More facts have emerged on the reasons why the defunct Diamond Bank surrendered itself for a business combination deal with Access Bank Plc. The deal was consummated on April 1.
According to a report obtained by THISDAY yesterday, between December 2014 and June 2018, the immediate past management of Diamond Bank under the leadership of Mr Uzoma Dozie as Chief Executive Officer, inherited a distressed oil and gas portfolio of $1.8 billion (N302.6 billion).
Of this amount, the sum under Watch list and non-performing loans (NPLs) stood at $406 million (N68.9 billion) and $73 million (or N12.3 billion), respectively.
In addition, the bank had foreign currency balance sheet mismatch in excess of $883 million as at October 31, 2015, resulting from maturing trade obligations and customer transactional instructions.
Similarly, Diamond Bank had unpaid billions of naira to the federal government’s Treasury Single Account (TSA), resulting to regulatory sanctions and negative public perception and waning customer confidence.
The immediate past management of the defunct bank preserved Diamond Bank’s licence by paying down the inherited forex liquidity mismatch, it stated.
Furthermore, it showed that the inability of Diamond Bank to repay the Nigerian National Petroleum Corporation/Nigerian Petroleum Development Company Limited’s funds to the TSA, “due to the application of those funds in the creation of long-term oil and gas and power loans was a major threat to the bank’s corporate existence.”
Without external management, the then management of the bank employed every legitimate means, including strong negotiation and relationship management skills to have the issue resolved.
According to the report, as at the end of September 2018, this obligation had been fully extinguished.
While resolving this, the Uzoma Dozie-led management built an enviable retail franchise that, stand-alone, can generate sustainable profitability and low-cost deposits.
However, the value of the retail deposit was hidden in bad corporate loans inherited by the then management.
In addition, the management then developed long-term sustainable relationship with global institutions, which has helped to build thrust in its brand.
These included Women’s World Banking, Bills and Melinda Gates Foundation, Afreximbank, International Finance Corporation, Ecowas International and Development Bank, among others.
Commenting on the merger with Diamond Bank, the Group Managing Director/Chief Executive Officer, Access Bank, Mr. Herbert Wigwe, had said: “Together, we would have 27 million customers, which is the largest customer base of any bank on the continent. We would have 33,000 point of sale (PoS) terminals, 3,300 automated teller machines (ATMs) and all of that.
“Access Bank has grown over time and has built a very strong wholesale banking capability. We have also shown significant expertise as far as treasury is concerned, risk management as well as our capital management plan.
“We created and pushed a very strong value chain strategy which was our own way of building our retail business.
“This was because we realised that the creation of a large diversified bank is critical, not just for Nigeria, but in Africa and the world. If you go to any part of the world, what you tend to see is that the top three or top five banks technically control market share.”
Speaking further, Wigwe said the combination of Access Bank and Diamond Bank would ensure that “we are able to take and solve customers’ issues right from the wholesale end, down to the man in the village, just because of the use of technology.”
Sterling Bank Gets CBN Approval for Non-Interest Banking Business
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.
Heritage Bank Partners CBN, LCFE to Disburse N41bn to Wheat Farmers
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).
Unity Bank Targets 5 Million Women MSMEs in South West With Yanga Account
By Modupe Gbadeyanka
No fewer than 5 million Micro, Small and Medium Enterprises (MSMEs) being operated by women in the South West region of Nigeria would be engaged by Unity Bank Plc.
The Nigerian retail lender disclosed this at the launch of the Yanga Account in Ibadan, Oyo State.
The account package was specifically designed by the financial institution to promote women MSMEs and create a unique proposition.
At the official launch of the Yanga Account recently in Abuja, a movie star in Nigeria, Sola Sobowale, was unveiled as the brand ambassador.
Yanga Account is a complete suite of services designed to promote financial inclusion among women through stress-free savings and investment, access to the services of dedicated sales agents, agency banking services close to the location of their businesses, special business seminar and training on how to grow business, access to microloans, customized debit cards and other bundled e-banking products.
At the official unveiling of the Yanga Account for the South West region held in Ibadan on Tuesday, the bank pledged its unwavering commitment to empowering women in order to enable them to overcome every obstacle of accessing quality Banking services needed to assist the growth of their businesses.
As part of the efforts to connect directly with the target market, the star actress who is now known as ‘Mama Yanga’ undertook a market tour to interact with the women and gain first-hand knowledge of how the product is being received in the market.
Speaking at the event in Ibadan, the Managing Director/Chief Executive Officer of Unity Bank Plc, Mrs Tomi Somefun stated that the “Yanga Account heralds a new dawn for my fellow women operating businesses in South West Nigeria.”
She noted that “the Yanga account is open to all market women in farming, fashion design, tailoring, frozen food, pastry and baking, cosmetics, jewellery designs and making, skincare, eateries and restaurants, etc. whether living in the communities or cities.”
She reiterated that “the Yanga Account is conceived and designed for the financial literacy and empowerment of Nigerian women. It is about making sure that our women who make up 55 per cent of the financially excluded Nigerians have access to basic and life-changing financial services.”
Also speaking, Sola Sobowale invited all Nigerian women who operate businesses in the South West to embrace the incredible opportunities offered by the Yanga account to grow their businesses.
She said: “This is the first time that a bank will specifically design a product to cater to women and I am excited about the inherent benefits of this account and the endless possibilities that it brings to my fellow women. I invite all my fellow women in South-West Nigeria to sign up for the Yanga Account and watch their levels change.”
On his part, Group Head, Retail, SME Banking and E-Business, Unity Bank Plc, Mr Funwa Akinmade said: “Female-led MSMEs in South West Nigeria continue to play pivotal roles in the contribution of the MSMEs to the economy of Nigeria and that has informed this special activation of Yanga account in Ibadan today.
“The Yanga account is a well-packaged banking product that combines several services that most small businesses owned by women will need to become profitable. We are optimistic that Ibadan women and all others across South West Nigeria will embrace the Yanga Account and leverage its full benefits to grow their businesses.”
With the launch of the Yanga account, Unity Bank said it underscores its retail strategy which continually aligns with the vision of the Central Bank of Nigerian and the financial services ecosystem to provide needed support for Nigerian women by enhancing access to wealth-creating opportunities in the financial services sector.
Industry watchers believe the retail product has the potential to aggressively deepen financial inclusion, which recent research by Enhancing Financial Innovation & Access (EFInA) has shown “can benefit individuals, families, and businesses, supporting key outcomes such as GDP growth.”
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