Banking Briefs
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THE Nigerian Export-Import Bank, NEXIM Bank, is championing a platform that is meant to encourage the growth of private-sector driven ventures in Nigeria. The bank aims at promoting the diversification of the Nigerian economy and the deepening of the external sector through the provision of credit facilities in both local and foreign currencies, risk bearing facilities, business development, financial advisory services and trade, and market information services. Already, it has initiated a working blueprint spanning from 2010 to 2015, to propel the non-oil sector of the economy to a grand-level.
The bank, in its bid to finance non-oil export, has supported local exporters, mainly the small and medium enterprises, SMEs. NEXIM Bank, which was voted the best development bank in Africa recently, has deepened its commitment to the course of stronger performance of the Nigerian external sector. Under the leadership of Roberts Orya, the bank has budgeted about N42 billion for the manufacturing sector’s financing requirements which is expected to account for at least 3.71 percent of the nation’s gross domestic product, GDP, by 2015. The bank is aware that the only way to harness the attendant potentialities of the private sector-driven economy is regular power supply and to this end, it has scaled up its interventions in the manufacturing, agro-processing, solid minerals and other service sectors.
In Orya’s view, these sectors play the important game of numbers; they hold the opportunities for creation of possible highest number of sectoral jobs, and they have huge potentialities for foreign exchange earnings, adding that with such support from the bank, Nigeria’s manufacturing sector has been growing, thus giving the hope that the unwholesome level of unemployment in the country will soon be a thing of the past. Yomi Tokosi, MD/CEO, Riggs Ventures W/A Plc, said: “NEXIM Bank played a pivotal role in the actualization of the expansion of our polypropylene sacks manufacturing company by providing the guarantee we needed to obtain the dual tranche facility from Nigerian Export-Import Bank. NEXIM Bank also provided us with a medium-term facility for the expansion and renovation of our factory.”
The National Bureau of Statistics, NBS, has also attested to the fact that the performance of the manufacturing sector is consistently being strengthened. According to the NBS, the sector grew by 8.41 percent in the first quarter of 2013 and they have been supportive in the entertainment industry. The bank has been proactive in ensuring sustainable environment in the country. It has been investing in knowledge acquisition, and is currently seeking technical collaboration with other development agencies to help develop carbon finance and climate change mitigation in the country. Although the hope of a global agreement for trading carbon credit from emission cuts will probably not crystallize, but experts believe that funding will continue to flourish.
CIS Honour for An Icon
THE Chartered Institute of Stockbrokers has honoured Otunba Olasubomi Balogun, founder of the FCMB Group, with its Lifetime Achievement Award. The award was in appreciation of Balogun’s contributions to the stockbroking profession in the country. Balogun was the first vice-president of the CIS at its inception in 1990. He is also widely referred to as the doyen of the Nigerian financial sector due to his pioneering role in the emergence of indigenous and entrepreneurial banking in the country.
The bank said in a statement that Balogun, in 1977, founded City Securities Limited which was the first in the country to combine issuing house and stock broking businesses under one portfolio. He was said to have founded the first wholly Nigerian-owned merchant bank, known as First City Merchant Bank Limited, which has progressed in the last 30 years to what is now First City Monument Bank Limited.
The CIS described Balogun as ‘an icon in the financial services industry,’ adding that his contributions to the growth of the Nigeria capital market and the Chartered Institute of Stockbrokers were outstanding and would always be cherished. Ladi Balogun, group managing director, First City Monument Bank Limited, received the award on his behalf.
Rise in Fidelity Bank Foreign Currency Lending
FIDELITY Bank’s exposure to foreign currency lending has risen in recent years. According to Renaissance Capital, RenCap, the lending rose from one percent in 2012 to 27 percent last year. The firm said Fidelity achieved the growth after deploying its foreign currency liabilities as the pressure on funding costs persisted.
The bank’s 2013 result showed that it reported the lowest Net Interest Margin, NIM, in the Nigerian banking industry, reaching a 10-year low of four percent. It said Fidelity’s NIM squeeze started in 2011, when the lender increasingly focused on corporate lending and was subsequently faced with a tightening monetary policy environment.
RenCap said the management has also been re-pricing the existing loan book and plans to periodically review all concessions and lending rates. “We have made slight changes to our forecasts, largely along the lines of modestly higher NIMs and loan growth, the impact of which was offset by higher cost of risk over the forecast period. We expect the stronger growth in SME lending to keep Fidelity’s cost of risk elevated, at two percent, against our previous forecast of one percent over the next few years,” it said.
Compiled by Chinwe Okafor
— May 5, 2014 @ 01:00 GMT
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