Banking
Stanbic IBTC Bank Boost Economy, Grows LDR to 69%
By Aduragbemi Omiyale
One of the things that help the economy of any nation is the provision of credit facilities to the different sectors and for many years, it has been one issue.
This was why the Central Bank of Nigeria (CBN) when worried that financial institutions were not carrying out their core function of lending to entrepreneurs, it mandated banks operating in the country to ensure their loan to deposit (LDR) is not below 65 per cent.
This was contained in a circular, BSD/DIR/GEN/LAB/12/070, to banks dated January 7, 2020, on the regulatory measures to improve lending to the real sector of the Nigerian economy.
Since the issuance of the regulatory directive and in line with its key strategic objective of driving economic growth in Nigeria, Stanbic IBTC Bank has increasingly focused on the growth of its credit exposures to the real sector of the economy.
The focus and concerted efforts of the bank’s management to ensure compliance with the regulatory directive of improving lending to the real sector of the Nigerian economy have been responsible for the growth in the risk asset portfolio for Stanbic IBTC Bank over the last two years.
The loan book increased by 18 per cent from FY 2019 position of N556.4 billion to N655.3 billion as at December 31, 2020.
The bank also recorded an increased loan growth by 30 per cent from the December 31, 2020 position to a gross risk asset position of N854.9 billion recorded as at September 30, 2021.
It is important to note that the risk asset growth of 18 per cent and 30 per cent recorded by the bank in FY 2020 and as at Q3:2021 remain significantly higher than the industry average growth of 18 per cent and 8 per cent in FY 2020 and as at Q3:2021, respectively.
Consequent upon the significant growth recorded in the bank’s risk asset growth in 2020 and YTD 2021, the bank has remained compliant with the CBN’s daily minimum LDR requirement of 65 per cent with an FY 2020 daily LDR average of 65.84 per cent and 2021 YTD daily average of 69.86 per cent.
It is important to note that the bank suffered no CRR debits by the CBN for non-compliance with the regulatory LDR directive over the period.
For the good record, it is also noted that the growth in the bank’s Cash Reserve Requirement (CRR) position from N369.0 billion as at December 31, 2020, to N462.6 billion as at September 30, 2021, has been largely on account of the monetary policy actions introduced by the CBN to rein in inflationary and exchange rate pressures in the economy.
In line with its price stability and monetary policy mandates, the CBN is saddled with the responsibility of managing surplus liquidity in the system and at various times over the period, the CBN has introduced special CRR debits to sterilize surplus market liquidity.
These special CRR debits which are over and above the minimum regulatory cash reserving requirement of 27.5 per cent of customer deposit growth have indeed been responsible for the growth in Stanbic IBTC Bank’s total and effective CRR positions which stood at N462.6 billion and 60.09 per cent respectively as at September 30, 2021.
Notwithstanding the financial constraints arising from the sterilized liquidity from the CBN, Stanbic IBTC Bank remains very liquid and adequately capitalized with liquidity ratio and capital adequacy ratio standing at 96.2 per cent and 15.7 per cent respectively as at September 30, 2021, and above the regulatory minimum of 30 per cent for liquidity ratio and 8 per cent for capital adequacy ratio.
By Aduragbemi Omiyale
The Central Bank of Nigeria (CBN) has reaffirmed that the old and new Naira notes will continue to be used for financial transactions in the country beyond December 31, 2024.
There had been rumours that the old and redesigned N200, N500, and N1,000 banknotes would no longer be legal tender from Wednesday, January 1, 2025, because the central bank would phase out the notes in compliance with a Supreme Court judgement of November 29, 2023.
But the apex bank, in a statement signed by its acting Director of Corporate Communications, Mrs Hakama Ali, on Friday, clarified that the apex court’s judgement being cited did not authorise the bank to phase out the banknotes by the end of this year.
According to her, the court allowed the CBN to leave the old and new notes to be used concurrently until it decides to gradually phase out the former.
The central bank’s spokesperson urged members of the public to disregard claims suggesting the old series of these denominations would cease to be valid at the end of this year.
She urged them to continue to accept all Naira notes for daily transactions, encouraging banks to also adopt alternative payment methods such as electronic channels to reduce the pressure on physical cash usage.
“The Central Bank of Nigeria (CBN) has observed the misinformation regarding the validity of the old N1000, N500, and N200 banknotes currently in circulation.
“In line with the bank’s previous clarifications and to offer further assurance, the CBN wishes to reiterate that the subsisting Supreme Court ruling granted on November 29, 2023, permits the concurrent circulation of all versions of the N1000, N500, and N200 denominations of the Naira indefinitely.
“For the avoidance of doubt, all versions of the naira, including the old and new designs of N1000, N500, and N200 denominations, as well as the commemorative and previous designs of the N100 denomination, remain valid and continue to be legal tender without any deadlines,” the statement noted.
By Adedapo Adesanya
Access Bank Plc, the banking subsidiary of Access Holdings Plc, has entered into a binding agreement with South African-based Bidvest Group Limited for the acquisition of 100 per cent equity stake in Bidvest Bank Limited.
The deal for the 24-year-old South African lender is due to be completed in the second half of 2025, upon regulatory approval.
This shows Access Bank’s further expansion plans in line with goals set by its late founder, Mr Herbert Wigwe.
The agreement to acquire 100 percent stake in Bidvest Bank reflects Access Bank’s commitment to strengthening its footprint in South Africa and consolidating on its position as the continent’s gateway to global markets as it seeks to optimise the benefits of recent acquisitions and accelerate its transition towards a greater focus on efficiencies.
Bidvest Bank, founded in 2000 is a niche and profitable South African financial institution providing a diverse range of services, including corporate and business banking solutions and diverse retail banking products.
As of its year ended June 2024, Bidvest Bank reported total assets equivalent of $665million and audited profit before tax of $20million.
Upon conclusion of this acquisition, Bidvest Bank will be merged with the bank’s existing South African subsidiary to create an enlarged platform to anchor the regional growth strategy for the SADC region.
This is coming just as the bank opened a new branch in Malta as part of efforts to focus on international trade finance after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
The Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
By Modupe Gbadeyanka
To strengthen Europe-Africa trade ties, Access Bank has opened a new branch in Malta. It will focus on international trade finance, employing approximately 30 people in its initial phase, with plans for controlled expansion over time.
It was learned that this Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
Access Bank Malta Limited commenced operations after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
Malta, a renowned international financial centre, and a gateway between the two continents, is strategically positioned to play a pivotal role in advancing commerce and fostering economic partnerships.
This strategic expansion into Malta enables The Access Bank UK Limited to leverage growing trade opportunities between Europe and Africa.
It underscores the organisation’s commitment to driving global trade, financial integration, and supporting businesses across these regions.
“By establishing operations in Malta, we will gain a foothold in a market that bridges European and North African economies, moving us one step closer to our goal of becoming Africa’s Gateway to the World.
“It further enhances our bank’s capacity to support clients with innovative solutions tailored to cross-border trade and investment opportunities,” the chief executive of Access Bank, Mr Roosevelt Ogbonna, stated.
“Europe has emerged as Africa’s leading trading partner, driven by initiatives such as the Economic Partnership Agreements between the EU and African regions and the African Continental Free Trade Area (AfCFTA).
“With Europe-Africa economic relations entering a new phase, The Access Bank Malta Limited is ideally positioned to deepen trade and meet the financing and banking needs of our clients in these expanding markets,” the chief executive of Access Bank UK, Mr Jamie Simmonds, commented.
Also speaking, the chief executive of Access Bank Malta, Renald Theuma, said, “Malta is uniquely positioned as a bridge between Europe and Africa, making it an ideal location for our subsidiary. This move allows The Access Bank Malta Limited to engage more closely with customers in Europe and deliver tailored financial solutions that drive growth and connectivity across both continents.”
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