06 Feb

Daily Watch – First Nation hit with fines, Banks get pat on back

  • Lending rates among banks rose by about 100 percent at the weekend as the CBN ended the week with a ₦392 billion auction in treasury bills. This formed part of the regulator’s effort to mop up excess liquidity from the system, as it auctioned ₦30 billion in the 181-day bill, but eventually sold ₦82.619 billion at a stop rate of 18%. It also offered ₦60 billion in 342-day paper and sold ₦309.06 billion at a stop rate of 18.6% due to strong demand. Consequently, the quantity of money in circulation was heavily depleted, stoking a rise in the lending rates among banks, as Open Buy Back (OBB) and Overnight rates soared significantly upward by 550bps each to close at 10 percent and 11.25 percent from five percent and 5.75 percent respectively. Some major fund placers are said to have quoted about 20 percent for overnight placement, but most borrowers were not willing to take at that rate until it ended at the prevailing rates. Markets had opened on Thursday with a surplus liquidity of about ₦467 billion due to an injection of matured treasury bills until the CBN later debited banks for the purchases of ₦302.4 billion in primary market T-bills.
  • Total imports of petroleum products from the United States into Nigeria fell to 2.304 million barrels last year, the lowest in nine years, according to the latest data from the US Energy Information Administration. The country’s imports of petroleum products from the US peaked at 18.688 million barrels in 2014, but plunged to 10.475 million barrels in 2015, indicating a 78 per cent drop from the latest numbers. Premium motor gasoline (petrol), kerosene and jet fuel (aviation fuel) are the major products imported from the US into Nigeria, EIA data showed. Other products imported from the US include liquefied petroleum gas (cooking gas), fuel ethanol (renewable), petroleum coke and lubricants. It was in February 2016 that the US kerosene was last imported into the country, with the volume put at 306,000 barrels. In 2015, Nigeria imported 1.866 million barrels of the US kerosene, up from 1.427 million barrels in 2014. Petrol was only imported into the country from the US in February, October and November last year, totalling 843,000 barrels, compared to 6.866 million barrels in 2014; and 615,000 barrels in 2015. The volume of jet fuel bought from the US dropped to 181,000 barrels last year from 5.093 million barrels in 2015 and 8.81 million in 2014. The NNPC, in its latest monthly report, said it remained the major importer of petroleum products, especially petrol, in spite of liberalisation of petroleum products and government’s intervention meant to ease the marketers’ access to foreign exchange. Marketers have in recent months been relying on supply from the NNPC, which is now responsible for about 90 percent of the importation of the product and sells to marketers at N131 per litre. Nigeria, Africa’s biggest crude oil producer, depends on importation to meet its domestic fuel demand, creating a lucrative market for foreign refiners.
  • The Nigerian Navy has destroyed 40 illegal refineries, equipment and petroleum products valued at ₦3 billion in a special operation in the Niger Delta. The Flag Officer Commanding Eastern Naval Command, Rear Adm. James Oluwole, disclosed this in Port Harcourt on Saturday at the conclusion of the first phase of “Operation River Sweep I.” Oluwole said the operation which began on Jan. 8 and ended Feb. 4 aimed at tackling a spate of oil theft and vandalism of critical oil and gas installations, especially along Bonny–Onne channels in Rivers. According to him, two warships, NNS Ologbo and NNS Burutu, eight gunboats and helicopters participated in the 28-day operation. In his words, “In the operation, two vessels MV Lewis Ejiro and MV Lady Swithin were impounded while 40 illegal refineries, 60 large wooden and speed boats loaded with 5.24 million litres of diesel were destroyed. Other items recovered by troops included three generators, 16 pumping machines, two welding machines, three outboard engines and two hoses.”
  • First Bank of Nigeria, Guaranty Trust Bank, Zenith Bank, Access Bank and the United Bank for Africa have been named among ‘The Top 500 Banking Brands’ of The Banker magazine of the Financial Times and Brand Finance, London, United Kingdom. In a statement on Sunday by the Nigerian Country Representative of the Banker Magazine, Kunle Ogedengbe, First Bank led the four other Nigerian banks in the global ranking. As a result, it was named the ‘Most Valuable Banking Brand in Nigeria.’ With a $301 million brand value, First Bank ranked 357 in the global ranking, leading GTB which ranked 395 with a brand value of $258 million; Zenith Bank ranked 414 with a brand value of $247 million; Access Bank ranked 476 with a brand value of $182 million; and UBA with a brand value of $172 million ranked 487 in the world.
  • The Nigerian Civil Aviation Authority has fined First Nation Airways and one of its pilots ₦33.5 million for violating safety regulations. The regulatory agency said on Sunday that it had through a letter of sanction conveying the penalties, ordered the airline to pay ₦32 million while the pilot in charge of the affected aircraft would pay ₦1.5 million. The NCAA said it discovered during a ramp inspection on First Nation’s Airbus A319 aircraft with registration mark 5N-FNE at the Nnamdi Azikiwe International Airport, Abuja, that the pilot was not in possession of a current medical certificate and neither was it readily accessible. The NCAA said in a statement signed by its spokesman, Sam Adurogboye that “Therefore, the airline has contravened the regulations by allowing a flight crew member to be rostered to operate a total of 16 scheduled flights on the 2nd, 3rd, 4th, 6th, 7th and 8th of November, 2016. These operations were carried out while his medical certificate had expired since the 1st of November, 2016, thereby rendering his pilot licence subsequently invalid from that date. The airline’s spokesman, Rasheed Yusuf said in a statement that it had filed an appeal against the sanctions.