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Banks lose N1trn current account deposits in February

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Joseph Oyebola

Total current account deposits of banks fell by N1 trillion in February, implying banks generated fewer deposits during the month due to the biting effect of the economic recession.
This was one of the highlights of the Depository Corporation survey for February 2017 recently published by the Central Bank of Nigeria (CBN). Among other things, the survey revealed that total demand (current account) deposit of banks fell by 10.75 per cent to N8.6 trillion in February from N9.636 trillion in January. Similarly, currency outside the banks declined month-on-month (m-o-m) by 1.16 per cent to N1.61 trillion. Consequently, Narrow money supply declined m-o-m by 9.36 per cent (and 11.35 per cent year-to-date, y-t -d) to N10.21 trillion.

According to the report, broad money supply, M2, moderated month-on-month by 4.34 per cent to N22.37 trillion following a 0.46 per cent increase in Net Domestic Assets (NDA) to N13.82 trillion and an 11.21 per cent decline in Net Foreign Assets (NFA) to N8.55 trillion.  The increase in NDA followed a 0.54 per cent  m-o-m increase in Net domestic credit to N26.77 trillion which more than offset a 0.62 per cent increase in other liabilities (net) to N12.95 trillion.

Monetary policy stance

On asset creation, the public sector continued to crowd out the private sector as credit to the government increased m-o-m by 2.90 per cent to 4.41 trillion, outpacing the 0.09 per cent increase in credit to the private sector to 22.36 trillion.

The mild growth in credit to the private sector may have also been informed by relatively high non-performing loans. In February, the accommodative monetary policy stance remained in effect, reflected in the monthly decline in Reserve money by 1.61 per cent (and year-to-date by 5.06 per cent) to N5.54 trillion in the month of February as bank reserves decreased month-on-month by 2.28 per cent (year-to-date by 2.86 per cent)  to N3.22 trillion while currency in circulation fell m-o-m by 0.79 per cent (and 9.19 per cent y-t-d) to N1.98 trillion.

*Forex sales, TBs rattle interbank money market

The interbank money market suffered bouts of intense scarcity of funds which sent up cost of funds to the roof following liquidity outflows to fund foreign exchange purchase and investment in treasury bills (TBs).  Analysis of TBs trading during the week showed  that the CBN offered and sold N135 billion worth of Primary Market TBs comprising N28.1 billion worth of 91-Days bills, N23.7 billion worth of 182-Days bills, and N83.2 billion worth of 364-Days bills. While the 91-Days bills were undersubscribed with total public subscription at N17.1 billion, the 182-Days and 364-Days bills were oversubscribed with total public subscription at N28.3 billion and N90.4 billion respectively. In addition to this, the CBN also sold $264.3 million in forwards and spot transactions as well as $500 million special intervention sales.

As a result market liquidity, which closed last week at N21 billion dropped to minus N220 billion on Wednesday. This trend was however halted on Thursday and Friday, due to inflow of N264.3 billion from payment of matured TBs, and inflow of statutory allocation funds of N429 billion.

Reflecting the volatility of market liquidity, short terms cost of funds which closed the previous week at 16 per cent shot up to 100 per cent on Wednesday before crashing to 10 per cent at the close of business on Friday.

In terms of the direction of cost of funds this week, analysts at Afrinvest Plc, a Lagos based investment firm noted that: “In the coming week, we expect money market rates to remain dictated by CBN’s sustained but unpredictable interventions in the currency market.”

However, analysts at Cowry Assets Management Plc, a Lagos based investment firm, predicted a moderation in cost of funds due to impact of the inflow of the statutory allocation funds.

Naira to appreciate to N375/$: Financial sector operators have predicted that the interbank foreign exchange rate and the parallel market exchange rate will converge at N375 per dollar, implying further appreciation of the naira to N375 per dollar in the parallel market.

According to Afrinvest Plc, “Our interactions with operators and other stakeholders in the market suggest to us that with rates converging towards the N375/1 retail intervention rate, the apex bank may be eyeing unified FX rates at N380.00/1-N370.00/$ before cutting intervention to give way for a well-functioning interbank market. Nonetheless, this remains unlikely in the interim given the absence of the political will and overarching implication of this on  price-level and public welfare.”

This  optimism followed  last week’s appreciation of the naira to a 7-month high of  N390  per dollar in the parallel market, in response to sustained dollar injection by the Central Bank of Nigeria (CBN).

From N445 per dollar the previous week, the parallel market exchange rate dropped steadily throughout the week to close at N390 per dollar, indicating 12.4 per cent appreciation of the naira.

The huge appreciation was triggered by combination of decline in dollar demand and further injection of dollars by the CBN. Bureaux De Change (BDC) operators told Vanguard there is little dollar demand in the market, while people who had hitherto horded dollar are offering them for sale to avoid further financial loss.

During the week, the CBN injected $264.3 million dollars comprising $181.3 million for 60 days forwards transaction and $83 million to meet customers demand for personal travel allowance, business travel allowance, school fees and other invisible transactions.

The additional dollar sales came on heals of the CBN’s Governor’s vow that the apex would sustained its intervention in the foreign exchange market.

Addressing the press after the Monetary Policy Committee (MPC) meeting on Tuesday, Emefiele warned that those doubting CBN’s ability to sustain the programme would be the losers as, according to him, the rates were already converging.  He said, “We have seen the foreign exchange rates now converging and we are strongly optimistic that the rates will converge further.

“In terms of sustainability, it is important for us to state at this point that reserves are trending upwards, close to $31 billion and the fact that we have done this consistently up to four to five weeks should tell everybody or those who doubt the strength of the CBN to sustain this policy that we are able.

“It remains for me to say that they are taking a risk and are on the wrong side of the bet, given the direction that we are coming from. There is a determination to see to the convergence of those rates.   And with what we have seen so far, we are very optimistic that those rates will converge.”

VANGUARD

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Banking

FIRSTBANK REWARDS CUSTOMERS WITH 170,000,000 WORTH OF CASH PRIZES IN ITS WIN BIG PROMO

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FirstBank, Nigeria’s premier financial institution and leading financial inclusion services provider, has launched the Win Big promo to reward and delight its valued customers. The four-monthpromo, which started on 23 October 2023 and will run till 23 February 2023 will reward several new and existing customers of the Bank with a total cash reward of 170,000,000.00 naira.

At the end of the four-month promo, 1,240 new and existing customers would have been rewarded with N100,000.00 each as each month will have 310 new and existing customers winning N100,000. Up to 40,000 customers who reactivate their dormant account stand a chance to win free airtime as 10,000 customers will be rewarded with free airtime monthly for reactivating their dormant account.

6 customers will emerge lucky winners of N1,000,000 each in the grand finale draw. The promo is open to new and existing savings and current account customers.

To open a FirstBank account dial USSD code *894*0# and follow the prompt or visit the Banks website and click on Open Account”. You can also visit any FirstBank branch near you to openaccount.

To qualify for the N100,000 monthly draw, customers will have to deposit and maintain a minimum amount of 5,000.00 in their account monthly and transact a minimum of 5 times transactions on any of the Bank’s digital channels: FirstMobile, LIT App, USSD, First Online as well as Debit Card transactions.

Customers who are eligible to win N1,000,000 must have a deposit of N50,000.00 monthly for four consecutive months or maintain a minimum deposit of N200,000.00 for four months and transact a minimum of 5 times on any of the Bank’s digital banking channels; FirstMobile, LIT App, USSD, First Online as well as Debit Card transactions to qualify for the grand finale draw.

Customers who reactivate their account(s) are also eligible to win. For reactivating their account, the first 10,000 customers to deposit N1,000.00 and transact on any of the Bank’s digital channels: FirstMobile, LIT App, USSD, First Online and Debit Card transactions will be rewarded with free airtime. Customers who reactivate their dormant account could also qualify for the monthly draw when they deposit and maintain a minimum amount of N5,000monthly and transact a minimum of 5 times on any of the Banks digital channels. They could also emerge winners of N1,000,000 in the grade finale draw if they meet the criteria.

To reactivate account, the customers will have to dial USSD code *894*7# and follow the prompt to reactivate Tier 1 accounts or visit any nearest FirstBank branch for Tier 2 and 3 account reactivation.

“We are thrilled to launch this promo in appreciation of the patronage, trust and loyalty our customers have shown us over the years,” said Ms. Folake Ani-Mumuney, Group Head, Marketing & Corporate Communications, FirstBank Group. The exciting modalities of the promo reflect our commitment to enhancing the banking experience of our customers across any or all of our digital banking services.”

This is the season when FirstBank provides opportunities and platforms for the yearly memorable homecoming experience from across the world. The promo is an enabling opportunity forcustomers, their friends, and families to have exciting, fun-filled, memorable experiences. We encourage our customers to seize this opportunity and participate actively’ she concluded.

For more updates on the promo and other exciting offerings from FirstBank, follow the Bank’s social media handles on – Facebook: First Bank of Nigeria Limited, Instagram: @firstbanknigeria and X (formerly twitter): @FirstBankngr.

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FirstBank Launches The First Humanoid Robot in The Financial Services Industry

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In furtherance to its leading role in providing innovative financialsolutions in Nigeria, First Bank of Nigeria Limited, Nigeria’s premier financial institution and leading financial inclusion services provider, has announced the launch of a Humanoid Robot, the firstof its kind in the financial services space in Nigeria. The robot is equipped with Video Banking and Artificial Intelligence (AI), taking on the role of a friendly branch staff.

The Humanoid Robot can engage customers in conversations as well as through a touch screen strapped to his chest. The services performed by the robot include responding to customer enquiries on cash deposits, withdrawals and ATM cards. The robot also aids complaint management as customers can log a complaint via QR with feedback generated within the advised time. 

The Humanoid Robot also keeps customers up to date with happenings about the Bank, including products launch and upgrades designed to strengthen the customer experience and satisfaction. The robot is a one-stop point to keep customers informed about the Bank. It also effectively manages customers’ accounts.

Expressing his delight at the initiative, Dr Adesola Adeduntan, the CEO of FirstBank Group noted that “the addition of the Humanoid Robot to our state-of-the-art Digital Experience Centre represents a purposeful stride towards transforming the banking landscape in the country and further showcases the priority we give to innovation within the Bank. With its advanced capabilities, the robot is designed to elevate the quality of our customers’ lives in today’s rapidly evolving digital world. Our unwavering dedication to delivering unparalleled banking services remains steadfast, as we leave no stone unturned in innovating to fulfil our customers’ needs.” he concluded.

The introduction of the Humanoid Robot is among the phased configuration of the Bank’s state-of-the-art digitally led self-service branch called Digital Experience Centre, launched in December 2021.

Another Humanoid Robot will also be deployed in the Bank’s next and second Digital Experience Centre, soon to be announced in the coming months.  

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Banking

FIRSTBANK WINS FINANCIAL INSTITUTION OF THE YEAR AT THE AFREXIM BANK PAN-AFRICAN BUSINESS AND DEVELOPMENT AWARDS

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First Bank of Nigeria Limited, Nigeria’s premier banking institution and leading financial inclusion services provider, has won the Financial Institution of the Year Award at the African Export-Import Bank (Afreximbank) Pan African Business and Development Awards. The ceremony marked the 30th anniversary of Afreximbank as it hosted the inaugural Pan-African Business and Development Awards in association with the Business Council for Africa (BCA), in Accra, Ghana.

The award bestowed on FirstBank is in recognition of the Bank as an epitome of the Pan-African spirit through its leading role in promoting trade and investment across the continent which have been instrumental to strengthening the economic and multilateral business relationship across nations.


Mrs. Kanayo Awani, Executive Vice President of Afrexim Bank, presenting the *Financial Institution of the Year* award won by First Bank of Nigeria Limited to Victor Yaw Asante, MD of FBNBank Ghana representing CEO, FirstBank Group at the Afreximbank Pan African Business and Development Awards 2023 in Accra Ghana.

Amongst its role in facilitating transactions across borders, in 2021, the Bank launched its First Global Transfer (FGT) initiative, specifically designed to ensure safe, timely and improved efficiency in the transfer of funds across the network of FirstBank subsidiaries in Africa. The FGT is not restricted to FirstBank Groups Customers alone but it is also open to every individual resident in the country the funds transfer is originating from.  

Speaking on the awards, Dr. Adesola Adeduntan, CEO, FirstBank said: “We thank the organisers of the event (Afreximbank, BCA) for the recognition as it reinforces our commitment to promoting trade, finance and investment opportunities across borders which have been instrumental to the continued growth and development of the continent and the world. On behalf of the Board and Management, this award is dedicated to all employees at the FirstBank Group for their diligence and hardwork as well as to our esteemed customers for their loyalty and patronage in over 129 years of existence he concluded.

 

Also commenting on the awards, Prof. Benedict Oramah, President and Chairman of the Board, who has been at the Bank for over 29 years said: “Tonight we are recognising outstanding leaders and institutions. Having joined the Bank in 1994, I have been fortunate to have worked with many of them At Afreximbank, contributing to Africa’s development is a lifetime vocation, as I know it is for all those that we have recognised tonight.”

In recognising these leaders and institutions, Arnold Ekpe, chair of the BCA and former Group CEO of Ecobank, said: “Too often our business leaders do not get the praise they deserve. Succeeding in business on the continent is not always easy, but it is rewarding and more importantly it is possible to build strong, profitable businesses that are globally competitive. Our winners tonight have demonstrated this.”

FirstBank has consistently been recognised by reputable global organisations for its steady outstanding performance and amongst the streak of recent wins is the award for Best Financial Inclusion Service Provider Nigeria 2023 by Digital Banker Africa as well asBest Private Bank for Sustainable Investing in Africa by Global Finance.

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