Connect with us

News

Nigerian Banks Have Highest Cost Base

Published

on

Segun Agbaje, CEO, GTBank
Kindly share this post

Nigerian banks have been discovered to have the highest cost base amongst their peers due to increased levy paid to the Assets Management Company of Nigeria (AMCON) as well as the poor state of infrastructure in the country

According to a report by JP Morgan, “Nigerian banks have higher cost/income ratios versus their Central and Eastern Europe, Middle East and Africa (CEEMEA) bank peers due to lack of necessary infrastructure in form of quality manpower, steady electricity supply, security of physical assets, etc.”

Noting from levies paid by banks to the bad bank that AMCON has risen substantially in recent times, JP Morgan’s analysts in a report on Nigerian banks said, “Higher AMCON levy limits cost/income improvement on our estimates.”

The report noted that contribution to the sinking fund of AMCON has risen to 50 basis points (bps) of total banking assets per annum compared to 30bps previously.

“Following the increase in AMCON levy, we believe AMCON charges will rise 130 per cent year-on-year average 2013 estimate versus 28 per cent year-on-year 2012 audited, adding to the operating expenses growth this year and 11 per cent year-on-year per annum average 2014-16 estimate; between 2013-2016 estimates, we expect AMCON charges to form 11 per cent of Nigerian banks cost base versus five per cent previously.”

Apart from increased operating cost due to contribution into the AMCON sinking fund, JP Morgan analysts say they also expect banks to strive to make up for loss of revenues arising from regulatory pressure on removal of commissions on turnover (COT).

“On average for the banks under our coverage, COT formed 44 per- cent of 2012 actual fee income and 10 per cent of overall revenues; COT will be phased out gradually through 2016 estimates and we believe banks will look to recover this revenue loss via higher focus on fee-yielding transactions and participation in higher-yield financial intermediation.

“However, we estimate average fee incomes as a percentage of total revenues to decline from 24 per cent 2012 actuals to 15 per cent 2016 estimates with a flat year-on-year annual growth in fee income through 16E (following 16 per cent year-on-year 2012 actuals).”

The report which forecast a 25 per cent year-on-year average growth in non-performing loans (NPL) of banks between 2013 and 2016, noted that “recent guidance on NPL development within these banks has remained low; nevertheless for our 2013-2016 estimates forecasts, we have assumed a steady deterioration in the NPL ratio including the 16-17 per cent year-on-year average annual loan growth that we have forecast for these banks for 2013-2016 estimates.

“We see this estimate as conservative but given the lack of a consistent, comparable disclosure from the banks, low economic diversification, tendency to shift lending mix to higher yield categories in 2013-2016 estimates as discussed above. Feedback from channel checks and excesses observed in the past, we prefer to err on the side of conservatism,” the JP Morgan report stated.

Refreshing its ratings and views on shares of four Nigerian banks within its coverage, JP Morgan upgraded Guaranty Trust Bank Plc (GTB) and United Bank for Africa Plc (UBA), from Neutral to Overweight.

FBN holdings and Zenith Bank Plc were on the other hand downgraded. While FBN Holdings was downgraded to Neutral from Underweight, Zenith was downgraded to Overweight from Underweight.

GTB and UBA were named JP Morgan’s “preferred stocks in the Nigerian banks space, each offering an attractive 45 per- cent potential upside to their December 2014 fair values – among the highest within the CEEMEA banks currently.

“While GTB’s valuation (2.0x14E t.book) is at a 33 per- cent premium to the CEEMEA peer average (1.5x 14E), we estimate its offers roughly 60 per cent higher tangible ROE vs. The CEEMEA average (29 per cent 14E in GT – the highest in CEEMEA banks – versus 18 per cent 14E CEEMEA) and nearly double the dividend yield.

“UBA on the other hand offers a 30 per cent higher tangible ROE (of 23 per cent in 14E) on our estimates vs. CEEMEA banks average and a significantly higher dividend yield (10 per cent) for a 33 per cent valuation discount (1.0x14E tangible book) vs. CEEMEA banks.”


Kindly share this post

Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd

News

Trump Threatens More Strikes in Nigeria

Published

on

Kindly share this post

President Donald Trump has warned that the United States could carry out further military strikes in Nigeria if Christians continue to be killed, reigniting a sensitive debate over religious violence and foreign intervention in Africa’s most populous nation.

Trump Threatens More Strikes in Nigeria

President Donald Trump

Trump made the remarks in an interview with The New York Times, published on Thursday, while responding to questions about a US military strike carried out in Nigeria on Christmas Day.

At the time, the US military said the operation targeted Islamic State militants in north-west Nigeria and was conducted at the request of the Nigerian government.

Nigeria, however, described the operation as a joint counterterrorism effort, stressing that it was aimed at armed groups designated as terrorists and “had nothing to do with a particular religion”.

“I’d love to make it a one-time strike,” Trump was quoted as saying. “But if they continue to kill Christians, it will be a many-time strike.”

Pressed on comments by his own Africa adviser that extremist groups such as Islamic State and Boko Haram have killed more Muslims than Christians in Nigeria, Trump acknowledged that Muslims were also victims but insisted that Christians were being targeted disproportionately.

“I think that Muslims are being killed also in Nigeria. But it’s mostly Christians,” he said.

Trump has repeatedly raised alarms about the safety of Christians in Nigeria, beginning in late October when he warned that Christianity faced what he described as an “existential threat” in the country. He has accused Nigerian authorities of failing to adequately protect Christian communities and has openly threatened US military intervention if the violence continues.

Nigeria has firmly rejected claims of systematic persecution of Christians. The government maintains that the country’s security challenges are complex and largely driven by insurgency, banditry and criminal violence rather than religious targeting.

With a population of more than 230 million people, Nigeria is almost evenly divided between Christians, who are concentrated mainly in the south, and Muslims, who predominate in the north. Islamist insurgencies, particularly Boko Haram and its offshoots, have plagued parts of northern Nigeria for more than a decade, killing thousands and displacing millions.

Nigerian authorities have repeatedly pointed out that militant attacks have claimed the lives of both Muslims and Christians, arguing that framing the violence along religious lines oversimplifies the crisis and risks inflaming tensions.

Following Trump’s earlier threats, the Nigerian government said it was willing to continue cooperating with Washington in combating terrorism but rejected language suggesting that Christians alone were under threat.

The latest comments are likely to strain diplomatic relations further, as Nigeria balances its partnership with the United States against concerns over sovereignty, security cooperation and the portrayal of its internal conflicts on the global stage.


Kindly share this post
Continue Reading

News

OpenAI Launches ChatGPT Health

Published

on

Kindly share this post

OpenAI maker of ChatGPT is rolling out a health-focused feature to the generative artificial intelligence (AI) tool that’s used by nearly a billion users.

Named ChatGPT Health, the new feature aims to provide users with health and wellness information. This, as health is one of the most common ways people use ChatGPT, according to OpenAI.

In a blog post, Microsoft-backed OpenAI says de-identified analysis of conversations show that over 230 million people globally ask health and wellness-related questions on ChatGPT every week.

ChatGPT Health will also “securely” connect medical records and wellness apps to ground conversations with a user’s own health information, making responses more relevant and useful.

“Designed in close collaboration with physicians, ChatGPT Health helps people take a more active role in understanding and managing their health and wellness – while supporting, not replacing, care from clinicians.”

According to OpenAI, health information is often scattered across portals, apps, wearables, PDFs, and medical notes making it hard to see the full picture, and people are left to navigate a complex healthcare system on their own.

“ChatGPT Health builds on these so responses are informed by your health information and context. You can now securely connect medical records and wellness apps – like Apple Health, Function, and MyFitnessPal – so ChatGPT can help you understand recent test results, prepare for appointments with your doctor, get advice on how to approach your diet and workout routine, or understand the trade-offs of different insurance options based on your healthcare patterns.”

According to the company, ChatGPT Health is designed to support, not replace, medical care, adding that it is not intended for diagnosis or treatment. “Instead, it helps you navigate everyday questions and understand patterns over time – not just moments of illness – so you can feel more informed and prepared for important medical conversations.

“To keep your health information protected and secure, Health operates as a separate space with enhanced privacy to protect sensitive data. Conversations in Health are not used to train our foundation models. If you start a health-related conversation in ChatGPT, we’ll suggest moving into Health for these additional protections.”

OpenAI adds that access to ChatGPT Health has started with a small group of early users to learn and continue refining the experience, adding that users with ChatGPT Free, Go, Plus, and Pro plans outside of the European Economic Area, Switzerland, and the UK are eligible.

“As we make improvements, we plan to expand access and make Health available to all users on web and iOS in the coming weeks.

“Medical record integrations and some apps are available in the US only, and connecting Apple Health requires iOS.”


Kindly share this post
Continue Reading

News

Kaspersky Shares AI Cybersecurity Predictions for 2026

Published

on

Kindly share this post

Kaspersky experts outline how the rapid development of AI is reshaping the cybersecurity landscape in 2026, both for individual users and for businesses. Large language models (LLMs) are influencing defensive capabilities while simultaneously expanding opportunities for threat actors.

Deepfakes are becoming a mainstream technology, and awareness will continue to grow. Companies are increasingly discussing the risks of synthetic content and training employees to reduce the likelihood of falling victim to it. As the volume of deepfakes grows, so does the range of formats in which they appear.

At the same time, awareness is rising not only within organisations but also among regular users: end consumers encounter fake content more often and better understand the nature of such threats. As a result, deepfakes are becoming a stable element of the security agenda, requiring a systematic approach to training and internal policies.

Deepfake quality will improve through better audio and a lowering barrier to entry. The visual quality of deepfakes is already high, while realistic audio remains the main area for future growth.

At the same time, content generation tools are becoming easier to use: even non-experts can now create a mid-quality deepfake in just a few clicks. As a result, the average quality continues to rise, creation becomes accessible to a far broader audience, and these capabilities will inevitably continue to be leveraged by cybercriminals.

Online deepfakes will continue to evolve but remain tools for advanced users. Real-time face and voice swapping technologies are improving, but their setup still requires more advanced technical skills. Wide adoption is unlikely, yet the risks in targeted scenarios will grow: increasing realism and the ability to manipulate video through virtual cameras make such attacks more convincing.

Efforts to develop a reliable system for labelling AI-generated content will continue. There are still no unified criteria for reliably identifying synthetic content, and current labels are easy to bypass or remove, especially when working with open-source models. For this reason, new technical and regulatory initiatives aimed at addressing the problem are likely to emerge.

Open-weight models will approach top closed models in many cybersecurity-related tasks, which create more opportunities for misuse. Closed models still offer stricter control mechanisms and safeguards, limiting abuse.

However, open-source systems are rapidly catching up in functionality and circulate without comparable restrictions. This blurs the difference between proprietary models and open-source models both of which can be used efficiently for undesired or malicious purposes.

The line between legitimate and fraudulent AI-generated content will become increasingly blurred. AI can already produce well-crafted scam emails, convincing visual identities, and high-quality phishing pages.

At the same time, major brands are adopting synthetic materials in advertising, making AI-generated content look familiar and visually “normal.” As a result, distinguishing real from fake will become even more challenging, both for users and for automated detection systems.

AI will become a cross-chain tool in cyberattacks and be used across most stages of the kill chain. Threat actors already employ LLMs to write code, build infrastructure, and automate operational tasks.

Further advances will reinforce this trend: AI will increasingly support multiple stages of an attack, from preparation and communication to assembling malicious components, probing for vulnerabilities and deploying tools. Attackers will also work to hide signs of AI involvement, making such operations harder to analyse.

“While AI tools are being used in cyberattacks, they are also becoming a more common tool in security analysis and influence how SOC teams work. Agent-based systems will be able to continuously scan infrastructure, identify vulnerabilities, and gather contextual information for investigations, reducing the amount of manual routine work.

“As a result, specialists will shift from manually searching for data to making decisions based on already-prepared context. In parallel, security tools will transition to natural-language interfaces, enabling prompts instead of complex technical queries,” adds Vladislav Tushkanov, Research Development Group Manager at Kaspersky.

 


Kindly share this post
Continue Reading

Trending