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COVID-19 redefines bank-customers relationships



images 18 2 COVID-19 redefines bank-customers relationships

“Among the many lessons Nigerians have learnt during the COVID-19 lockdown and its associated social distancing principles, is one that emphasises less human contact and use of virtual tools for banking transactions. This means that customers are going to see a lot more online-based banking activities in the new normal.

“Banks will have to build capacities for online banking with fewer person- to- person interactions. Post-COVID-19, we are going to see less person-to-person human transactions with regards to banking operations , which means, banks would have to invest on digital platforms to deliver financial services with less contacts. So a lot of banking business will go online. That is what we are seeing now.”

Those were the views of a stakeholder in the banking domain as he x-rayed the changing face of banking in COVID-19 era and beyond.

Commenting on Nigeria’s emerging phase of banking relationships, Professor of Capital Markets, Uche Uwaleke, said that COVID-19 and its uncertainties have made many banks to become loan shy, especially when viewed against their asset quality.

“Consequently, it is becoming increasingly difficult for bank customers to obtain credit facilities besides the ones emanating from the CBNs interventions.

“A number of banks are now encouraging their customers to transact online as opposed to using the banking hall.

“In compliance with COVID-19 protocols, the banks now require customers to wait inside a place provided within the premises after they have been issued numbers instead of having them crowd in the banking hall.

“While that creats some sort of orderliness, it leads to a lot of delays in many branches partly because many banks have yet to commence full operations in all their branches”, he added.

Also x-raying the new trend in bank customer relations, Mr. Sotonye Anga, the Managing Director Universal Quest Nigeria, stated that the banking community was going to see transactions reduced because a lot more people will prefer to keep their money in the house rather than putting it in banks. These are the things we will be seeing in the new normal. Banks will see significant loss of revenue during this period and post-COVID-19. The bottomline: it will affect the turnover of banks and transactions because Nigerians are not fully abreast of online banking practices as many still prefer more of brick and mortar physical banking transactions in the country.” Anga was probably not alone, he has a soul mate in the President of the Chartered Institute of Bankers of Nigeria (CIBN), Mr Bayo Olugbemi, who told Daily Sun that since “some of the staff of corporate bodies are still working from home, there would be surge in data and cost (in a bid) to service bank customers.”

His words: “All of us are very much aware that COVID-19 has done a lot of damage not only to the banking sector or the financial sector but to the global economy. We have seen a number of people going to the banks to collect money more from digital channels over the past months, but I am also not surprised that staff are laid off because of how much the pandemic has affected the banking sector. Thank God, the CBN came in to salvage the situation. So far, banks are obeying the rules of engagement released by the authorities as regards social distancing.Definitely, some of these corporates are still working from home and so there would be rise in data and cost to servicing customers of these banks.”

Regarding the fiscal performance of the banks this year, Ike Chioke, the Group Managing Director of Afrinvest West Africa, saw not-so-impressive outing.

According to him, some of these banks will have difficulties at the end of 2020, particularly , in their balance sheet.

Hear him: “I think that we need to come up with a homegrown solution because we often look outside Nigeria and say that, because they are doing that in some countries, then, we should copy their models. We do not have the transparency that the U.S has. Similarly in Europe, they have a proper record of SMEs whereas our SMEs here in Nigeria are vulnerable. Secondly, information is distorted and I think that, what is required is to come up with a homegrown solution based on connecting the society through groups, having leadership from the government and building digital platform to drive businesses.”

All the suggestions, advice and outlook might not be unconnected with the rising COVID 19 cases and deaths in the country. And despite safety measures put in place to protect “systems, employees, customers and stakeholders” in the banks, the sector still looks vulnerable and prone to the pandemic.

In fact, earlier in the year, when the pandemic broke out, several commercial banks had announced fatalities and subsequently shut the affected branches.

For instance, on June 18, a new generation bank had announced the death of one of its staff at Onne branch, Rivers State. Just before that, on March 26, an old generation bank also confirmed the loss of a staff at Kano Main Branch.

Similarly on March 12, another bank shut its Wuse 11 branch Abuja, visited by a deceased COVID 19 patient, while financial services operator whose staff returned from a holiday in the United Kingdom tested positive.

The bank promptly directed the affected staff to embark on self-isolation upon his arrival in the country in line with its policy that mandates staff/family members who have travelled overseas in recent time to self isolate for 14 days and test for the virus before returning to work”.

Commenting on these emerging challenges, Mazi Okechukwu Unegbu, a former bank Chief Executive and past CIBN president, urged Nigerian banks to take a second look at their precautionary measures.

His words: “I knew the guy who died in one of the banks. The point is, were there policies in place to protect the staff of the banks? I am sure there are policies within the banks. But were those policies adequate? If they were adequate, can someone said that the staff observed them? Or they observed them in the breach? Now if they were not adequate, what are the liabilities? First of all, to know whether they are adequate or not, you have to look at what the government has provided. The Presidential Task Force(PTF) on COVID 19, the World Health Organisation (WHO) provisions, now if the banks did not put those things in place, they are sure of liabilities. And if it is taken up in the court, they can not go free. But if they put them in place and they can prove that the staff had not adhered to them, their liabilities will reduce.It is not that that they wont suffer liability because, even when they know that the staff did not obey, and the staff came in and out without following the due process, did you, as their employers, warn them that they didn’t comply with due process? If you did , then you are fair. But if you did not, the bank will still be liable. There is a lot of this belief, particularly in the North, that this COVID 19 is big men’s disease; that it doesn’t kill the poor or the ordinary man in the street. But that is a fallacy. I was reliably told that the markets there are still filled up with people; there is no observance of physical distancing and many of them don’t have face masks; and they are just going about doing things. And there is even no water for them too to wash their hands, even no sanitiser was present.”

I went to a bank (recently). And wherever you have your PoS, you must have sanitiser to sanitise customers’ hands before service because many people are coming to the PoS. But I noticed that in some areas where the bank has PoS, unfortunately, there were no sanitiser. How much does it cost?

That is a serious negligence. And if anybody should take that up, the bank would be in trouble. Almost all the banks, are guilty of this negligence. They are negligent. They advertise but they don’t care for their customers as far as they are making the money. It is unfortunate. My advice is that the banks should go and take another look at their safety measures they put in place. If the safety measures fall below the standards set by WHO; standards set by the PTF on COVID 19 and standards set by the states, I think they should better take a second look. The problem that we have in our country is that people don’t challenge these banks. They do a lot of things and we allow them to go. And even the media do not seem to educate people (on their rights).You are supposed to enlighten us regarding what we are supposed to do. If the people are not aware (of their rights), there is nothing we can do. But if they are aware of basic information from the media, both electronic and print, then people will use it and challenge these banks for their negligence.

“No! it will even help financial inclusion. Are these banks, particularly those in urban areas, really into financial inclusion? They are not because, now, some of the banks, if you go there with N5,000 that you want to open an account, they won’t even listen to you. So what financial inclusion are we talking about?

For Toyin Agbaje, a marketer with one of the banks, the performance in terms of getting new customers has dropped significantly as some of them hardly go out and only come to work twice or maximum of thrice in a week. The banks also have different operational time. Some open 8 a.m to 4 p.m, while some do 9a.m to 3p.m.

“I think financial inclusion, as I keep saying, the best is to give capacity to microfinance banks that are part of the banking system because they are closer to the grassroots ; their operation is not like the conventional banks, except the ones owned by the conventional banks. But the others are like Esusu or ‘ajo’ that we do in the communities. They are close to the people. In fact , the microfinance banks are “ajo” society. They will see you as a person. These days, bankers are now on the internet super highway that you don’t need to even go there.

“So COVID 19 will not discourage customers at all, it will, in fact, help financial inclusion if the customers can challenge banks on their operations.”

Commenting on provision of sanitizers and other safety materials to customers, First Bank’s Group Head, Marketing & Corporate Communications, Mrs Folake Ani-Mumuney, said it was not the responsibility of banks to provide sanitiser at their PoS terminals, but that of the merchants.

Her words: “POS are given to merchants, like Shoprite. And, as you know, Shoprite would provide them hand sanitisers. I think the customer is being mischievous.

“All you need doing is check all the PPE(Personal Protective Equipment), such as temperature gauge, sanitiser, face masks, face shields overalls and social distancing markers that we have in our locations, in our branches’ ATMs etc.

“If a petrol station is using our PoS, we wouldn’t be the one to give them sanitisers nor would we be the one to give agents who carry four or five bank PoS machines sanitiser or the tailor or chemist who has three POS of which one happens to be ours.”

But while commiserating with the banks that lost their staff to the pandemic, the president of Bank Customers Association of Nigeria (BCAN, Dr Uju Ogubunka, called for the total implementation of the cashless Policy with emphasis on online delivery of services:

“May the souls of the faithful who departed rest in peace, Amen. (There is need to intensify the cashless policy, online banking and faster delivery of services that involve peoples’ physical contacts, including reduction in face -to-face marketing, will minimise exposure risk of bankers and customers alike. These are in addition to complying with existing rules.”

Also speaking on the challenges posed to banking sector by COVID-19 pandemic, Mr Kurfi Garba, the Managing Director of APT Securities, said:

“The truth of the matter is that these banks are capitalists and when you are in a capitalist system, what matters is money. A closer look at these institutions will tell you that they have not been fully operational as some of their branches are shut down. Secondly, there is internet banking which some are embracing, while some are not and so the more internet banking services go on, the less these branches opening its halls to Nigerians. That is where the banks can tap into to minimise these deaths from happening.”

However, Professor Segun Ajibola, also a former CIBN President , said banks are not to blame for the deaths of COVID-19 patients in their premises. According to him, “COVID-19 is no respecter of persons.”

He added: “It has been killing politicians and top persons in the country and the world. Banks can not be blamed for the deaths of COVID-19 patients in their premises because, just like other institutions, they can only take measures stipulated by the government.

“The war against COVID-19 is that of everybody just as the government and the NCDC have said. So when a customer of a bank dies of the disease in the bank premises, the bank’s management can only take measures recommended by the NCDC. Banks should continue to disinfect their branches, have temperature gauge, sanitisers, control the crowding in banking halls. The best practice banks can utilise to reduce the spread of the disese is to take proper care of the bank environment through these measures because people from various places come to the banks and you cannot tell what and who they have been exposed to before getting to the bank premises. If a customer who is asymptomatic enters a bank what can the management do? All the bank can do is to take remedial measures. When there is a positive case in a bank, the option is to close the bank, disinfect it, ask the staff to go into self isolation or testing till further notice.

“Banks cannot do more than take adequate precautions and remedial measures because it is an institution.”

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Bearish sentiment strengthen at NSE amid weakening economic indices



images 30 3 Bearish sentiment strengthen at NSE amid weakening economic indices

Nigeria’s stock market again closed lower for the second consecutive week with the trading pattern and negative sentiments revealing selloffs in banking stocks, which pulled down the NSE market capitalisation down by N14 billion week-on-week (w-o-w).

The negative performance was down to profit taking in the shares of Zenith Bank, Stanbic, Ecobank Transnational Incorporated (ETI) and FBN Holdings. This led to the All Share Index (ASI) falling by 0.08 per cent to 25,572.57 points.

Consequently, the Month-to-Date (MtD) gain declined to 1.0 per cent, while the Year-to-Date (YtD) loss increased to -4.7 per cent.

Performance across sectors was mixed although positively skewed as three of six indices trended northward. The Industrial Goods index led gainers, up 0.5 per cent w/w on the back of bargain hunting in CAP (+8.6 per cent). Trailing, the Consumer Goods and Insurance indices rose 0.1 per cent and 0.01 per cent w/w respectively due to price appreciation in Nigeria Breweries (+2.3 per cent) and Wapic (+12.1 per cent).

Conversely, the Oil & Gas index led losers, down 1.0 per cent w-o-w following sell-offs in Oando (-4.2 per cent)while price depreciation in FCMB (-6.4 per cent) dragged performance in the Banking index by 0.7 per cent w-o-w. Finally, the AFR-ICT index closed flat. Reacting to the market performance, analysts who spoke to Daily Sun, attributed the downturn to the weak macroeconomic state of the nation and added that profit taking is likely to persist as the month of September progresses in the midst of profit booking, mismatch of economic policies and negative macroeconomic indices.

This is coming on the back of persistent pressure on consumer prices in August 2020 as headline inflation rose to 13.2 per cent year-on-year (y-o-y) from 12.8 per cent in July, according to the Consumer Price Index (CPI) report published by the National Bureau of Statistics (NBS).

Investigations by Daily Sun show that this is the 12th consecutive rise in inflation and the highest level since March 2018 while the sharp increase in headline inflation was driven by a faster m/m inflation, which was up 10 basis points to 1.3 per cent, the highest since June 2017.

Chief Operating Officer, Ambrose Omordion, explained that the August inflation data came worse than expected at 13.22 per cent, thereby deepening the negative returns of many investment windows. Omordion noted that mixed (positive and negative) sentiments would continue to dominate the market as the month of September progresses in the midst of profit booking, mismatch of economic policies and negative macroeconomic indices.

According to him, this is against the backdrop of the fact that the capital wave in the financial market may persist in the midst of relatively low-interest rates in the money market, high inflation, negative Q2 GDP of 6.1 per cent and unstable economic outlook for the rest of 2020 as government and its economic managers are going front and back with mismatch polices and implementation.

“Also, investors and traders are positioning amidst the changing sentiments in the hope of improved liquidity and positive economic indices which may reverse the current trend. We see investors focusing on portfolio adjustment and rebalancing by targeting companies with strong potentials to grow their Q3 earnings and dividend on the strength of their earnings capacity as the year last quarter is at the corner.

Again, the current undervalue state of the market offers investors opportunities to position for the short, medium and long-term, which is why investors should target fundamentally sound, and dividend-paying stocks for possible capital appreciation for the rest of the year”, He said.

For their part, Cordros Capital, said, “In the absence of a positive catalyst, and given the still uninspiring macro story, we guide investors to trade cautiously in the short term. However, we expect the market might benefit over the longer term on compelling valuations and as investors seek alpha-yielding opportunities in the face of negative real returns in the fixed income market”.

Meanwhile, a total turnover of 1.139 billion shares worth N12.692 billion in 17,109 deals were traded by investors, in contrast to a total of 1.226 billion shares valued at N10.842 billion that exchanged hands last week in 19,529 deals.

The Financial Services industry (measured by volume) led the activity chart with 870.300 million shares valued at N7.863 billion traded in 9,427 deals; thus contributing 76.43 and 61.95 per cent to the total equity turnover volume and value respectively.

The Industrial Goods industry followed with 62.689 million shares worth N1.162 billion in 1,557 deals while the ICT industry recorded a turnover of 50.859 million shares worth N2.552 billion in 619 deals. Trading in the top three equities namely FBN Holdings Plc, Guaranty Trust Bank Plc and Access Bank Plc. (measured by volume) accounted for 353.048 million shares worth N4.018 billion in 3,095 deals, contributing 31.00 and 31.66 per cent to the total equity turnover volume and value respectively.

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CIS, others, to float Securities Institute



images 31 3 CIS, others, to float Securities Institute

The Chartered Institute of Stockbrokers (CIS) in collaboration with three other professional bodies has signed a Memorandum of Understanding (MoU) to establish Chartered Institute of Securities and Investment Management (CISIM) to bring securities dealers and investment managers in Nigeria under one umbrella.

The CISIM’s Bill, which is currently with the National Assembly, will replace the Chartered Institute of Stockbrokers Act 105 of 1992 when passed into law. At the last count, apart from the CIS, the three other professional bodies that signed the historic MoU are the Association of Investment Advisers and Portfolio Managers (AIPM) The Fund Managers Association of Nigeria (FMAN), Association of Issuing Houses of Nigeria (AIHN) with ASHON’s Chairman, Chief Onyenwechukwu Ezeagu, as an observer.

The Chartered Institute of Stockbrokers Act 105 of 1992 , which established the CIS provides that individual operators that deal in securities, including Stocks,Treasury Bills, Bonds, Commodities etc, shall be trained and certified by the Institute. At the moment, certain gaps in the Act are exploited by some individuals to deal in securities without any form of certification and requisite training.

Therefore, the CISIM Bill when passed into law, will bring capital market professionals under a common objective without encroaching on one another’s business, make regulation easier, and enhance global competitiveness.

“We share common goals and there is a need for standardization to enhance our advocacy. The Association of Investment Advisers and Portfolio Managers (AIPM) subscribes to the ideals of the proposed Chartered Institute of Securities and Investment Management (CISIM) in Nigeria.

“ Our collaboration will bring about rapid development of the entire financial system. Nigeria is in dire need of funds for infrastructure development. Substantial part of the fund can be mobilised from the capital market. We implore the National Assembly to hasten the passage of the Bill in the overall interest of the economy “, said the President, AIPM, Prince Abimbola Olashore.

Commenting on the MoU, CIS President, Olatunde Amolegbe, said the proposed bill was nothing unusual, and commended the professional bodies that signed the MOU for sincerity and unity of purpose.

Amolegbe explained that the Securities and Exchange Commission (SEC) and The Nigerian Stock Exchange (NSE), the apex regulator and Self-Regulatory Organization (SRO) respectively, regulate stockbrokers but the ISA provides for individual operators that deal in securities to be certified by the Institute while their organisations are regulated by SEC and the NSE .

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Prestige Assurance extends Rights Issue



images 30 3 Prestige Assurance extends Rights Issue

Prestige Assurance Plc has extended its offer period for its Rights Issue of 13,635,796,006 ordinary shares of 50 kobo each at 50 kobo per share on the basis of 38 New Ordinary Shares for 15 ordinary shares held.

In a notice to the Nigerian Stock Exchange (NSE), it informed dealing members that the offer which was initially scheduled to close last Thursday, September 17 2020, will now close on Wednesday, September 30 2020.

“Dealing Members are hereby informed of the extension of the offer period of Prestige Assurance Plc Rights Issue of 13,635,796,006 ordinary shares of N0.50 each at N0.50 per share on the basis of 38 new ordinary shares for every 15 ordinary shares held as at the close of business on January 31 2020.

The NSE has received a confirmation from the Securities and Exchange Commission (SEC) to extend the offer period by two weeks. With this extension, the offer, which was initially scheduled to close on Thursday, 17 September 2020, will now close on Wednesday, 30 September 2020”, it said.

Shareholders of Prestige Assurance had created additional new 14 billion ordinary shares to create headroom for the new capital raising. It increased its authorised share capital from N3 billion of six billion ordinary shares of 50 kobo each to N10 billion of 20 billion ordinary shares of 50 kobo each through the creation of more 14 billion ordinary shares of 50 kobo each.

They further authorised the Board of Directors of the company to raise capital by way most suitable to the company in line with the recapitalisation requirement of the National Insurance Commission (NAICOM).

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