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Finance experts
have praised the fact that banks’ books are improving by the quarter,
although they expressed concern with the efficiency ratios especially
the cost-to-income ratio.

Some banks recently
released their half year results, with highlights on loan growth
reflected on decision to preserve capital, retail and corporate banking
loan growth resilience, funding costs significantly lower, improvement
in their profit levels and asset quality, among others.

Sterling Bank’s
profit before tax for the half year rose to N4.2 billion from a loss of
N6.9 billion in June 2009 while UBA’s gross earnings fell to N93.7
billion in the corresponding period from the N109 billion for 2009.

Yemisi Edun, the
chief financial officer, FCMB, said in a statement that the bank hopes
to leverage on its efficiency levels for better profitability.

“The group showed
improvement in its performance quarter -on -quarter. This was largely
driven by recovery in our net interest margins and growing momentum in
non- interest income.” Devendra Puri, an executive director with
Sterling Bank said the second half of the year should reinforce the
trend seen in the first six months.

“Internally, we
will remain focused on efficiency and keeping our cost-income match
within an acceptable range. Our results show that the structural
improvements we introduced in the bank last year are bearing desired
results. Externally, we expect to see growth in net loans and advances
as well as a lifting of the pressure on interest margins driven by
events in the wider economy with a payoff on earnings and shareholder
returns. By and large, we are confident that Sterling Bank will
continue to consolidate on the gains of the first half of the year.”

Solid results

“In summary, we
believe that these were a solid set of results with the bottom-line
coming in ahead of expectations” said Kato Mukuru, Director, Head of
African Research, Renaissance Capital, an investment bank. Mr. Mukuru
added that the passage into law of the Asset Management Company (AMC)
bill should assist in freeing up some capital for banks to grow.

Some analysts say
during the 2010 half year period under review, that the low interest
rate regime had a negative impact on the appeal of the money market and
deposit-taking but that in the same time, a slight improvement in
macroeconomic indices showed evidence of a return of confidence among
businesses and consumers.

They however say
financial institutions were mostly cautious on credit expansion with a
deliberate containment of exposure to the capital markets, energy
products trading and real estate sectors as well as lower and mid-tier
business borrowers.

“We are however
optimistic that Second half, 2010 will give rise to better performance
as we expect recoveries in the economy to positively impact the banking
sector” an analysts at Afrinvest, a finance advisory firm said.

Business confidence in South Africa slipped in July on signs the
economy is still struggling to gain momentum after last year’s
recession, a survey showed on Thursday. The South African Chamber of
Commerce and Industry said its business confidence index edged down to
84.3 points in July from 84.8 in June as euphoria from the soccer World
Cup hosted by the country faded.

Some operators in
our nation’s capital market yesterday commended the courage of the
Securities and Exchange Commission (SEC) to wield the big stick against
the former Director General of the Nigerian Stock Exchange (NSE), Ndi
Okereke-Onyuike, and the former council president, Aliko Dangote.

Emeka Nwosu,
President, Independent, Shareholders Association of Nigeria (ISAN),
said the removal will restore investors’ confidence in the capital
market. Tope Fasua, managing director of an Abuja-based capital market
management firm, Global Analytic Consulting, described the removal of
the two as a positive development and a breath of fresh air for
investors.

“Ndi
Okereke-Onyuike’s exit, in particular, would mark a new beginning for
the nation’s capital market,” Mr Fasua said. “In situations like we
have in the market, where investors lost investments valued at several
billions of naira as a result of clear instances of manipulation of the
market by managers, it is good to clear the table and start afresh,” he
said on telephone from Dubai.

On steps to restore
confidence, Mr Fasua urged Nigerians not to expect the recovery of the
market in the short term, rather he advised investors to begin to think
in the long term, to allow enough time for the rehabilitation of the
market. “This will afford major investors – major oil companies,
telecoms operators – enough time for re-education on how the market is
going to work to attract more liquidity to the market,” he explained.

Esan Ogunleye, a
former registrar of the Nigerian Institute of Bankers (NIB), also said
the decision will boost the country’s risk and credit ratings as well
as the status and stature of the capital market.

Describing the
decision as long overdue, Mr Ogunleye said, over the last one year,
investor confidence has been on a downward trend, though it stabilised
briefly in the first quarter of this year. “After that, despite a loss
of two to three per cent in the capital market, it rose gradually and
flattened towards the end of that quarter, after recovering between 20
to 30 per cent capacity. Ever since, it has been spikes and falling.
With the sack, one can imagine what the investor confidence would be,”
he noted.

Namdeb will invest $1 billion in the next 10 years to extend the life
of its diamond mining operations near Oranjemund in Namibia, the 50-50
joint venture between De Beers and the Namibian government said on
Thursday. Namdeb hopes the investment, partly self-financed and partly
via funds from banks, will extend its diamond operations in the coastal
area to 2050. The company also said it expected to produce 500,000
carats of diamonds this and next year from its onshore operations.

The vice-chairman of Egypt’s main state wheat buyer said on Thursday he
hoped Russia would honour existing wheat contracts after Moscow said it
was temporarily banning grain exports. Egypt is the world’s largest
wheat importer, and General Authority for Supply Commodities has signed
contracts for the purchase of 540,000 tonnes of wheat from Russia for
delivery between August 1 and September 10. Russian Prime Minister
Vladimir Putin, who announced the ban earlier on Thursday, is seeking
to keep inflation in check after the worst heatwave on record ravaged
crops. “If a decision is issued and it is an official decision the
Russian government has to … allow (buyers) to implement the contracts
that have been completed, then ban any other contracts after August
15,” said Nomani Nomani, chairman of Egypt’s GASC.

The management of Oando Plc said, on Thursday, it had secured loan facilities worth N60 billion from 13 banks to fund growth.

Oando, which is listed in Lagos and Johannesburg, said First Bank,
Guaranty Trust Bank and Stanbic IBTC Bank were the lead arrangers for
the financing, which takes the form of a 5-year medium-term note.

The Zamfara State
government is collaborating with the federal government in the
execution of a N16 billion project to facilitate the transfer of water
from Bakalori Dam to Gusau water works, to find a lasting solution to
the perennial water scarcity in the state capital.

Kabiru Marafa, the
Commissioner for Water Resources, said the project would be jointly
funded by the federal and state governments.

Mr Marafa said that
apart from providing sufficient water supply to Gusau, the state
capital, and environs, six other local government areas, Maradun,
Talata Mafara, Maru, Bakura, Anka and Tsafe would also benefit from the
project.

He said the project was conceived by the state government in 2007, but suffered some delays owing to bureaucracy.

A new law to drive private participation in government business in Cross River state is now in place.

This is the
public-private-partnership (PPP) law that is expected to woo the
organised private sector. Governor Liyel Imoke, while giving his assent
to the PPP Law 2010, said it will give fillip to public private
partnership in the state as well as “create an enabling environment for
transparent process, opportunities for participation, and clear
regulatory framework for the partnership to develop.” The law seeks to
create the legal and institutional framework to facilitate and regulate
the financing, development, and maintenance by the private sector of
some public enterprises and services.

Mr Imoke revealed
that the state is the first state in the country to embark on the
process by providing the necessary statute to guide it and “will
continue to create an enabling environment with clear understanding of
working together with the private sector to develop its economy.” He
also expressed gratitude to the federal government for “its support in
working out the policies of the law,” and commended all those who
played significant roles to ensure the realisation of the law.

Mr Imoke declared
that the implementation of the law is with immediate effect, and called
on ministries, departments and agencies to study it in detail. He asked
them to set up PPP units in their offices because all PPP projects will
be executed in consent with the law which is very critical, adding that
more PPP contracts will be seen in the state in the 2011 fiscal year.
“This will go a long way to relieve the pressure on our capital budget
and addressing the resource gap that has always been a burden to us,”
he said. “We are on the verge of a fast tracking of our growth and
development in Cross River State.”

Fidelis Ugbo, the Secretary to the state government, said the PPP
law will fast track private sector participation and bring about a boon
in economic activities. Mr Ugbo described the law as a milestone in
business development, adding that it has given the right signal to the
private sector in the state and others who want to invest.

The Association of
Nigerian Exporters (ANE), on Thursday, called for the termination of
the contract of Price Waterhouse Coopers, the company handling the
Export Expansion Grant (EEG) computation.

It said the contract should be handed over to Nigerian Export
Promotion Council (NEPC). The President of ANE, Joseph Idiong, said the
NEPC should process the contract “since it is the agency appointed by
law to manage the EEG.” Mr Idiong said the measure was imperative,
because from January 2006 to date, NEPC had trained its staff to take
over the handling of the EEG process from the consultant.