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CBN, SEC approve Aceess Bank request to acquire Diamond Bank

By News desk

After weeks of announcing their merger, Access Bank and Diamond Bank Plc have obtained approval in principle from Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) to fast-track their fusion.

Access Bank Executive Director, Personal Banking, Victor Etuokwu, who disclosed the approval on Tuesday in Lagos, said that CBN and SEC had granted both banks approval in principle for the merger process to commence.

Etuokwu said that the banks were awaiting the final approval which would be granted after convening shareholders meeting.

“So far, we have gotten approvals up to approval in principle. There are three approvals that we need for this process.

“The first one is the pre-order approval which is like the first approval, the next approval is the approval in principle.

“The final approval comes after approval in principle and it will come after you have convened your shareholders meetings,’’ Etuokwu added.

He said that the banks would convene shareholders meetings in February, noting that the approval would be taken to court once approved by the shareholders.

Etuokwu said all the processes including final approval would be completed in the next 60 days.

He said that the new bank would remain committed to retail and corporate banking to drive financial inclusion for desired growth and development.

“We need to invest in retail market to drive economic growth, this is what the new bank will do, a strong corporate and a strong retail bank,’’ he said.

On staff retrenchment, Etuokwu said that members of staff would be retrained for different roles in case of overlapping.

“Staff will be retrained for new roles where there are overlaps, one of the branches can be converted to an e-branch or Automated Teller Machine (ATM) gallery,’’ he added.

Diamond Bank official in charge of Retail banking, Robert Giles, said that integration of both banks had commenced for seamless service delivery.

Giles said that ATMs of both banks could be used by customers at no cost, noting that they were committed at taking costs away from customers.

Mr Herbert Wigwe, Access Chief Executive Officer, at a joint news conference recently said it had already finalised terms and obtained regulatory approvals for a Tier II capital issuance to raise 250 million dollars available for draw down in January 2019.

He said that the bank had also obtained “No Objection’’ from the CBN to undertake a Rights Issue to raise up to N75 billion or 207 million dollars in the first half of 2019.

Wigwe said that shareholder approvals and other regulatory approvals to that effect would be obtained before the offer opens.

He noted that the fund raising exercise would accelerate the capital management plan to support retail growth previously set out in the bank’s five-year strategy.

Wigwe said that the bigger entity was ready to absorb the staff of Diamond Bank at the completion of the deal by end of Jun, without any disengagement.

German bank link to Panama Papers raided

By Newsdesk

Police raided six Deutsche Bank offices in and around Frankfurt on Thursday over money laundering allegations linked to the “Panama Papers”, the public prosecutor’s office in Germany’s financial capital said.

Investigators are looking into the activities of two unnamed Deutsche Bank employees alleged to have helped clients set up offshore firms to launder money, the prosecutor’s office said.

Around 170 police officers, prosecutors and tax inspectors searched the offices where written and electronic business documents were seized.

“Of course, we will cooperate closely with the public prosecutor’s office in Frankfurt, as it is in our interest as well to clarify the facts,” Deutsche Bank said, adding it believed it had already provided all the relevant information related to the “Panama Papers”.

The news comes as Deutsche Bank tries to repair its tattered reputation after three years of losses and a drumbeat of financial and regulatory scandals.

Christian Sewing was appointed as chief executive in April to help the bank to rebuild. He trimmed U.S. operations and reshuffled the management board but revenue has continued to slip.

Deutsche Bank shares were down more than 2 percent by 1409 GMT and have lost almost half their value this year.

OFFSHORE LINKS

The investigation was triggered after investigators reviewed so-called “Offshore-Leaks” and “Panama Papers”, the prosecutor said.

The “Panama Papers”, which consist of millions of documents from Panamanian law firm Mossack Fonseca, were leaked to the media in April 2016.

The prosecutors said they are looking at whether Deutsche Bank may have assisted clients to set up offshore companies in tax havens so that funds transferred to accounts at Deutsche Bank could skirt anti-money laundering safeguards.

In 2016 alone, over 900 customers were served by a Deutsche Bank subsidiary registered on the British Virgin Islands, generating a volume of 311 million euros, the prosecutors said.

They also said Deutsche Bank employees are alleged to have breached their duties by neglecting to report money laundering suspicions about clients and offshore companies involved in tax evasion schemes.

The investigation is separate from another money laundering scandal surrounding Danish lender Danske Bank, where Deutsche Bank is involved.

MTN shares rises after $8.1bn dispute settlement intensified

By Newsdesk

Shares in Mobile telecommunication giant, MTN Group, has surged 4 percent barely 24 hours after Central Bank of Nigeria, CBN announced that final decision has been reached on the $8.1 billion MTN Nigeria repatriation.

The stock rose yesterday as much as 4.1 percent before trimming gains to trade 2.14 percent higher at 87.6 South African rands.

According to traders, the rise is due to the announcement by CBN that the sanctioned placed on the telecommunication firm in August due to ongoing dispute could soon be lifted.

“Looks like there’s something that going to be finalised in Nigeria and the share price is reflecting that,” said Ryan Woods of Independent Securities.

Another trader hinted that the disputed amount could be reduced by the Nigerian Apex bank.

US, China stocks gains, dollar weaker as Democrats win House

By News Desk,

Wall Street stock futures and Asian shares held earlier gains on Wednesday after Democrats won control of the U.S. House of Representatives, boosting the party’s ability to block President Donald Trump’s political and economic agenda.

The Democrats’ House win creates a clear hurdle for Republicans to easily pass legislation through both chambers of Congress, clouding the outlook for some of Trump’s key economic proposals.

In Asian trade, major broadcasters projected the Democrats would wrest House control, while the Republicans were seen retaining the Senate.

While both outcomes were broadly in line with market expectations, a reason markets did not sell off, the prospect of political gridlock creates some uncertainty for investors. The dollar weakened against most of its major counterparts.

In equities markets, U.S. S&P500 futures ESc1 rose 0.3 percent, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3 percent and Japan’s Nikkei gained 1.2 percent

“It has clearly become difficult for Republicans to pass additional tax hikes or amendments to Dodd-Frank regulations (on financial institutions) for instance,” said Tomoaki Shishido, fixed income analyst at Nomura Securities.

Investor sentiment had been volatile in Asian trade with stocks and the dollar swinging on the Republicans’ fluctuating prospects of retaining the House.

While a split Congress would put a brake on Trump’s agenda, such as tax cuts or deregulation, some investors think the Democrats may agree to more spending.

“There are still areas with compromise for spending, so even with a split government I expect more fiscal stimulus ahead. There is some possibility for compromise on infrastructure spending as well,” said Steve Friedman, New York-based senior economist at BNP Paribas Asset Management.

“If there is additional fiscal stimulus, it suggests that fiscal policy is more of a tailwind for U.S. growth and it should, all things equal, be supportive for stocks.”

On the other hand, many investors also expect Trump to continue to take a hard line on tariffs, which he can impose without Congressional approval. That keeps alive worries about a trade war between China and the United States.

Trump’s massive tax cut, enacted in December, and a spending agreement reached in February have helped lift the U.S. economy, but they have also widened U.S. federal budget deficit.

As a result, Treasury supply has been growing, pushing U.S. bond yields higher.

The election results pushed down the 10-year U.S. Treasuries yield about 2 basis points to 3.193 percent, off its seven-year high of 3.261 percent touched a month ago. But the debt market also remains under pressure from this week’s record volumes of longer-dated government debt supply.

Oil prices were soft after a 2 percent fall the previous day, with U.S. crude futures hitting an eight-month low as Washington granted sanction waivers to top buyers of Iranian oil and as Iran said it has so far been able to sell as much oil as it needs to.

U.S. West Texas Intermediate (WTI) crude CLc1 futures traded 0.5 percent lower at $61.91 a barrel having hit a low of $61.31 on Tuesday, the weakest price since March 16.

In the currency market, the dollar dipped on the U.S. election results. Against the yen, it was 0.2 percent lower at 113.23, reversing earlier gains to one-month high of 113.82 yen.

The euro rose 0.3 percent to $1.1467 and the British pound gained 0.3 percent to $1.3140, hitting a three-week high.

Sterling extended gains made the previous day on hopes of a Brexit deal breakthrough after Brexit Secretary Dominic Raab said “Thumbs Up” on his way out of a cabinet meeting.

That helped sterling recover losses following remarks from a senior member of the Northern Irish Democratic Unionist Party earlier that it looked like Britain would exit the EU without a deal.

China open to talk trade with US – VP

By News Desk, with Agency Report,

A top deputy to Chinese President Xi Jinping said Beijing remained ready to discuss a trade solution with the U.S., but cautioned that the country wouldn’t again be “bullied and oppressed” by foreign powers.

Vice President Wang Qishan — one of China’s best-known economic reformers — told Bloomberg’s New Economy Forum in Singapore that trade was still the “anchor and propeller of China-U.S. relations.” Wang prefaced his support for talks — a refrain Chinese leaders have repeated for months — with a warning about the dangers of “right-leaning populism” and “unilateralism.”

“The Chinese side is ready to have discussions with the U.S. on issues of mutual concern and work for a solution on trade acceptable to both sides,” Wang told the crowd of more than 400 business and political leaders Tuesday. “China will stay calm and sober-minded and embrace greater openness to achieve mutual benefit and win-win results.”

Still, Wang — a long-time friend of Xi’s — said that China had been “bullied and oppressed by imperialist powers” and must “blaze its own trail.”

Wang was speaking the day after Xi pledged at a Shanghai trade expo to further open his country’s markets, while taking a few veiled swipes at U.S. counterpart Donald Trump. The rare speech by Wang comes amid an effort by top Communist Party leaders to reassure global investors spooked by the U.S.-China trade war and a deepening slowdown in the world’s second-largest economy.

‘Dig In Their Heels’

While Trump has asked cabinet officials outline the terms of a possible deal with Xi, Bloomberg News reported Friday, Chinese officials have given no indication they are ready to meet key U.S. demands, such as halting forced technology transfers or rolling back support for state-owned enterprises. On Monday, Trump told a campaign rally in Fort Wayne, Indiana, that he still believed he and Xi could settle the dispute.

The Shanghai Composite Index fell 0.7 percent Tuesday, trimming last week’s rally. The yuan weakened as much as 0.16 percent to 6.9240 per dollar in offshore trading after its best week since March.

“We’re going to see these two sides continue to dig in their heels — both sides still think they have the upper hand,” Scott Kennedy, deputy director of China studies at the Center for Strategic and International Studies in Washington, told Bloomberg Television. “For President Trump, even though he’s signaling that it’s possible they want a deal, there’s actually no monster benefit to him economically or politically. So I think they’ll continue to do this dance and all of us will continue to watch.”

Diplomatic Talks

Even as the U.S. and China spar over everything from tariffs to American support for the democratically run island of Taiwan, the two sides have sought to preserve broader ties. Secretary of State Michael Pompeo and Secretary of Defense James Mattis announced Monday that they would host their Chinese counterparts Friday in Washington for a regular diplomatic and security dialogue.

Wang was introduced Tuesday by former New York City Mayor Michael Bloomberg, the founder and majority owner of Bloomberg LP. The company owns both Bloomberg News and Bloomberg Media Group, which organized the New Economy Forum.

‘Rising Populism’

The Chinese vice president, who was making his third overseas trip since assuming the government’s No. 2 post in March, used the speech to express concerns about growing populist sentiment. He said the trend, along with rapid technological advances and global demographic shifts, demanded a new approach to global governance.

“We are facing the challenge of rising populism and unilateralism,” Wang said. “Such rapid changes have split some countries and societies. The polarization of right-leaning populism has manifested itself in political demands, which has led to unilateral policies against globalization and seriously affected the international political ecosystem.”

Wang, who last year retired from China’s supreme Politburo Standing Committee, has been called on to handle some of China’s most difficult tasks over the years. From 2012 to 2017, he oversaw Xi’s unprecedented crackdown on corruption, which ensnared more than 1.5 million officials including the country’s former top general and ex-domestic security chief.

‘Trumpian Rhetoric and Disaster’

Wang also helped set up China’s first investment bank with Morgan Stanley in the 1990s. He maintains close ties with prominent Wall Street figures, including former Treasury Secretary Hank Paulson, another NEF attendee. He has also played a more diplomatic role, receiving foreign dignitaries, including Stephen Bannon, Trump’s former chief strategist.

Peter Mandelson, a former U.K. trade representative in Brussels and chairman of Global Counsel, told an NEF panel discussion on trade Tuesday that China must take a more active role, if it wanted to preserve global governance bodies such as the World Trade Organization.

“China has to do very, very much more than it is in taking the initiative and exercising that responsibility in stepping up to the plate in helping everyone else lead a reform process in the WTO,” Mandelson said. “If we don’t see China doing that, then you are going to see more Trumpian rhetoric and disaster.”

CBN pumps $337m, Chinese Yuan into FOREX market

By Business Desk,

In another round of intervention, the Central Bank of Nigeria (CBN), on Friday, injected over 337 million dollars in the Inter-Bank Foreign Exchange (Forex) market.

The CBN also intervened to the tune of 53.44 million Chinese Yuan in the Spot and Short tenured forwards of the inter-bank foreign exchange market.

The CBN spokesman, Mr Isaac Okorafor, in a statement in Abuja said that the move was in furtherance of the bank’s commitment to ensuring adequate liquidity and stability in the inter-bank foreign exchange market.

The Bank had on Tuesday injected 210 million dollars in the Inter-Bank foreign exchange market.

Meanwhile, the Naira maintained its steady rate against major currencies around the globe, exchanging for N362 to a dollar in the Bureau De Change segment of the market on Friday.

UBA hits gross earning of N374b

By Business Desk,

The United Bank for Africa Plc has announced its unaudited 2018 Third Quarter Financial Results with impressive growth in Gross Earnings of N374.8 billion.

The performance represents a 12.3 per cent increase when compared to N333.9 billion recorded in the corresponding period of 2017.

According to the bank’s report filed at the Nigerian Stock Exchange (NSE) UBA’s net operations improved 1.7 per cent year-on-year to N227.7 billion, when compared to N224 billion achieved in the similar period of 2017.

UBA’s operating expenses increased by 2.3 per cent to N149.1 billion, compared to N145 billion recorded in the same period of last year.

The bank posted a Profit Before Tax of N79.1 billion whilst Profit After Tax stood at N61.7 billion.

Local media reports noted that the profit performance puts the bank’s annualized return on average equity at 16 per cent and 20 per cent at pre-tax and post-tax profit level respectively.

The report added that the bank continues to maintain a very strong balance sheet, with total assets of N4.51 trillion, an impressive 10.8 per cent year-to-date rise over the N4.07 trillion total asset recorded as at December 2017.

The report stated that the Group Managing Director/CEO, UBA Plc, Mr. Kennedy Uzoka, said: “We achieved a number of strategic imperatives during the quarter and committed more investments in the future of the business – building a solid foundation for a sustainable and superior return to our shareholders.”

Uzoka said that he was pleased that the Bank’s Virtual Banking Chatbot, Leo, which debuted on Facebook earlier in the year, was successfully launched on WhatsApp during the quarter.

“This new channel offering, which enables our customers to fulfill their banking transactions through simple chat commands, is another premier initiative in our suite. The early pay-offs are quite compelling – recent customer acquisitions and broader transaction volume growth are exciting leading indicators that reinforce our confidence in these novel channels,” he said.

Flour Mill, Presco record loss as market indicators drop by 0.08% at NSE

By Business Desk,

The Market indices of the Nigerian Stock Exchange (NSE) dropped marginally on Tuesday by 0.08 per cent, reversing the previous day’s gain.

The All-Share Index dipped by 27.26 points or 0.08 per cent to close at 32,417.70 compared with 32,444.96 achieved on Monday.

Similarly, the market capitalisation, which opened at N11.844 trillion, shed  0.08 per cent to close lower at N11.834 trillion against N11.844 trillion on Monday.

Unilever recorded the highest price loss of N3 to close at N42 per share.

International Breweries trailed with a loss of N2 to close at N30.50, while Nigerian Breweries also lost N2 to close at N88 per share.

Northern Nigeria Flour Mills declined by 60k to close at N5.90, while Presco dropped 35k to close at N53 per share.

Conversely, Nestle led the price gainers’ table with a gain of N5 to close at N1,405 per share.

Okomu Oil Palm followed with a gain of N2.60 to close at N75.80, while CAP gained N1.55 to close at N30 per share.

Cadbury added 65k to close at N10.30, while Guaranty Trust Bank grew by 45k to close at N37 per share.

The volume of shares traded grew by 189.29 per cent in spite of the drop posted by the market indicators.

Consequently, investors exchanged 349.53 million shares worth N1.46 billion in 2,832 deals.

This was in contrast to the 120.82 million shares valued at N1.34 billion achieved in 2,662 deals on Monday.

Royal Exchange Assurance dominated trading activities, accounting for 231.65 million shares worth N48.65 million.

FCMB Group followed with 26.22 million shares valued at N44.61 million, while Guaranty Trust Bank traded 12.29 million shares worth N450.19 million.

Fidelity Bank exchanged 11.37 million shares valued at N20.64 million, while Zenith International Bank sold 6.63 million shares worth N144.89 million.

Insurance stocks top losers’ table in September

By Business Desk,

The recapitalisation exercise recently announced by the National Insurance Commission (NAICOM) took a toll on insurance stocks in September with majority of them recording price depreciation.

Data obtained from the Nigerian Stock Exchange (NSE) in Lagos showed that insurance equities dominated the losers’ table with Universal Insurance emerging the worst performing stock.

Universal Insurance emerged the worst performing stock in September in percentage terms with a loss of 42.50 per cent to close at 23k per share.

It was trailed by AXA Mansard Insurance with 23.53 per cent to close at N1.95, while Cornerstone Insurance dipped 20 per cent to close at 22k per share.

Flour Mills shed 19.35 per cent to close at N20, while Cement Company of Northern Nigeria (CCNN) lost 18.12 per cent to close at N25.30 per cent.

Other top losers were Lafarge Africa, Niger Insurance, Royal Exchange Assurance, Japaul Oil and NAHCO.

Consequently, the All-Share Index during the period shed 2,082.08 points or 5.97 per cent to close at 32,766.37 compared with 34,848.45 achieved in August.

Also, the market capitalisation which opened at N12.722 trillion lost N760.12 billion or 5.97 per cent to close at N11. 962 trillion.

On the other hand, Union Diagnostic was the best performing stock in percentage terms during the period under review with a growth of 30.77 per cent to close at 34k per share.

UACN Property came second with 24.20 per cent to close at N1.95, while C & I Leasing increased by 20.80 per cent to close at N3.02 per cent.

Other top gainers were Unity Bank, Regency Alliance Insurance, First Aluminum, Sterling Bank, Veritas Kapital Assurance, Neimeth and AIICO Insurance.

In all, the volume of shares traded dropped by 23.15 per cent as investors bought and sold 4.15 billion shares worth N 65. 10 billion in 62,693 deals.

This was against a turnover of 5.40 billion shares valued at N66.92 billion traded in 68,906 deals in August.

Commenting on the performance of the market, Prof. Sheriffdeen Tella of the Economics department, Olabisi Onabanjo University, Ago-Iwoye, Ogun, told NAN that the insurance recapitalisation exercise contributed to the losses recorded by some insurance stocks.

Tella said the market was largely bearish and was caused by the withdrawal of funds from foreign sources.

“The portfolio investment is more often than not dominated by foreign investors who react easily to world prices and withdraw or inject fund at will.

“There is the need to encourage more local investors, particularly corporate investors like multinationals in telecommunication and hospitality subsectors through some incentives.

“This also has a way of deepening the market, building confidence and making the market more active,” he said.

Tella said trading activities would likely be bullish in the current month when compared with September on macroeconomic stability and full implementation of the 2018 budget.

Garba Kurfi, the Managing Director, APT Securities and Funds Ltd. said the peaceful conduct of primary election by the major political parties would likely boost foreign investors’ confidence.

Kurfi expressed optimism that the peaceful conduct of primaries would enable foreign investors to predict the direction of 2019 general elections.

Also speaking, Ambrose Omordion, the Chief Operating Officer, InvestData Ltd. , attributed the development to increased sell-off caused by heightening political risk ahead of the 2019 general elections.

Omordion said the political risk seemed outside the control of traders and regulators which made investors to tarry.

He added that the tardiness in the implementation of the 2018 capital budget contributed to the loss posted by the market during the review period.

According to him, mixed economic data released within the period by the Central Bank of Nigeria (CBN) and the National Bureau of Statistics (NBS) contributed to the development.

Omordion said the recent decline in the inflation rate to 11.23 per cent in August from 11.14 achieved in July, after 18 consecutive months of steady decline signaled a rise in the price of food items.

NSE suspends Skye bank trading

By Business Desk,

The Nigerian Stock Exchange (NSE) on Friday officially notified the investing public that Skye Bank Plc shares would be suspended from trading on Sept. 24.

The exchange gave the notice in Lagos in a statement by Olumide Orojimi, Head, Corporate Communications and Godstime Iwenekhai Head, Listings Regulations.

NSE said that the action was taken following the revoking of the operating licence of the bank by Central Bank of Nigeria (CBN).

The exchange said that the decision was pursuant to the “Rules on Suspension of Trading in Listed Securities, Rulebook of The Exchange (Issuers’ Rules).”

It stated that further developments would be communicated as appropriate in due course.

CBN after revoking the bank’s licence transferred its assets and liabilities to a newly licensed bridge bank called Polaris Bank.

Godwin Emefiele, CBN Governor, said at a news conference in Lagos that the decision was due to failure of its shareholders to recapitalise the bank.

Emefiele, however, said that the purpose of the CBN’s intervention in Skye Bank on July 4, 2016 had been achieved.

He said that the focus of the action then was to save depositors’ funds and to ensure that the bank continued as a growing concern, being a systemically important bank.

“Part of our intention was also to stem the imminent job losses to staff if a liquidation option had been adopted.

“These objectives have been fully achieved and the bank has been able to meet customer obligations, having curtailed the liquidity haemorrhage and restored depositor confidence.

Indeed, the bank’s performance has improved considerably compared to the pre-July 2016 era”, he said.

Emefiele said that the result of its examinations and forensic audit of the bank showed that the bank required urgent recapitalisation.

According to him, the bank can no longer continue to live on borrowed times with indefinite liquidity support from the CBN.

“As a responsible and responsive regulator and in consultation with the Nigerian Deposit Insurance Corporation (NDIC), we have decided to establish a bridge bank, Polaris Bank, to assume the assets and liabilities of Skye bank.

“The strategy is for the Asset Management Company of Nigeria (AMCON) to capitalise the bridge bank and begin the process of sourcing investors to buy out AMCON,” Emefiele said.

He, however, assured all depositors that under the arrangement, their deposits shall remain safe and that normal banking services shall continue in the new bank on Sept. 24.

The CBN governor said the arrangement was to enable customers to transact their businesses seamlessly.

He said that all customers of Skye Bank shall be automatic customers of the new bank and their accounts and records duly purchased by Polaris Bank.

NDIC has sold Polaris Bank to the Asset Management Corporation of Nigeria (AMCON) with the mandate to stabilise the bank as well as return it to profitability for the purpose of selling it to interested Investors.

Consequently, AMCON will inject N786 billion into Polaris Bank to bring it’s net value to zero.