectively.
Credit to the private sector
fell by 0.24 per cent in October
2017, while net credit to government
rose by 7.60percent.
“We think sector NPLs are
close to their peak, and we
expect higher oil prices will
have direct implications on
loan performance. We believe
capital buffers will rise as
profits improve”, Olamipo Ogunsanya,
analyst at Renaissance
Capital said in a note.
Despite a positive macro
backdrop, RenCap believes
2018 will be a recovery story
at best; earnings growth will
be challenged by the declining
yield environment, volatility
in forex related gains,
and limited scope for cost
efficiencies.
“Tough economic decisions
are likely to be delayed
till after the 2019 general elections,
but the political risks
that come with a pre-election
year render us cautious on the
recovery ahead. We assess
the evolution of non-interest
revenue (NIR) over the past
few years, and believe that the
smaller banks such as SIBTC,
Diamond and FCMB should
see less volatility in NIR given
the relatively higher contribution
from stronger more
sustainable income streams
such as e-banking business
and services”.
CBN approves Fidelity Bank’s
BCMS, ISMS Certification
The Central Bank of
Nigeria (CBN) and
the UK Trade and
Investment have
endorsed the Business Continuity
Management System
(BCMS) and the Information
Security management
System (ISMS) Certification
of Fidelity Bank plc.
The 22301 BCMS was
developed to protect companies
from the risks associated
with downtime,
which could occur due to
unexpected disruptions or
disasters.
The CBN had given all
banks September 2018 as
deadline for BCMS certification.
Dipo Fatokun, director,
banking and payments
system department, CBN,
said the certification is an
evidence of Fidelity Bank’s
commitment to sustain
quality service delivery to
customers.
Represented by Bature
Yunana Magaji from the
same department, Fatokun,
urged other players in the
industry to emulate from
the bank.
“BCMS demonstrates
that Fidelity bank is committed
to protecting its staff
and ensuring the continuity
of critical business functions,
mitigate risk, and sustain
customer confidence
in the event of a disruption”,
Nnamdi Okonkwo, managing
director/CEO, said at the
official presentation of the
certification.
He explained that after
months of rigorous Business
Impact Analysis (BIA)
and Risk Assessment across
all the departments of the
Bank, our Bank was awarded
the prestigious International
Organisation for Standardization
(ISO) 22301 certificate
by the British Standard Institute
(BSI) in August 2017.
“Implementing the ISO
22301 (Business Continuity
Management System) is a
critical step towards achieving
our corporate strategy
and enhancing stakeholders’
confidence in the Fidelity
brand”. “Today, we have
built resilience in process
functions and services that
are critically sensitive to
time and disruptions. We
have also tested our continuity
plans and simulated the
recovery of staff to alternate
work locations.
Each of our core business
functions and infrastructure
groups now maintain and
test their business continuity
plans (BCPs) to ensure a
continuous, reliable service”,
Okonkwo said.
FCMB designs cash rewarding scheme to meet customers’ needs
First City Monument
Bank (FCMB) is set
to motivate about
100 customers
among its youth segment
with cash rewards, other
exciting prizes and engagements
to commemorate this
year’s Valentine’s celebration.
In its annual campaign
tagged, “Banking on Love”,
the lender said many young
and even some older people
view the February 14th Valentine
Day celebration as
solely defined by the day’s
activities with their chosen
partners and loved ones.
This year’s Banking on
Love campaign will include
cash awards and some
giveaways to many youth
customers during and after
Valentine celebration, a
global event that climaxes
on February 14th. N10,000
each is being given to 25
young people every week,
throughout February, the
month of Love. To be eligible
to win, customers are
required to carry out transactions
with their cards that
add-up to at least N5,000 in
a week. Winners will be announced
weekly.
The Flexx account is
FCMB’s youth-centric
banking product targeted
at young people who are
actively seeking platforms
that allow them express
their uniqueness, while
building skills for financial
success. This is summarised
in the description of
Flexx as, “An app, a card, an
account”, which gives account
holders the freedom
to bank on the go, using the
Flexx Mobile App.
“Today, First City Monument
Bank (FCMB) Limited
thinks differently”, said
Diran Olojo, head of corporate
affairs, who enjoined
the youth to see love as a
virtue that is all encompassing.
FCMB said love
is more about care, giving,
commitment, passion,
trust and responsibility for
the comfort, protection, security
and happiness of the
next person with an open
mind and genuineness
of purpose. The position
further goes to define some
of the activities engaged
in by the Bank which pays
close attention to many
segments of the Nigerian
society.
“At FCMB, it is not all
about business at all times.
There is a strong propelling
philosophy which also
drives us to be concerned
about the best way to positively
affect our immediate
environment. How best to
reach and impact the lessprivileged.
We always think about
the best strategies to adopt
to help the needy people in
our society. We care about
the orphans, the widows,
the aged people, our youths
and the internally displaced
persons (IDPs) who have
been affected by insurgency,
man-made and other natural
disasters. We believe one
of the positive outcomes of
sound corporate governance,
is impacting positively
on lives and communities in
Nigeria.
Indeed, as businesses act
responsively and boost their
performance indices, they
should also devote a part of
their income to giving back
to the society by engaging in
various life-changing activities.
At FCMB, we have been
guided’’.