01 Nov

Daily Watch – Abuja Uber drivers have had enough, Access, Diamond report increased profits

  • The CBN plans to sell ₦123 billion worth of Treasury bills to mop up liquidity even as the rates in the secondary market in the last one week have remained relatively stable from previous weeks. Analysts at Capital Bancorp noted that due to current market conditions, rates at the primary auction may close around what was on the secondary market. Data obtained from the CBN website showed that it will auction 91-day bills at 13.5 percent worth ₦45.18 billion, 182-day bills at 16.8 percent worth ₦23.4billion and 365-day bill at 17.5 percent worth ₦54.4 billion. The auction bids will be processed through the Primary Dealer and Market Maker. According to Capital Bancorp, the pooling of bids is necessitated as a result of challenges encountered by the PDMMs in processing a single client’s Treasury bill bid from start to finish on the CBN platform. “Therefore, this approach is being adopted to improve efficiency and serve you better. CBP, however, does not commit that the bid rates proposed above will be successful. Notwithstanding, we would continue to seek alternative investment opportunities to meet your investment needs,” the firm said. The CBN had on August 3, raised ₦245.18 billion ($773.44 million) worth of T-bills to settle short-term obligations. The CBN issued ₦45.18 billion in three-month debt, ₦80 billion of six-month paper and ₦120 billion of one-year bills in a Dutch auction.
  • Communications minister, Abdur-Raheem Adebayo Shittu has said that the FG has commenced the processes for the licensing of broadband services on the 5.4 GHz spectrum bank and allocation of 70/80 GHz band (E-Band), in its efforts to broaden broadband penetration in Nigeria. Broadband penetration in Nigeria recently hit 20.95% while internet penetration is at an all-time high of 47.44%, ranking Nigeria second in Africa. Shittu said there was a need to increase Nigeria’s FDI of $38 billion. In his words, “Through Galaxy Backbone, Government has provided internet access to about 400 MDAs, over 11,000 nodes of wireless LAN to all MDAs at the Federal Secretariat, over 40,000 email addresses for Government officials under the gov.ng & mil.ng domains. This has ensured that government data is hosted locally on a secured website with data backup to MDAs and 200 servers hosting 94 MDAs”. In the area of spectrum management, he said the Ministry has issued and renewed a total of 668 licenses from November 2015 to September 2016, generating about ₦500 million as government revenue.
  • The Jigawa State Government says that it has disbursed ₦650 million as soft loans to some cash crop farmers in 2016 in the state. The state’s agriculture and natural resources commissioner, Kabir Ali, explained that beneficiaries were mostly youths and were grouped into clusters by the government. According to him, the cluster operation is mainly in the production of rice, soya beans, groundnut and wheat. Ali said that the farmers had already started harvesting and some of them had started paying back the loan to the government. The commissioner said that the loan could be paid in cash or in kind by giving out their produce equivalent to the money collected.
  • Over 150 transport service providers working in partnership with Uber in Abuja are on strike over low earnings and poor incentives. Some of them took to Twitter on Monday to express their grievances using the hashtag #UberAbujaStrike. A protester on social media, @ijebuPrincesss, told the Punch that they had made some suggestions to the company to make service delivery easy for both riders and drivers. However, she said the company refused to meet with them to iron out the issues and reach a compromise after email had been sent to the company. According to her, their profits had become insignificant due to the high cost of fueling their vehicles, maintenance and low fares Uber charged Abuja riders.
  • Access Bank has reported a 19 percent growth in its profit before tax to ₦72 billion from ₦60.4 billion for the nine months ended September 30, 2016. The result, according to the bank, was based on enhanced business efficiency as a result of the effective execution of its long-term strategy. Its profit after tax grew by a similar margin from ₦48.1 billion in 2015 to ₦57.1 billion in 2016. Access Bank Group’s unaudited nine-month results released to the NSE also showed gross earnings of ₦274.5 billion, up by seven percent from ₦257.6 billion in the corresponding period of 2015. The growth in gross earnings was driven by 17 percent increase in interest income on the back of continued growth in the bank’s core business, according to a statement from the bank. Similarly, the bank posted 12 per cent growth in income to ₦199.3 billion from ₦178.1 billion in 2015. Customer deposits grew by 25 percent to ₦2.10 trillion from ₦1.68 trillion in December 2015, it added. Its Capital Adequacy Ratio remained strong at 19 percent as of September 2016, well above the regulatory minimum. Commenting on the result, CEO, Herbert Wigwe, said, “Access Bank’s performance in the first three quarters of this year remained strong and consistent, reflecting stable business with the capacity to deliver sustainable returns, particularly during a period underlined by significant macro headwinds.”
  • Diamond Bank has announced a 16.9 percent growth in total assets to ₦2.05 trillion for the nine month period ended September 30, 2016, from ₦1.75 billion posted in the corresponding period in 2015. This was contained in the bank’s unaudited financial statement filed at the NSE. The growth, according to the bank in an accompanying note, was driven mainly by the value of the local currency and growth in customer deposits, which surged 13.6 percent from ₦1.233 billion as at the end of September 2015 to ₦1.401 billion in the review period. Also, the bank grew its loan portfolio from ₦763.634 billion to ₦1.041 trillion, representing 36.4 per cent increase. However, the total gross earnings for the period declined by 26.3 per cent to ₦13.2 billion compared to ₦17.90 billion in the same period in 2015, while its profit before tax shrank to ₦3.5 billion on the back of impairment charges as the bank opted for prudent provisioning by cleansing its books of assets with poor quality. Other highlights of the result showed that Diamond Bank recorded strong growth in non-interest income, which leapfrogged by 38.1 per cent to ₦37.6 billion, while its retail customer base grew to over 13 million. Commenting on the results, Uzoma Dozie, CEO, Diamond Bank, stated that the bank’s modest growth in the last nine months, despite the inclement operating environment, was the result of management’s focus on key strategic projections across the three core segments of retail, business and corporate banking. He noted that the bank would continue to passionately pursue its technology-driven retail strategy to optimise cost and reap predictable bountiful results in the medium to long term.