E-Financial
Markets Attempt to Find Surer Footing amid Coronavirus Concerns
By Han Tan, Market Analyst at FXTM,
Asian currencies and equities are advancing amid subdued trading volumes on the eve of the Lunar New Year, despite news that the death toll from the coronavirus’ spread has climbed to 25 with new cases being reported in more countries, such as Vietnam and Singapore. Market participants are taking heart from China’s efforts to lock down the epicenter of the outbreak by imposing travel curbs on seven cities and the World Health Organization who held back from labelling the situation as a global health emergency.
With several Asian markets seeing a holiday-shortened trading week ahead, investors will be hoping that the outbreak doesn’t worsen over the coming days. Still, regional markets could see an outsized reaction when trading resumes should pent-up concerns be unleashed if the virus’ spread worsens drastically over the near-term.
However, any such reaction may eventually prove transitory, as long as the still-fragile expectations for a stabilising global economy in 2020 aren’t shattered. Once investors’ fears dissipate, that could allow investors to focus on the more positive, recent news such as encouraging US corporate earnings and macroeconomic data.
Gold, Yen offer muted reaction to coronavirus concerns
In a rather subdued response to the spread of the coronavirus, Gold and the Japanese Yen have seen limited moves over recent days. Bullion prices have refused to stray too far from the mid-$1500 range, while USDJPY appears content trading in the 109 to 110 range.
While not wanting to get too far ahead, fears over a potential pandemic are still supporting risk aversion. As the situation stabilises, investors may gradually eschew safe haven assets in favour of riskier assets in the markets, which should prompt eventual softness in Gold and JPY.
Oil prices set to extend weekly losing streak
Unlike Gold and JPY, Oil traders are more nervous and have reacted more negatively to the viral outbreak. Brent crude dipped briefly below the $62/bbl handle before recovering slightly, but remains on course to mark three consecutive weeks of declines, while winding back most of its gains from December.
Recent price action highlights the notion that demand-side uncertainties are in the driver’s seat when dictating the overall mood in the Oil markets, with investors apparently more willing to brush aside supply-side risks, given recent geopolitical events involving Iran, Iraq, and Libya.
However, from a technical perspective, Brent futures are moving closer to oversold territory. Oil prices could see a rebound once the fears surrounding the coronavirus’ spread begin retreating, allowing for global trade and travel conditions to stabilise. This should act as support for the world’s demand for Oil.
E-Financial
Nigerians Pay Five Levies for Electronic Transactions
A bank customer in Nigeria pays as much as five different charges electronic transactions on one account and Netizens are not happy about it.
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.
- 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
- 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
- Stamp duties
N50 is being charged on transactions between N10,000 and N10,000,000
- 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)
- 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.
E-Financial
AMMBAN Decries CBN Directive on CAC Registration of PoS Operators
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.
E-Financial
UBA Consolidates Gains as Gross Earnings Rise by 110 Percent, Profit Hits N156Bn
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.
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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