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Heritage Bank Boss Detects Shortfall of BVN in ID Mgt

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Heritage Bank Boss Detects Shortfall of BVN in ID Mgt

By Modupe Gbadeyanka

The need for federal government to work towards creating a credible and strong identity management towards expanding access to credit in the country has been emphasized by the MD/CEO of Heritage Bank, Mr Ifie Sekibo.

Speaking at the 2019 Annual Conference of Finance Correspondents Association of Nigeria (FICAN) recently, the renowned banker said the ability of individuals to relocate from one place to another without notifying anyone was a major issue in access to credit.

According to him, the Bank Verification Number (BVN) introduced in the banking system by the Central Bank of Nigeria (CBN) some years ago has not been able to address some of the issues around identity management in the country, but only been able to create a form of identification.

Represented by divisional head, Strategy and Business Solutions, Mr Segun Akanji, the bank executive said the dearth of effective and standard identity management infrastructure made access to credit for the SMEs in Nigeria tough as banks only see unmitigated risks.

“I am talking about identity management challenge. That is the biggest collateral to lending and that is what is missing in this economy. The day banks can verify where you live, everybody will get loan with ease, because you cannot run away,” he stated, explaining that “the problem is this, I don’t know where you live.

The address of the company is not where you live. And you can wake up in FESTAC today, but tomorrow you move to Ajangbadi or Victoria Island. You don’t have to tell me. And that is a huge problem for banks.

“People take a loan from banks and change accommodation, run away to Ibadan and you cannot find them. That must change. But how do you do that? It is very simple. You lose all the benefits that is allocated to you as a person, the day you relocate like that, you are as good as dead.

“Like when you live abroad, once you misbehave with your identity, you cannot bank, your credit goes bad, you cannot go to hospital and everything else goes bad and you cannot do anything. So, you have a responsibility to yourself and the country that supports you to report yourself.

“There is no value in our identity management as we have it. So, it is not just about banks, it is about the holistic structure where there is no value to the person that each of us will represent.”

He gave instances about developed economies such as the US where if one changes accommodation, they must notify all relevant institutions that they deal with because of the inherent value in the system.

“Just like they do abroad, when you are changing accommodation, you will be the one going to your bank, hospital, everywhere, you will dedicate a day in a week until you go around to everyone and inform them of the address change,” he said.

“Why? There is value to where you live. That’s where your mail, pension, cheque comes. Everything attached to you comes to that address. So, there is value. We need to get to that and then no one will be needing collateral to get some minimum amount to do business.”

Mr Sekibo also observed that although the banks had pushed the government to some form of identity management system through the bank verification number, BVN, it has not been enough to solve the problem of the identity constraining lending in the country.

“You can argue that the banks have driven the government to some identity management system through the BVN, but the problem is that the infrastructure that will keep everybody in the homes where they live and not just change is non-existent,” he said.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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Banking

Q3’21: Ecobank Impresses Shareholders With Triple-Digit Growth in PAT

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Ecobank Business Account

By Dipo Olowookere

Ecobank Transnational Incorporated (ETI) has impressed shareholders and the investing community with its financial performance in the first nine months of 2021.

The results of the company submitted to the Nigerian Exchange (NGX) Limited a few days ago showed a triple-digit growth in the profit before tax as well as the post-tax profit.

In the period under review, the pre-tax profit jumped to N143.7 billion from N34.5 billion, indicating an increase of 316 per cent, while the post-tax profit jumped 916 per cent to N104.5 billion from N10.3 billion.

It was observed that the significant increase in profits despite the macro-economic strains was buoyed by growth in gross earnings, net investment income, other operating income and decline in operating expenses.

According to the Group CEO of Ecobank, Mr Ade Adeyemi, the company was able to achieve this feat due to the careful implementation of the strategies put in place by the management team.

“These results also demonstrate the hard work invested in driving efficiency in all our businesses in line with our deliberate focus on driving down our cost-to-serve, sustain improvement in the quality of our credit portfolio, and strengthen liquidity and capital buffers,” he stated.

A look at the top-line of the financial results of the firm showed that in the period under review, the gross earnings grew by 12 per cent to N686.8 billion from N614.5 billion reported in 2020.

Also, net investment income rose by 523 per cent to N5.6 billion from a loss of N1.3 billion in 2020, while other operating income closed at N11.6 billion, higher than N3.3 billion reported in 2020.

The group’s total assets went up by 5 per cent to N10.9 trillion as at September 30, 2021, from N10.4 trillion in the full-year ended December 31, 2020.

“We reported strong results, reflecting the continued diligence of Ecobankers in putting our customers first and ensuring that we meet their respective needs.

“For the nine months period up to September 2021, we earned $352 million in pre-tax profit, a 41 per cent increase compared to the prior year and revenues of $1.3 billion, a 4 per cent growth. Hence return on tangible equity increased to 17.9 per cent, and we grew the per-share value of our shareholders’ equity by 11 per cent to 5.52 US dollar cents,” Mr Adeyemi further said.

The banker further stated that “our cost-to-income ratio has been declining consistently quarter on quarter, currently 58.3 per cent.

“In addition, the stock of non-performing loans as a percentage of loans outstanding is now at 6.9 per cent compared to 9.9 per cent a year ago.

“We have boosted the firm’s liquidity profile, thanks to growing customer deposits fuelled by an acceleration in digital channel adoption, partnerships with fintechs, telcos, and businesses in the payments ecosystem.”

“Finally, we continue to invest in new digital and mobile capabilities to enhance customer experience, alongside the investments we are making in our people, processes, and controls, to ensure the continued resilience of our business and service delivery to our clients. I am deeply grateful to all our customers and the Ecobank team for the remarkable job,” Mr Ayeyemi added.

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Banking

Sterling Bank Gets CBN Approval for Non-Interest Banking Business

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sterling bank logo

By Dipo Olowookere

An approval-in-principle has been granted by the Central Bank of Nigeria (CBN) to Sterling Bank Plc for its non-interest banking business known as Alternative Bank Limited.

Sterling Bank, a mid-level lender in Nigeria, intends to operate as a holding company and the apex bank has also already given the financial institution an approval-in-principle for this.

In a statement dated Wednesday, December 8, 2021, and signed by the company secretary, Temitayo Adegoke, it was stated that the new company will operate as a standalone bank.

The lender explained that the non-interest bank will mainly focus on social impact, corporate responsibility, and ensure religious compliance in all its dealings.

In addition, it will focus on building partnerships that connect individuals and businesses leveraging technology to create business optimisation while solving an individual’s daily financial needs.

When fully operational, it would join the likes of Jaiz Bank Plc, the first non-interest financial institution in the country.

“We are pleased to inform the Nigerian Exchange Limited (NGX), shareholders, and the general public that Sterling Bank Plc has obtained the Central Bank of Nigeria‘s (CBN) Approval-in-Principle for a standalone license for its non-interest banking business – the proposed Alternative Bank Limited.

“The approval is sequel to the approval-in-principle granted to the Bank for the restructuring as a holding company (HoldCo) and subject to the fulfilment of conditions as stipulated by the CBN.

“The Alternative Bank Limited will focus on building partnerships that connect individuals and businesses leveraging technology to create business optimisation while solving an individual’s daily financial needs.

“The overall business will focus on social impact, corporate responsibility, and ensure religious compliance in all its dealings,” the disclosure stated.

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Banking

Heritage Bank Partners CBN, LCFE to Disburse N41bn to Wheat Farmers

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Heritage Bank Partners

By Modupe Gbadeyanka

Farmers in 14 states of the federation will soon receive N41 billion to grow wheat on about 111,025 hectares of land as part of efforts to expand the production of the crop in the country.

The money will be disbursed to the wheat farmers by Heritage Bank Plc in partnership with the Central Bank of Nigeria (CBN).

To make the programme seamless, Heritage Bank has commenced the registration of the farmers and this is done through the Lagos Commodities and Futures Exchange (LCFE).

The MD/CEO of Heritage Bank, Mr Ifie Sekibo, while addressing newsmen, expressed optimism that the scheme would help reduce the nation’s food import bill by increasing wheat production, create market linkages between smallholders farmers and anchors/processors, create an ecosystem that drives value chain financing, improve access to credit by the smallholder farmers by developing credit history through the initiative and many more.

Mr Sekibo who was represented by the Divisional Head, Agribusiness, Natural Resources & Project Development, Heritage Bank, Olugbenga Awe, stated that the partnership was basically to consummate Wheat Seed Multiplication Project under the CBN’s Brown Revolution Initiative, in order to ensure due diligence on loan administration, monitoring and recovery, which would bring about increase in the domestic production of wheat and close the wide supply gap in the Nigerian agricultural space.

“What we want to achieve is to end importation of seeds and make Nigeria self-sufficient in wheat production.

“We are working with about 30 firms focusing only on seed production and also working with CBN to make sure we register all farmers. We believe working with LCFE will move Nigerian farmers from an informal approach to a structured approach”, he said.

He further explained that whilst riding on the success of the wet season, “we decided to focus on the dry season which comes naturally to our people. As a bank, we are working on two things; one is to ensure the continuous multiplication of seeds and the other is to focus on the grains.

Former Executive Director of Lake Chad Research Institute (LCRI), Dr Oluwasina Olabanji commended Heritage Bank for its efforts in reducing wheat importation and saving the country from the $2 billion spent annually on the importation of wheat, calling on other banks to emulate the lender in efforts to achieving wheat sufficiency in the country.

“If this money is saved it could be used for infrastructural development. It is true that there are a lot of linkages not only on financial institutions but also in the value chain, these linkages have been moulded together with the intervention of the CBN and Heritage Bank,” he said.

He explained that the CBN and Heritage Bank’s intervention has become critical due to the high demand for wheat in Nigeria and the inability to meet that demand.

Speaking also, the Managing Director of LCFE, Mr Akinsola Akeredolu-Ale, commended the CBN and Heritage Bank for their support, which have leveraged Nigeria to be on the right track for self-sufficiency in food production.

He said the commodity exchange in partnership with Heritage Bank would provide an enabling environment for farmers, warehouse owners, commodity middlemen and commodity merchants, to be able to trade Wheat.

He noted that LCFE has created a platform that enhances liquidity in the commodity market, enhances the revenue base of the country and enables commodity traders to manage risk.

Business Post reports that Heritage Bank is throwing its weight behind this scheme as one of the participating financial institutions (PFIs) under the CBN’s Anchor Borrowers’ Programme IABP).

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