Banking
GCR Affirms FCMB A-(NG) Rating with Negative Outlook
By Modupe Gbadeyanka
One of the local rating agencies, Global Credit Ratings (GCR), has affirmed the national scale credit ratings assigned to First City Monument Bank (FCMB) of A-(NG) and A2(NG) in the long term and short term respectively; with the outlook accorded as negative.
GCR disclosed in a statement issued on Friday, August 25, 2017, that the ratings are valid until August 2018.
Explaining the rationale behind the ratings, GCR the ratings reflect the lender’s financial and competitive position as a mid-sized (Tier 2) bank in Nigeria based on its key financial performance metrics.
Despite improved operating performance in FY16, the bank remains exposed to ongoing challenges in the domestic operating environment including slow economic growth, currency weakness, foreign exchange (forex) shortages and policy uncertainty, that continue to exert pressure on banks’ (including FCMB) asset quality and earnings, the rating agency said.
It noted that shareholders’ funds grew by 9.6 percent at FY16, underpinned by retained earnings. Capital adequacy was, however, impacted by inflated risk weighted assets (mainly due to the effect of naira depreciation on the balance of risk-weighted assets denominated in foreign currency) which led to a slight decline in the risk weighed capital adequacy ratio (CAR) to 16.5 percent at FY16 (FY15: 16.9 percent), although remaining above the 15 percent statutory minimum requirement. At 1H FY17, the ratio was reported at an improved 17 percent.
Although the gross non-performing loan (NPL) ratio improved to 3.7 percent in FY16 (FY15: 4.2 percent), this was chiefly supported by the loan book clean-up exercise undertaken by the bank, with impaired credits totalling N32.5 billion written off the bank’s loan book during the year.
Given these write offs, specific coverage of impaired loans declined to 25.5 percent at FY16 (FY15: 45.2 percent).
The NPL ratio rose to 4.7 percent at 1H FY17, but remained within the regulatory limit of 5 percent. Management has tightened lending criteria, established a dedicated unit to focus on recoveries, and committed to diversify the loan book by targeting lending to less susceptible sectors to contain NPL formation and ensure a quality loan book going forward.
A matching of assets/liabilities maturities at FY16 showed cumulative liquidity gaps across the ‘less than 12 months’ maturity buckets.
The liquidity gap stood at N253.7 billion in the ‘less than 30 days’ maturity bucket and equated to 1.4x capital at FY16.
Furthermore, although the bank closed with 31.2 percent statutory liquidity at FY16, liquidity pressure was evidenced as zero buffer was maintained above the 30% statutory requirement at some points during the year.
This pressure has persisted into 1H FY17, with the statutory liquidity ratio at 30.1 percent, GCR said.
Notwithstanding, it added, the 150.4 percent escalation in impairments charges to N35.5 billion, net profit after tax grew 3.4x to N12 billion during FY16.
Growth was mainly supported by large one-off revaluation gains booked on net foreign currency positions arising from Naira devaluation during the year.
Accordingly, ROaE and ROaA ended stronger at 10.4 percent (FY15: 4 percent) and 1.4 percent (FY15: 0.5 percent) in FY16 respectively.
Unaudited financial results at 1H FY17, reported pre-tax profit of N2.5 billion, representing an annualised 63.8 percent decline.
GCR said upward movement in the rating(s) or outlook could result from sustained improvement in the bank’s profitability, asset quality, capital and liquidity metrics, as well as an enhanced competitive position.
It noted that negative rating action may follow pressure on asset quality, profitability, capital and/or liquidity metrics.
By Aduragbemi Omiyale
Top financial technology (fintech) companies in Nigeria, PalmPay and Carbon, have commenced the issuance of Verve cards to their customers.
This allows millions of Carbon and PalmPay customers access to Verve’s extensive payment network, bringing digital payment solutions to previously underserved populations.
They began issuance of the cards following the approval of the Central Bank of Nigeria (CBN), underscoring the apex bank’s commitment to empowering fintech companies and advancing financial inclusion across the country.
The issuance of Verve cards by these firms will bring digital payment solutions to previously underserved populations.
Industry observers note that the decision by both fintech companies to align with Verve stems from the payment card’s network-wide reach and a robust infrastructure across Nigeria and beyond.
Last year, Verve marked its 15th anniversary characterized by its outstanding quality, innovativeness and vast array of options; it also announced that it has issued over 70 million cards, establishing itself as a dominant player in Nigeria’s payment ecosystem.
The domestic card scheme’s impressive penetration makes it a natural choice for fintech platforms seeking to rapidly expand their payment offerings while supporting the CBN’s financial inclusion goals.
Other fintech companies that have previously followed this line in issuing Verve cards include Opay and Moniepoint.
As a homegrown card scheme, Verve has continued to innovate its service offerings to compete effectively with international payment networks.
The company has integrated advanced features, including contactless payment technology and enhanced security measures, such as biometric authentication through other sophisticated recognition systems such as fingerprints.
Through collaborations like this, Nigeria’s journey toward a more inclusive financial ecosystem will be shortened, providing more Nigerians with access to modern banking and payment services through the combined technological capabilities of these financial service providers.
By Modupe Gbadeyanka
A leading player in the digital financial services sector, Moniepoint Incorporated, has been described by the federal government as a testament to the strength of Nigeria’s financial technology (fintech) landscape.
The Minister of Foreign Affairs, Mr Yusuf Tuggar, during a visit to the United Kingdom headquarters of the company, also said the firm reflects a true Nigerian success story.
He acknowledged the significant backing Moniepoint has received from global investors, including Google’s Africa Investment Fund, Visa, and BII, further validating its position as a leader in the fintech space.
Mr Tuggar stressed that a thriving fintech sector directly translates to more jobs, increased financial inclusion, and a stronger economy for Nigeria.
The Minister highlighted the organisation’s impressive growth, citing its 2000+ employees, thousands of sales personnel, and its empowerment of millions of businesses through enhanced financial inclusion.
“Nigeria is at a vantage position in the fintech and financial services sector. With banks and fintechs operating across Africa, we must continue to instill confidence in Nigerian businesses as they expand globally. Moniepoint is a testament to the strength of Nigeria’s fintech ecosystem,” he said during the visit aimed at strengthening diplomatic ties and fostering strategic cooperation between Nigeria and the UK.
In his remarks, the chief executive of Moniepoint, Mr Tosin Eniolorunda, reiterated the company’s commitment to powering the dreams of millions of business owners while engineering financial happiness for all Africans.
He noted that the dynamic digital landscape in Nigeria presents unique opportunities to harness technology to drive real change, and Moniepoint is excited to be at the forefront of this transformation.
“By empowering individuals and businesses with financial tools that are innovative and efficient, we believe that technology can be a powerful catalyst for economic growth and social development.
“This visit by the Minister signposts the importance of cross-border collaboration and the strengthening of Nigeria’s global partnerships. We recognize the critical role that international cooperation plays in advancing innovation, especially within the fintech sector.
“As a country, Nigeria has immense potential, and through strategic alliances with global stakeholders, we can unlock new opportunities that benefit both local and international communities.
“At Moniepoint, we are deeply aligned with the Nigerian government’s vision to enhance strategic cooperation in areas like trade, investment, and technology.
“We are eager to continue contributing to the development of our country’s digital economy while fostering meaningful collaborations that will leave a lasting legacy for generations to come,” he stated.
Formerly known as TeamApt Incorporated, Moniepoint, founded in Lagos in 2015 by Mr Eniolorunda and Felix Ike, has rapidly grown into a comprehensive digital financial services provider.
Offering payments, banking, credit, business management tools, and cross-border payment solutions, Moniepoint serves over 10 million businesses and individuals across Nigeria and Africa.
By Modupe Gbadeyanka
To help Nigerians secure their financial futures and build lasting legacies, Stanbic IBTC Bank has reintroduced its private banking offerings.
With a focus on personalised financial solutions, portfolio management, investment strategies, and estate management, Stanbic IBTC Bank empowers individuals and families to achieve their long-term goals of building lasting legacies for future generations.
By equipping families and individuals with the knowledge and tools to manage their wealth effectively, the subsidiary of Stanbic IBTC Holdings is fostering a legacy of financial resilience and prosperity.
Stanbic IBTC Bank’s private banking offerings include personalised financial planning to help clients achieve their short and long-term financial goals, investment management to enable clients access a wide range of investment opportunities, (including equities, fixed income, and alternative assets), estate and trust services through expert guidance on estate planning, wills, and trusts to ensure smooth wealth transfer, retirement planning through solutions that help clients build a secure and comfortable retirement, insurance and risk management through comprehensive protection against unforeseen events that could impact financial stability.
In a world where financial security and intergenerational wealth transfer is becoming increasingly critical, Stanbic IBTC Bank’s comprehensive suite of private banking solutions provides clients with the tools and expertise needed to navigate the complex financial landscapes.
Stanbic IBTC Bank leverages its deep market knowledge and global expertise to deliver solutions that align with clients’ unique aspirations.
“At Stanbic IBTC Bank, we understand that building a legacy goes beyond accumulating wealth; it is about creating a sustainable financial foundation that benefits future generations.
“Our innovative solutions are designed to help families protect, grow, and transfer their wealth seamlessly, ensuring their values and aspirations endure over time,” the chief executive of Stanbic IBTC Bank, Mr Wole Adeniyi, stated.
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