Nigeria Content Online

Customers of First Bank and GTB yesterday had hard times
transacting business at the banks as their networks broke down. Normal services
were not resumed until after midday, leading to frayed tempers in the banking
halls across Lagos.

The banks have been showing signs of network challenges, either
technology migration induced or just service breakdown. Visits to branches of
the banks showed that the challenges faced by the banks before the long Easter
breakstill persisted, as both had their banking halls filled with aggrieved
customers.

Tough business day

The network challenges made it difficult for customers to
transact business. Mostly affected were those who wanted to withdraw money from
their accounts through the Automated Teller Machines (ATMs), as the banks
continued to accept deposits but could not post them immediately.

Funmi Adekoya, a customer said, “Last Thursday, I was here and
they officially announced to us that they were having network challenges; that
we should bear with them, because their services would be below expectation. I
initially thought it was because of the rush for withdrawals by customers
because of the long break ahead, but a week later, I am surprised that am
starring at even a worse situation.”

Some of the customers were so frustrated they refused to switch
off their phones while some picked their calls, despite caution from the bank
attendants.

“How do you expect me to switch off my phone? Do you know how
long I have been here? So I should not pick my calls? If you don’t want me to
pick my calls, then give me my money and let me go. It is only when you are
rendering your services efficiently that you can expect me to obey your rules,”
a customer told an official in anger.

First Bank, in some of its branches, could not carry out any
transactions for its customers till noon yesterday.

“The network was just restored a few minutes ago,” a bank
attendant at First Bank, Oba Akran branch, said, around 12.20 pm. “It has been
down since morning. We have not been able to make any payments or perform other
transactions,” she said, looking at the crowded hall.

According to her, there was no need heading for another branch.
“The truth is that it is everywhere; it’s affecting all our branches” she
added.

The bank’s hall was filled to capacity, despite the fact that
some customers were turning back, as soon as they sighted the queue. At the
GTBank, it was no different. At 12.30pm however, the banks had begun responding
to customers.

On Wednesday, GTB on Facebook apologised to its customers for
the downtime experienced with its challenges during the Easter holidays.

The bank had said, “We want to sincerely apologise for the
downtime experienced with our Internet Banking Service during the Easter holidays.
We recently migrated to our Superdome Servers, which will provide our e-Banking
Channels with a more robust, secure, stable & reliable platform.

“Over the next few days, you may notice some service disruptions
across certain branches and e-Banking Channels. This is also a result of
Internal Migrations and Platform Reboots. Please be rest assured that our other
e-Channels (ATM, Mobile & GTConnect) will continue to function throughout
this upgrade/ migration. Thank you for your understanding and know that we do
this because we want to serve you better,” the statement said.

The spokesperson for the First Bank, when contacted on phone,
said he was out of Lagos and could not speak on the problem.

Service breakdowns are not totally avoidable. It is not known
when the banks service breakdown would be fully addressed, but customers say
banks should devise a more effective way to address their internal challenges,
without having to put their customers through such extreme discomfort.

Barrick Gold Corp
said it had struck a deal to buy Australian copper miner, Equinox
Minerals, for more than C$7 billion, topping a takeover offer by
China’s Minmetals Resources by 16 per cent.

Already the world’s
largest gold miner, Barrick is looking to bolster its position in
copper, a primary industrial metal, while prices are near record highs.

Toronto-based
Barrick said Equinox had agreed to be acquired for C$8.15 a share, an
8.7 per cent premium over the company’s Thursday closing price.
According to Reuters data, Equinox has about 879.5 million listed
shares, which would make the deal worth nearly C$7.2 billion.

Minmetals earlier
this month offered to buy Equinox for C$7 a share, but the Australian
copper miner called that proposal a low-ball bid. Equinox said it
believes the Barrick bid is superior in terms of price and likelihood
of completion.

Barrick said its
agreement for Equinox prevents the Australian miner from soliciting
superior bids and gives Barrick the right to match any higher offers.
Equinox would have to pay Barrick C$250 million to walk away from the
deal, even if it accepts a higher bid.

Equinox has prime
copper assets in Africa and Saudi Arabia that make it attractive to
larger miners. Its Lumwana copper and uranium mine in Zambia is
Africa’s third-largest copper mine by production and the Jabal Sayid
copper development in Saudi Arabia is due to start production next year.

Barrick chief
executive, Aaron Regent, said the deal would improve the company’s
copper exposure in a strong price environment for the metal, which is
used in construction and industrial applications.

“Combined with our
Zaldivar mine and Cerro Casale project in Chile, this acquisition would
position Barrick with significant production growth potential in two of
the most prolific copper-producing regions of the world,” Mr Regent
said.

As part of its
agreement to be bought by Barrick, Equinox will pull its unsolicited
bid for Lundin Mining. Equinox had been trying to take over its rival
copper miner since February but conceded on Monday that its own
shareholders would not likely have supported the deal.

U.S.-listed shares of Barrick slid 1.4 per cent to $54.85 in premarket trading after the announcement.

Barrick said it has
committed cash and financing in place for the transaction. It expects
the deal to add to earnings per share and cash flow immediately.

Morgan Stanley and
RBC Capital Markets advised Barrick on the deal, while CIBC World
Markets, Goldman Sachs, and TD Securities acted as financial advisers
to Equinox.

Reuters

The Nigerian Stock
Exchange recorded a total loss of N449 billion on equities at the close
of trading activities in March, after recording significant losses of
N260 billion in the preceding month.

The market value of
the 217 listed equities, which opened the month at N8.315 trillion,
closed on the last trading day in March at N7.866 trillion, reflecting
a N449 billion loss or 5.39 per cent decline.

The Exchange
attributed the downturn in stock market activities to the decline in
investors’ confidence, but said efforts are being made to fully restore
confidence in the system.

Femi Oladehin, vice
president and managing director of BGL Limited, an investment bank,
said political risks in the country and the crisis in the Middle East
and North Africa region contributed to the withdrawal of funds by some
foreign investors from the market.

He said uncertainty
remains in the market this quarter because “significant contributors of
trading in the Nigerian market are foreign investors as against local
investors.”

In the mean time,
market watchers have predicted that if elections are peaceful, the
Exchange will start recording stable rebound early May.

Daisy Ekineh, an
executive commissioner at the Securities and Exchange Commission (SEC),
said recently that the SEC’s key plan this year is to deepen the market
by “promoting more listings in the oil and gas, telecom companies,
small scale enterprises, and privatised enterprises.”

Mrs Ekineh also
said that the commission is working on reducing transaction cost in
primary offering and secondary offering in particular to further
attract more companies to the market.

Market turnover

While the official
turnover of transaction for the month is yet to be released, the market
recorded a turnover of 6.5 billion shares valued at N60.61 billion
during February, in contrast to a total of 10.84 billion shares valued
at N104.1 billion exchanged during January.

Aggregate stock
market turnover between January and February were 17.334 billion shares
valued at N164.7 billion exchanged in 259,427 deals.

In the comparable
period during 2010, the market recorded turnover of 16.14 billion
shares valued at N100.8 billion in 429,306 deals.

Measuring by
turnover volume, the Banking subsector was the most active in February
with traded volume of 4.5 billion shares valued at N37.3 billion, while
the Insurance subsector was second with traded volume of 450.23 million
shares valued at N666.9 million. The Maritime subsector was third with
transaction volume of 218.41 million valued at N390.56 million.

Over-The-Counter
bond market, a turnover of 926.1 million units worth N841.05 billion
was recorded in February 2011, in contrast to a total of 875.62 million
shares valued at N801.134 billion exchanged during the preceding month.

Officials of both the World Bank and the African Union (AU) in Addis Ababa have launched the 2011 World Development Report, published by the World Bank.

Sarah Cliff, a World Bank Representative, and Ramtane Lamamra, the AU Commissioner for Peace and Security, represented the two bodies at the occasion.

Presenting the executive summary of the report, which was titled ‘Conflict, Security and Development’, Ms Cliff said it focused on peace, security, conflict, human rights violation, suffering of people, and violence.

“It focuses on development initiative and development in Africa, impact on development and violence, trends of violence and development, forms of violence as it affects development, increased crime, and drug trafficking in Africa,” she said.

Ms Cliff said the report also looked at internal and external pressures on society, among other issues.

“These are the high levels of unemployment, youth recruitment into rebel movements and gangs, and impacts of economic shocks, especially from high prices of food,” she said.

She added that some of the solutions identified by the report include violence prevention between states and citizens, and restoring confidence between groups, societies, organisations, nations and communities.

The report also identifies the role of organisations like the AU Commission which have a regional approach and solution to economic crises beyond individual countries.

Lessons from other lands

She said lessons learnt from Ghana, Liberia, and Mozambique, which recovered from economic shocks, include the use of a bottom-up approach.

“This approach is to empower citizens for economic growth, ensure security, justice reform mixed with traditional institutions, and job creation for the youth. Women agencies should also be incorporated in poverty reduction and eradication programmes, while the strengthening of anti-corruption agencies will ensure judicious use of state resources,” Ms Cliff said.

The World Bank representative said about 1.5 billion people were affected by violence and conflict.

“This means that children of those affected were deprived of schools, decent accommodation, adequate food and water, among other health issues.”

Earlier, Mr Lamamra had said the AU Commission would continue to collaborate with the World Bank, especially in the area of conflict prevention, management, and continental development in general. He gave the assurance that the AU would strengthen its partnership with the World Bank in order to reduce conflict on the continent.

The 58-page report is divided into three parts. Part one focuses on the challenges of repeated cycles of violence, while part two talks about a roadmap for breaking cycles of violence at the country level. The roadmap includes restoring confidence and transforming the instrument that provides citizen security, justice, and jobs.

Part three discusses the reduction of the risk of violence as a direction for international policy, which includes adopting community level programmes designed by country context.

This is the first time the report has been launched in Africa.

NAN

Bankers have expressed optimism that the sector would be better disposed to create new assets by increasing their loan facilities to more applicants this year.

This is because some of the banks in their 2010 year end books have demonstrated that with the intervention of the Asset Management Company (AMCON), they have been able to clear their non performing loans from their books.

This move, they say, would place them in a better position to create new assets, a responsibility they have been shying away from since the industry’s crisis about two years ago.

Investigation reveals that though the banks had sufficient liquidity in 2010, their hesitation to create new assets by granting loan facilities was of huge concern.

Better days ahead

For instance, Stanbic IBTC in its 2010 year end results presentation recently said, “There was significant market liquidity, with resultant reduction in interest rate.” It, however, added that there was “limited investment outlets to channel excess liquidity”.

First City Monument Bank (FCMB), in its presentation of its 2010 financial performance, said it is optimistic that “Asset quality should improve further retail lending, commercial banking, project and structured finance to drive loan growth in 2011.”

The bank said retail business is expected to achieve fully loaded profitability, driven by deposit growth, loan growth, and improved interest rate environment.

One of the major factors that contributed to unusually low yields of banks was the pervading risk averse attitude, such that instead of making loans available to the real economy, banks rather invested in government debt market.

Adesoji Solanke, banking analyst at the Renaissance Capital, an investment bank, is, however, optimistic that the “implementation of AMCON activities in 2011 will increase the ability of banks to provide credit to their customers and promises to reduce volatility in the market”.

Renaissance Capital, in a research note on the industry, said there is a gradual dissipation of banks’ asset quality concerns.

According to it, “Our Nigerian banks’ analyst expects an uptick in lending activity to impact positively on banks’ income in 2011.”

Asset quality concerns in the Nigerian banking space are expected to end soon, when AMCON should have purchased all non performing loans in the sector.

It is expected that the extension of the interbank money guarantee by the Central Bank would improve confidence in the money market, the marginal growth in private sector credits and competition for good quality assets, and the ongoing reforms in the banking industry would help the banks gain more confidence to lend to credible applicants.

The StanbicIBTC Bank has announced the appointment of Sola David-Borha as its new Chief Executive Officer (CEO).

The appointment, which was made today, is with effect from May 1. Ms. David-Borha, who is currently joint Deputy Chief Executive, succeeds Chris Newson, who is taking up a new role as Standard Banks’ Regional Managing Director for West Africa.

Improving
trade links within the African continent is opening new opportunities
for Nigerian businesses to leverage on as commercial activities among
Africans boost the airlines and banking industries.

Jibril
Aku, managing director of Ecobank Nigeria Plc, said trade, which was
formerly restricted to regional blocks, has expanded across the various
trade corridors on the continent.

“Rather
than trade with former colonial masters, we are beginning to see more
trade across regional trade blocks. More countries are trading even
outside their regions, as trade relations improve,” Mr Aku said.

Speaking
on the bank’s regional strategy, Mr Aku said its presence in major
countries on the continent is paying off, as trade between African
countries improve.

“African
economies are still commodity driven. There is a government to
government business between Nigeria and some West African countries
that own refineries. It makes sense to buy refined products from
Cameroun, Ghana, Cote d’ Ivoire, and Senegal rather than from others.
What the government has agreed is that we sell crude to them and import
refined products,” he further said.

Improving trade

He said there is also increase in tourism among African countries.

“People
now go to spend their vacation in some of these countries. But things
will begin to grow faster when raw materials from other countries can
come in as inputs into our factories here,” he said.

African
countries have struggled over the years to improve trade across the
continent and roll back several decades dominated by trade with their
former colonial masters.

The
International Monetary Fund in 1990 classified 75 per cent of countries
in sub-Saharan Africa as having “restrictive” trade policies. This
figure has improved as more African countries open up their economy for
expansion.

Over
the last six years, many Nigerian banks have established presence
across Africa, emerging as major players across sub-Saharan Africa ex
South Africa. Banks like UBA, Access Bank, Zenith Bank, and Diamond
Bank opened subsidiaries in various countries to support continental
trade.

Commodities trading

Ecobank
Transnational Incorporated (ETI), the parent company, has subsidiaries
in 30 countries across Africa. Mr Aku said as things begin to improve,
commodities trading will grow into the bedrock of African economy.

“Because
there are a lot of Africans in the diaspora within Africa, they make
money, which they send back to their families. These are things we
support from the regional trade. Today, movement within Africa is a lot
better”, he said.

Mr
Aku said while the bank works on branch expansion, it was also
exploiting mobile banking as a channel to bring banking closer to the
unbanked population.

“Ecobank
has a licence for mobile banking. So, very soon, you will do your
banking on your mobile phone.We are moving away from brick and mortar
banking,” he added.

He said many Nigerians are embracing alternative channels of banking, as shown by the increasing use of ATM cards.