Shareholders of Ecobank Transnational Incorporated (ETI) have approved a dividend pay-out of $48.2 million earlier declared by the pan-African bank. The dividend pay-out amounted to two cents per share.
The approval was given at the bank’s annual general meeting (AGM) that took place in Lome, Togo, at the weekend. ETI recorded a dip of 68 per cent in profit after tax (PAT) for the year ended December 31, 2015 in line with its warning of revenue drop for the period. ETI was among the five banks that sent profit warnings to the capital market community that revenue growth would be lower than expected due to a combination of low oil prices as weaker currencies hampered economic performance across the continent.
The audited results of the bank showed that profit before tax (PBT) declined by 53 per cent from N86.4 billion in 2014 to N40.6 billion in 2015. PAT dipped by 68 per cent from N65.7 billion to N21.25 billion.
Speaking at the AGM at the bank’s head office in Lome, the Group Chairman, ETI, Mr. Emmanuel Ikazoboh said: “Our financial results were poor and clearly not representative of the earnings potential of our diversified pan- African business model.
“Ecobank reported diluted earnings per share of $0.28, a fall of 83 per cent compared with the $1.69 reported in 2014. Return on total shareholders’ equity was 4.2 per cent in 2015 versus 16.5 per cent the prior year. Profit attributed to shareholders of ETI amounted to $66 million compared to $338 million in 2014.”
On dividends, he said: “I am happy to report that in light of the improvement in the parent company’s profit which increased from $5.8 million in 2014 to $60.8 million in 2015, the board has recommended a total cash dividend of $48.2 million, which translates to a dividend of $0.2 per ordinary shares for the 2015 financial year.”
The board passed a resolution that a nominal value of the ordinary shares of the company be increased from 2.5 US cent per share to 50 US cent per share. This would be done by consolidating every 20 ordinary shares held into one new ordinary share each, and issuing in replacement, new ordinary shares of 50 US cents each
Speaking against this consolidation, a former chairman, ETI, Mr. Sunny Kuku expressed concerns over consolidating the shares and the impact it would have on its share price.
Shareholders of CAP Plc, a subsidiary of UAC of Nigeria Plc, are to receive a total dividend of N1.645 billion for the year ended December 31, 2015, following an impressive performance for the year.
The dividend, which translated to 235 kobo per share, comprises 115 kobo interim, and 120 kobo final.
While the interim had been paid since December last year, the final dividend was approved by the shareholders at the annual general meeting of the company held last Thursday.
CAP Plc recorded a turnover of N7.06 billion and a profit after tax of N2.57 billion. Speaking at the AGM in Lagos, Chairman of the company, Mr. Larry Ettah, Chairman CAP Plc to further improve the brand visibility and accessibility to consumers, they opened additional Dulux Colour Centres in Yola and Gombe and Dulux Colour Shops in Lafia, Ada-George Port Harcourt, Ado-Ekiti, Dugbe Ibadan, Agbor, Suleja, Lugbe Abuja and Jalingo.”
“The company retained its ISO 9001:2008 and 14001:2004 certifications on Quality and Environmental standards respectively as we continued to offer high quality products and services to customers while complying with regulatory requirements and conduct our operations in a healthy and safe manner, ensuring minimal impact on the environment.”
Speaking on the on the outlook for 2016, Ettah said fiscal policy is expected to be largely expansionary as the government seeks to stimulate economic activities and generate employment.
“The year has, however, started on an adverse mode, with acute shortage of foreign exchange. The cumulative effect of the scarcity of forex, falling oil prices, and the resurgence of restiveness in the Niger Delta, which could endanger the production output of 2.2m barrels per day and the continued depletion of foreign reserves pose serious threats to businesses and social activities in 2016.”
The challenging environment notwithstanding, the chairman stated that the board and management of CAP Plc company is alive to these challenges.
“The board and management and of your company is alive to these challenges and have outlined mitigating strategies to ensure that these headwinds do not significantly impact our business negatively in 2016,” he said.
The Senate Committee on Communications has accused some top Federal Government officials of short-changing the country by the reduction of the fine imposed on MTN Nigeria for operational misconduct by the Nigerian Communications Commission.
In a letter entitled: ‘Re: Settlement between NCC and MTN over fine’ and addressed separately to all the government officials in the deal, the committee expressed concern over the agreement for the payment of N330bn reached with MTN instead of the N1.04tn initial fine.
It, therefore, summoned all the parties involved to appear before it on Thursday to explain their role in the deal.
Those summoned include the Minister of Justice and Attorney General of the Federation; Minister of Communications; the Executive Vice Chairman, NCC; Accountant-General of the Federation; Managing Director/CEO of MTN; and Governor of the Central Bank of Nigeria.
The Chairman of the committee, Senator Gilbert Nnaji, also noted with regret that the sanction, which was originally N1.04tn, was initially reduced to N780bn before the final resolution at N330bn.
Nnaji, in the letter dated June 15, 2016, said the entire transaction was fraught with suspected criminal tendencies as it was allegedly perfected in secrecy.
The letter read in part, “As a committee and representatives of the Nigerian people, we are saddened about this development at a time when the Nigerian economy needs all the available capital infusion to bolster it.
“It is our strong opinion that Nigeria has been short-changed in this whole process on account of the ridiculous settlement payment plan coupled with the disparity in the exchange rate regime when the fine was imposed ab initio compared with the current prevailing exchange rate when it was agreed to cut the fine to N330bn.
“We wondered why the NCC should engage in such a negotiation that is tainted with a lot of questionable conclusions without the knowledge of the committee.
“The committee is worried about this development because it is on record that during our last investigative meeting with all the relevant parties to this matter on Thursday, March 10, 2016, the committee was informed that the case was still in court and that it was adjourned till March 18.
“The committee was not aware of the outcome of the court case neither was it privy to any active negotiation that led to the fine being reduced to N330bn.”
The committee described the deal as ridiculous and asked the government officials to bring along documents containing the Presidential directive, which approved that MTN should pay N330bn to the government.
The stock market gained additional N205bn on Thursday after 32 firms made the gainers’ chart. The Nigerian Stock Exchange All-Share Index, therefore, appreciated by 2.14 per cent at the close of trading on the Exchange’s floor.
The NSE market capitalisation soared to N9.784tn from N9.579tn, while the index rose to 28,489.89 basis points from 27,891.96 basis points.
An aggregate of 618.248 million shares valued at N5.41bn were traded in 6,757 deals.
The highest index point attained in the course of trading was 28,489.89 basis points, while the lowest and average index points stood at 27,034.05 and 27,550.38 basis points, respectively.
The stocks of Champion Breweries Nigeria Plc, Unity Bank Plc, Lafarge Africa Plc, Wema Bank Plc and Nigerian Breweries Plc emerged as the top five gainers.
The shares of Champion Breweries appreciated by N0.30 (9.87 per cent) to close at N3.34 from N3.04, while those of Unity Bank gained N0.09 (8.33 per cent) to close at N1.17 from N1.08.
Similarly, Lafarge (WAPCO) shares soared to N83.91 from N78.88, gaining N5.03 (7.29 per cent), while Wema Bank shares appreciated by N0.05 (6.33 per cent) to close at N0.84 from N0.79.
In the same vein, Nigerian Breweries share price recorded a N8.01 (5.99 per cent) appreciation to close at N141.76 from N133.75.
Other gainers were Oando Plc, Cement Company of Northern Nigeria Plc, Zenith Bank Plc, Ikeja Hotel Plc, Axa Mansard Insurance Plc, Neimeth International Pharmaceuticals Plc, Custodian and Allied Plc, Continental Reinsurance Plc, Livestock Feeds Plc, Caverton Offshore Support GRP Plc, Dangote Sugar Refinery Plc, FBN Holdings Plc, Guaranty Trust Bank Plc, Cadbury Nigeria Plc, among others.
On the other hand, 15 stocks recorded losses in their prices. Glaxo Smithkline Consumer Nigeria Plc, Learn Africa Plc, NPF Microfinance Bank Plc, Africa Prudential Registrars Plc and Unilever Nigeria Plc emerged the top five losers.
Other losers were NEN Insurance Company Nigeria Plc, May & Baker Nigerian Plc, PZ Cussons Nigeria Plc, Fidson Healthcare Plc, Vitafoam Nigeria Plc, Diamond Bank Plc, Guinness Nigeria Plc, Tiger Branded Consumer Goods Plc, Union Bank of Nigeria Plc and Access Bank Plc.
As part of efforts to boost activities in the non-oil sector of the economy, the Central Bank of Nigeria (CBN) yesterday unveiled a N500 billion low interest rate non-oil export facility. The banking sector regulator in the guidelines of the: “The Non-Oil Export Stimulation Facility (ESF), said the fund was established to support the diversification of the the economy away from oil and to expedite the growth and development of the non-oil export sector.
According to the guidelines for operating the fund,the CBN will invest in a N500 billion debenture to be issued by Nigerian Export-Import Bank (NEXIM) in line with section 31 of CBN Act.
It further stated that the facility was essentially designed to redress the declining export credit and reposition the sector to increase its contribution to revenue generation and economic development. It will improve export financing, increase access of exporters to low interest credit and offer additional opportunities for them to upscale and expand their businesses in addition to improving their competiveness.
The Nigerian Export – Import Bank (NEXIM) shall be the Managing Agent of the Non-Oil Export Stimulation Facility (ESF). It shall be responsible for the day-to-day administration of the Facility and rendition of periodic reports on the performance of ESF to CBN.
“Facilities with a tenor of up to three (3) years, would be granted at a maximum all-in interest rate of seven and half percent (7.5%) per annum; Facilities with tenor of over three (3) years, would be granted at a maximum all-in interest rate of nine percent (9%) per annum.
“Export of goods wholly or partly processed or manufactured in Nigeria; Export of commodities and services, which are permissible and excluded under existing export prohibition list; Imports of plant and machinery, spare parts and packaging materials, required for export oriented production that cannot be produced locally; Export value chain support services such as transportation, warehousing and quality assurance infrastructure; Resuscitation, expansion, modernization and technology upgrade of non-oil exports industries and; Stocking Facility/Working capital,” the guidelines added.
Furthermore, it stated that the facility shall not exceed 70 percent of the total cost of the project or transaction subject to a maximum of N5 billion. The ESF shall have a tenor of up to 10 years and shall not exceed the 28th of December, 2025. Stocking facility shall be for a maximum tenor of one year with the option of roll-over not exceeding twice. However, this shall attract an additional fee of 0.25 percent per annum of the loan amount and is subject to approval of CBN. Working capital facility shall be for a maximum tenor of one year with the provision of roll-over not exceeding twice. However, this shall attract an additional fee of 0.25 percent per annum of the loan amount and is subject to approval of CBN.
Meanwhile, in a separate circular yesterday, the central bank stated that in other to ensure continuous flow of credit to the export sector at competitive rates, especially against the background of declining export loans and the need to promote sustainable non-oil exports, it has expanded the Export Credit Rediscounting and Refinancing Facilities (RRF) by N50 billion to support the banks in the provision of pre- and post-shipment finance to exporters to undertake export transactions.
To implement the facility, CBN will invest in a N50 billion debenture to be issued by the Nigerian Export – Import Bank (NEXIM) in line with Section 31 of CBN Act. Accordingly, this guideline describes and outlines the revised operational modalities of the RRF towards the provision of a discount window to liquefy the export credit transactions of Deposit Money Banks, thereby improving exporters’ access to export credit at any given time.
According to the CBN, the objectives of the RRF objectives are: to encourage and support banks to provide short-term pre- and post-shipment finance in support of exports by providing a discount window to exports financing banks and therefore improving their liquidity and exporters’ access to export credit; moderation and indirect influence on the cost of export credits to the non-oil sector in order to enhance competitiveness of Nigeria’s exports and thereby assist in export production and marketing; and to enhance the continuous flow of export credits for non-oil exports toward facilitating the diversification of the productive base of the economy and ensuring sustainable external sector development;
Commenting further on the pre-shipment rediscounting facility, it stated: “The objective is to encourage banks to finance incidental expenses necessary to undertake and perform export contracts as well as procurement of inputs / exportable goods, e.g. raw materials / commodities, semi-processed and finished goods for either processing and/or direct exports.”
CAP Plc, a subsidiary of UAC of Nigeria Plc and manufacturer of Dulux, has delivered a N2.17bn profit before tax despite the challenging economic and business environment.
It recorded a turnover of N7.06bn, a growth of one per cent and profit before tax of N2.57bn, which represented an increase of five per cent compared to 2014.
The Chairman, CAP Plc, Mr. Larry Ettah, in his address at the firm’s Annual General Meeting in Lagos, said, “On the strength of this performance, the Board of Directors has recommended a final dividend of N840m representing 120 kobo for every 50 kobo ordinary share to shareholders on the Register of Members at the close of business on May 27, 2016 for consideration and approval.
“This is in addition to the interim dividend of 115 kobo per share paid on December 15, 2015. This brings the total dividend for 2015 financial year to N1.645bn, representing 235 kobo per share.”
On the review of the company’s operations, Ettah said that, “To further improve our brand visibility and accessibility to consumers, we opened additional Dulux Colour Centres in Yola and Gombe and Dulux Colour Shops in Lafia, Ada-George Port Harcourt, Ado-Ekiti, Dugbe Ibadan, Agbor, Suleja, Lugbe Abuja and Jalingo.”
He said the company retained its ISO 9001:2008 and 14001:2004 certifications on quality and environmental standards respectively as it continued to offer high quality products and services to customers while complying with regulatory requirements and conducting its operations in a healthy and safe manner, while ensuring minimal impact on the environment.
On the outlook for 2016, the chairman stated that, “Fiscal policy is expected to be largely expansionary as the government seeks to stimulate economic activities and generate employment. The year has, however, started on an adverse mode, with acute shortage of foreign exchange.
“The cumulative effect of the scarcity of forex, falling oil prices, and the resurgence of restiveness in the Niger Delta, which could endanger the oil production output of 2.2 million barrels per day and the continued depletion of foreign reserves pose serious threats to businesses and social activities in 2016.”
“The board and management of your company is alive to these challenges and have outlined mitigating strategies to ensure that these headwinds do not significantly impact our business negatively in 2016.
As part of its contribution towards the development of entrepreneurs in the country, the Central Bank of Nigeria (CBN) wednesday commenced a three-day training programme for stream one applicants of its Youth Entrepreneurship Programme (YEDP) in the South-west zone.
The central bank explained that the event, which took place in Lagos was one of the activities scheduled to enhance the quality of applications to be funded under the entrepreneurship programme. It said the programme was developed to strategically deploy youthful resources for maximum economic development.
Delivering the welcome address, Director, Development Finance Department, Central Bank of Nigeria, Dr. Mudashiru Olaitan, said the programme, which was aimed at tackling the challenge of youth unemployment in the country, started about three months ago.
Olaitan who was represented by the Head, Development Finance office, Central Bank of Nigeria, Mr. Adebisi Adedeji, said following the opening of the portal after the launch, over 4,000 applicants were received by Heritage Bank Plc, within two months of the first phase, saying that, 1,547 successful applications were selected after the initial screening and that the number constituted the applicants that were benefitting from the capacity building programme nationwide.
He said applicants from other states would be trained from 29th June to 1st July, 2016, adding that as at 15th March,2016 , about 9000 entries were recorded on the portal in various stages of the application process. “I am delighted to welcome you all to this capacity building programme, which is one of the activities scheduled to enhance the quality of applications to be funded under the YEDP,”Olaitan said.
Speaking further, the he said: “This 3-day capacity building programme will expose participants to the rudiments of entrepreneurship and enhance their ability to develop bankable business proposals to qualify for funding. The faculty members were specially selected for their experience and expertise.
“Successful applicants will also benefit from a robust post-disbursement support that includes; peer networking, business development support (BDS), mentoring and attachment programmes where applicable.”
While urging the trainees to make judicious use of the opportunity before them, Olaitan said “I urge you all to seize this opportunity and be innovative in your strive to deliver bankable and realistic bankable business proposal that will avail you the funding opportunity towards actualising your dreams”.
Meanwhile, the Executive Director and Chief Executive Officer, Africa Leadership Forum, Mr Olumide Ajayi, one of the trainers, gave more insight into the programme.
“This programme is an initiative of the Central Bank of Nigeria, NYSC and Heritage Bank to try and help young graduates to begin to pick entrepreneurial skills that can help them to set up their own businesses and also become employers of labour instead of them looking for employment. It’s all part of job creation scheme of the present administration to try and give space and opportunity for young people to begin to exercise their innate ambitions and dreams. Because we know that these young people are very talented and very innovative. So what this programme is set out to do is to give them space to be able to demonstrate also to help the economy,” Ajayi said.
Ten years after Nigeria’s historic exit from the Paris Club of Creditors, the country’s external debt balance has climbed to $10.72bn, up from $3.54bn, investigation has shown.
The Federal Government had between 2005 and April 2007 paid over $15bn to exit from both the Paris Club and London Club of Creditors after receiving a write-off of about $18bn from the former.
For the Paris Club, the payment included the first tranche of $6.3bn made in November 2005, the second tranche of $1.387bn made in December 2005, and the third tranche of $4.498bn paid in April 2006, as well as a commission of over $30m paid to the Central Bank of Nigeria.
For the London Club, the payment included Par Bond of $1.486bn paid in December 2006; Promissory Notes of $512m paid in early March 2007; oil warrants of $82m paid on April 4, 2007 and a commission of 0.5 per cent paid to the CBN.
After the exit from the Paris Club, the country’s external debt came down to $3.54bn as of December 31, 2006, according to statistics obtained from the Debt Management Office.
Over the years, however, the external debt situation of the country had gradually climbed to $10.72bn as of December 31, 2015, according to the DMO.
This means that within the period, 2006 to 2015, the country’s external debt grew by $7.18bn, or 202.4 per cent.
After Nigeria’s exit from the Paris Club, the Federal Government tried to control the expansion of the country’s debt profile by limiting external borrowing to concessionary loans. However, in the last two years, the World Bank has said that the country is capable of borrowing from its commercial lending window.
However, the Federal Government at the same time opened its doors wide to domestic borrowing, which increased within the period after the exit thereby, raising fears that the country could relapse into the debt trap.
Our correspondent reported that the country’s total debt as of December 31, 2015 stood at N12.6tn.
The total debt is made up of the external debt of the federal and state governments and the domestic debts of both.
In terms of segmentation, the external debts of both tiers of government rose from $9.71bn as of December 31, 2014 to $10.71bn as of December 31, 2015. This shows a rise of $1bn or growth rate of 10.37 per cent within the one-year period.
The domestic debt of the Federal Government, which is the biggest component of the total debt, rose from N7.9tn as of December 31, 2014 to N8.84tn ayear later.
This shows that the domestic debt of the Federal Government rose by N932.97bn or 11.8 per cent within the one-year period.
The 36 states of the federation and the Federal Capital Territory held $3,369,911,154.54 of the country’s external debt component, while the Federal Government’s external commitment stood at $7,348,520,340.26.
For 2016, the Federal Government expects to borrow N984bn from domestic sources and N900bn from foreign sources to finance the capital component of the budget.
It also set aside the sum of N113bn as a sinking fund towards the retirement of maturing loans; while N1.36tn was provided for foreign and domestic debt service obligations.
Our correspondent also reported that the Federal Government spent a total of N2.95tn to service domestic debts for a period of five years from 2010 to 2014.
The Nigerian Stock Exchange has announced the expected review of the NSE 30, and the six sectoral indices of the Exchange, which are NSE Consumer Goods, NSE Banking, NSE Insurance, NSE Industrial, NSE Oil & Gas and the NSE Lotus Islamic Indices.
The composition of these indices after the review will be effective on July 1, 2016, the NSE said in a statement on Wednesday. “With the review, we will witness the entry/re-entry as well as exit of some major companies,” it explained.
For NSE 30 Index, the likely new entrants are UACN Plc, Presco Plc, Cadbury Nigeria Plc, FCMB Group Plc and Transcorp Hotels Plc; while Glaxo Smithkline Consumer Plc, Sterling Bank Plc, Fidelity Bank Plc, Diamond Bank Plc and Transcorp Plc might leave the category.
For NSE Consumer Goods Index, the likely income firms are Northern Nigeria Flour Mills Plc, DN Tyre & Rubber Plc, Union Dicon Plc and Premier Breweries Plc. But Vitafoam Nigeria Plc, Tiger Branded Consumer Goods Plc, Honeywell Flour Mills Plc and NASCON Allied Industries Plc are likely going to exit the group.
For the NSE Banking Index, Skye Bank Plc and Unity Bank Plc are expected to come on board, while Wema and Fidelity Bank were penciled to leave the category.
The NSE Insurance Index is expected to take in Consolidated Hallmark Insurance Plc, Law Union & Rock Insurance Plc, International Energy Insurance Plc, UNIC Insurance Plc and Sovereign Trust Insurance Plc. On the other hand, Linkage Assurance Plc, Cornerstone Insurance Plc, Standard Alliance insurance Plc, Universal insurance Company Plc and Equity Assurance Plc are expected to exit the group.
Greif Nigeria Plc and DN Meyer Plc are likely to be absorbed into the NSE Industrial Index, while Avon Crowncaps & Containers Plc, Paints & Coatings Manufacturers Plc would exit.
Japaul Oil & Maritime Services Plc and Eterna Plc are to be admitted into the NSE Oil & Gas Index, while MRS Oil Nigeria Plc and Conoil Plc would exit.
For NSE Lotus Islamic Index, Total Nigeria Plc and Forte Oil Plc are to be admitted, while Lafarge Africa Plc and Chemical & Allied Products Plc would leave the group.
The Nigerian bourse began publishing the NSE 30 Index in February 2009 with index values available from January 1, 2007. On July 1, 2008, the NSE developed four sectoral indices with a base value of 1,000 points, designed to provide investable benchmarks to capture the performance of specific sectors. The sectoral indices comprise the top fifteen most capitalised and liquid companies in the insurance and consumer goods sectors, top ten most capitalised and liquid companies in the banking and industrial goods sector and the top seven most capitalised and liquid companies in the oil and gas sector.
In July 2012, the Nigerian bourse launched the NSE Lotus Islamic index which consists of companies whose business practices are in conformity with Shari’ah investment principles, with the aim of increasing the breadth of the market and creating an important benchmark for investments as the alternative ethical and noninterest investment space widened.
The companies that appear on the Islamic Index have been thoroughly screened by Lotus Capital Halal Investment, in accordance with a methodology approved by an internationally recognised Shari’ah Advisory Board comprising of renowned Islamic scholars.
The new flexible exchange rate policy will be released today (Wednesday), the Acting Director, Corporate Communications of the Central of Bank of Nigeria, Mr. Isaac Okoroafor, has said.
The CBN’ Monetary Policy Committee had on May 24 risen from its bi-monthly meeting and announced plans to adopt greater flexibility in the management of foreign exchange.
Okoroafor, who told our correspondent on Tuesday that the policy would be unveiled on Wednesday, did not elaborate on the modality.
However, our correspondent gathered that the Governor, CBN, Mr. Godwin Emefiele, would release the blueprint during a news conference scheduled to hold at the apex bank’s headquarters in Abuja by noon.
The delay in the release of the details of the policy has led to further depreciation of the naira at the parallel market. It has also made equities to post record losses in the past few weeks.
Experts and stakeholders believe a flexible exchange rate policy is the right way to go for the country.
The Director-General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, had said it would lead to the reduction in the arrears of remittances, which had accumulated for the past 18 months; reduce uncertainty that investors had been grappling with over the last one year; and boost investor confidence as well as attract greater forex inflows to the economy.
The Chief Executive Officer, Financial Derivatives Company Limited, Mr. Bismarck Rewane, who lauded the proposed exchange rate policy, said the development would eliminate the fears that foreign investors had been nursing about the Nigerian forex policy.
According to him, the decision may make the naira to depreciate initially, but it will find its equilibrum price later.
Addressing journalists at the end of the bi-monthly MPC meeting in Abuja last month, Emefiele had said, “The MPC voted unanimously to adopt greater flexibility in exchange rate policy to restore the automatic adjustment properties of the exchange rate. Consequently, all nine members voted to hold and introduce greater flexibility in managing the foreign exchange rate.”
Meanwhile, the looming economic recession in the country may have forced the CBN to postpone the announcement of a new Capital Adequacy Ratio for Systemically Important Banks scheduled to begin on July 1, it has been learnt.
The CBN had in 2014 ordered the SIBs to boost their minimum CAR to 16 per cent from 15 per cent to increase their resilience to shocks.
The SIBs are First Bank of Nigeria Limited, Guaranty Trust Bank Plc, Zenith Bank Plc, United Bank for Africa Plc, Access Bank Plc, Skye Bank Plc, Ecobank Nigeria and Diamond Bank Plc.
The eight financial institutions designated as the SIBs by the central bank were required to hold more liquid assets and a liquidity ratio of 35 per cent.
This meant the affected banks were expected to have a minimum liquidity ratio, which is five per cent above the 30 per cent requirement in the industry.
The new CAR, which was the fallout of the 2009 banking crisis in the country, was scheduled to start on July 1, 2016.
However, the central bank is planning to postpone the rule because the “sensible” thing to do is “reflate the economy and encourage lending,” the Director of Banking Supervision, CBN, Mrs. Tokunbo Martins, told Bloomberg on Tuesday.
She said an announcement on the new date of implementation would be made by the end of the week.
The Federal Government is planning to avoid a recession or mitigate the impact of a looming one by boosting banking lending to stimulate economic growth.
The capital adequacy ratio of nation’s biggest banks declined to 16.6 per cent at the end of April from 17 per cent a year earlier as economic headwinds increased, Martins said.
If the rules had to be implemented at the beginning of next month, it wouldn’t leave “much headroom for proper lending,” she said.
