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NAICOM Extends Insurance Recapitalization Deadline to Oct. 1

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The National Insurance Commission (NAICOM) on Friday extended the insurance companies’ Tier-based recapitalization commencement date to Oct. 1, as against January 1, 2019, it earlier announced.

Mr Rasaaq Salami, NAICOM’s spokesman, made the confirmation in Lagos.

The confirmation was sequel to doubts expressed by some players in the industry on the adjournment of the recapitalization date.

“The backdate means that operators only have one month and two days to recapitalize,’’ Salami said.

The spokesman said it was imperative for the commission to shift the date in order to re-position the industry for unbeatable performance in the financial sector.

“The commission would not withdraw any license but only ensure that an underwriter has adequate capital to absorb risks,’’ he said.

Salami said after the first guideline on recapitalization implementation was released in July, the Federal Government through NAICOM issued a new circular dated Aug. 14.

The circular according to him, the circular mandated all insurance companies to recapitalize and communicate to NAICOM the tier they intended to play in before Oct. 1.

Salami said that only companies that meet the respective tier requirements shall lead on new businesses in those categories with effect from Oct. 1.

“Companies shall be assessed, in the first instance, on their approved financial statement for 2017, and audited half year account for 2018.

“However, where a company is yet to obtain approval for its 2017 financial statement, its last approved audited accounts will be used for the assessment,” Salami quoted the statement from circular as saying.

Underwriters interested to play in the tier 1 category are expected to increase their capitalization from N5 billion to N15 billion.

The underwriters interested in the same tier but currently operating Life business are mandated to upgrade their capital base from N2 billion to N6 billion.

The Non-Life Insurers that wanted to play in the tier are expected to improve their capitalization from N3 billion to N9 billion.

While Composite Insurers willing to operate in tier 2 are expected to increase their capitalization to N7.5 billion.

Life Operators under tier 2 category are expected to increase capitalization to N3 billion.

However, for insurers willing to play in the lowest tier, which is tier 3, they are expected to maintain the current capital base of the insurance industry.

Non-Life Insurance Firms in tier 3 is to maintain N3 billion; Life Insurance Operators to maintain N2 billion and Composite Insurers are to maintain N5 billion capitalization.


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E-Financial

Nigerians Pay Five Levies for Electronic Transactions

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A bank customer in Nigeria pays as much as five different charges electronic transactions on one account and Netizens are not happy about it.

Nigerians Pay Five levies for Electronic Transactions

Only on Monday, Central Bank of Nigeria (CBN), added another 0.5 per cent cybersecurity levy to be charged on select bank transactions.

However, the apex bank exempted loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, and intra-bank transfers between customers of the same bank from the levy.

Also exempted from the levy were inter-branch transfers within a bank, cheque clearing and settlements, ⁠Letters of Credits, ⁠and Banks’ recapitalisation-related funding only bulk funds movement from collection accounts, savings, and deposits, including transactions involving long-term investments, among others.

But below is the list of charges Nigerians have to pay whenever they make electronic transfers.

  1. Cybersecurity levy

N5 is charged on the transaction of N1,000

N50 is charged on the transaction of N10,000

N500 is charged on the transaction of N100,000

N5,000 is charged on the transaction of N1,000,000

N50,000 is charged on the transaction of N10,000,000

  1. Transfer fee

N10 is being charged on the transaction below N5,000

N25 is being charged on the transaction between 5,001 and N50,000

N50 is being charged on transactions above N50,000

  1. Stamp duties

N50 is being charged on transactions between N10,000 and N10,000,000

  1. Short Messaging Service (SMS)

N4 is being charged on each electronic transfer notification

(Customers who use e-mail-only notification are not charged for this service)

  1. Value Added Tax (VAT)

N0.75 is being charged on the N10 transfer fee

N1.875 is being charged on the N25 transfer fee

N3.75 is being charged on the N50 transfer fee.

 

 


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E-Financial

AMMBAN Decries CBN Directive on CAC Registration of PoS Operators

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Association of Mobile Money and Bank Agents of Nigeria (AMMBAN) has frowned at the recent directive by Central Bank of Nigeria that Point of Sale terminal operators should register with Corporate Affairs Commission by July 7, 2024.

They argued that implementing the directive will put over 70 percent of PoS operators out of business thereby frustrating financial inclusion initiative of the federal government.

Mr. Fasasi Atanda, national president, AMMBAN, said that the directive contradicts the current CBN agent banking regulations which clearly allow individuals to be onboarded as agents under the sub-agent category.

“Currently Nigeria has over 1.8 million agents in which over 70 percent are sub-agents without registered businesses, operating under agent network – super agent arrangements. They are the most penetrating channel of financial inclusion. Now, we want to eliminate them with CAC registration,” he stated.

It would be recalled that the Federal Government through the Corporate Affairs Commission on Monday issued a two-month registration deadline to Point of Sales companies, to register their agents, merchants, and individuals with the commission in line with legal requirements and the directives of the Central Bank of Nigeria.

The agreement was reached during a meeting between Fintechs and the Registrar-General CAC, Hussaini Ishaq Magaji, in Abuja.

Speaking at the meeting, the CAC boss said the measure aims at safeguarding the businesses of Fintech’s customers and strengthening the economy.

He further stressed that the action was equally backed by Section 863, Subsection 1 of the Companies and Allied Matters Act, CAMA 2020 as well as the 2013 CBN guidelines on agent banking.

The CAC boss said the timeline for the registration, which will expire on July 7, 2024, was not targeted at any groups or individuals but genuinely aimed at providing protection for businesses.


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UBA Consolidates Gains as Gross Earnings Rise by 110 Percent, Profit Hits N156Bn

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United Bank for Africa Plc (UBA), Africa’s Global Bank , has released its financial results for the first quarter ended March 31st, 2024, showing very strong growth across key performance measures.

Oliver Alawuba, GMD, UBA Group

The Group’s results, which were released to the Nigerian Exchange Limited (NGX) on Friday May 3rd, 2024, saw outstanding year-on-year increases: Gross Earnings rose by 110%, from N271.1billion to N570.2 billion; Interest Income grew by 130%, to N440.7 billion. Operating Income increased by 115%, from N175.7 billion in 2023, to N378.59 billion.

Further consolidating the record performance delivered in the Group’s 2023 Full Year Audited Financials, UBA again saw Profit Before Tax rising significantly by 155% from N61.7 billion in Q1 2023, to N156.34 billion in Q1 2024; while Profit After Tax jumped from N53.5 billion to N142.5 billion, representing an impressive rise of 165% year-on-year.

Commenting on the results, Oliver Alawuba, group managing director,  UBA, said the Group delivered strong first quarter performance, building on the solid momentum of 2023, as well as the ongoing execution of its long-held strategy of customer focus, geographic diversification and effective risk management and governance.

He said, “Our record Q1 profit before tax was delivered with triple digit gross earnings growth, supported by very strong interest and non-interest income. Fees and Commissions rose by 118% year-on-year on the back of improved efficiencies and continued digital adoption. This has helped drive improvement in efficiency and customer satisfaction, with the Group’s cost-to-income ratio held at 57.8%.”

“The Group’s balance sheet grew steadily with Total Assets increasing by 23% to N25.4 trillion. Customer deposits closed at N18.4 trillion, recording a 23% increase year-on-year, largely attributed to growth in current accounts and savings accounts.”

“Our unwavering commitment to sound governance, robust risk management, and financial strength positions us for continued growth, while we contribute meaningfully to inclusive economic development across our network.”

Also speaking on the performance, Ugo Nwaghodoh,  executive director, Finance and Risk, said the Group’s operating results for the quarter showed the actions taken to enhance the Group’s performance continued to deliver.

He said, “Our first quarter results highlight our relentless customer focus and the strength of UBA’s geographic and product diversification, with good performance across all our regions. We continue to differentiate ourselves across all key financial metrics, with a keen focus on high-quality risk adjusted revenues and cost discipline, while maintaining very sound asset quality.“

“We remain committed to reducing both interest expense and operating expenses and expect to make steady progress as we move through the year toward our stated profitability targets,” Nwaghodoh stated.

United Bank for Africa Plc is a leading Pan-African financial institution, offering banking services to more than twenty-five million customers , across over 1,000 business offices and customer touch points, in 20 African countries and across 4 continents.

With presence in the United States of America, the United Kingdom, France and the United Arab Emirates , UBA connects people and businesses across Africa through retail; commercial and corporate banking; innovative cross-border payments and remittances; trade finance and ancillary banking services.


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