THE NATION WEDNESDAY, AUGUST 29, 2012
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MONEY
Banks seek foreign help to curb fraud T
O stem fraud, banks are contemplating offshore partnership with their counterparts abroad, The Nation has learnt. Data from the Nigeria Electronic Fraud Forum (NeFF) showed that banks lost N1.15 billion to internal and external frauds between April and June. Speaking at the NeFF August meeting in Lagos, the Chairman of the Forum, Emmanuel Obaigbena, said the planned partnership with foreign banks has become exigent because of global dimension of funds. Besides, he said NeFF is collaborating with the Economic and Financial Crimes Commission (EFCC) and the judiciary to effectively fight the scourge. He added that the forum was also working with Nigeria Inter-Bank Settlement System (NIBSS) to enhance the fraud reporting format in banks. For the cash-less policy and electronic payment system to work, members of the forum in charge of operations and information commu-
Chief Technical Officer, Digital Encode, Seyi Akindeinde, explained that internet and mobile banking constitute the most frequent avenues through, which frauds are perpetrated. He said internal fraud constituted only nine per cent of the fraud cases but amounted to N900 million while external fraud accounted 91 per cent of the cases totalling N250 million. The Group Managing Director, United Bank for Africa, Phillips Oduoza, represented by Executive Director, Operations and In-
Stories by Collins Nweze
nication technology in their respective banks, must be proactive, he said, adding that banks must disclose fraud related cases in order to learn from one another. Obaigbena said: “It is advisable for banks to give accurate data on fraud cases. They should not be scared of sharing statistics with each other. We have already set up a committee to sanction erring banks. The objective for this Forum is for banks and the relevant agencies to share data with a view to eliminating frauds in the industry. The Head, Financial System Strategy (FSS) 2020, Toyin Jokosenumi, said the forum’s activities would check fraud in the industry. He was also optimistic that NeFF activities would assist in the realisation of Nigeria’s dream of evolving an International Financial Centre (IFC), the high point of the FSS 2020 programme. The FSS chief explained the background, vision and objectives of the strategy, saying other
NEPAD targets $1b for youth empowerment • CBN Governor Sanusi Lamido
countries, such as Dubai, Singapore and Malaysia, which adopted similar model were reaping the benefits.
• Lagos State Governor, Babatunde Fashola (right) receiving a Corporate Governance Award from the President, Governing Council of the Institute of Directors of Nigeria, Mr. Thomas Chukuemeka Awagu during a visit to the governor at Alausa, Ikeja.
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HE New Partnership for Africa’s Development (NEPAD) is to raise $1 billion to support investments in agricultural research for development among unemployed youth. The National Director, Information and Mobilisation, NEPAD Youth initiative, Prince Clement Enweremadu, made this known during the launching of CISTrade for Peace, Unity and Development and signing of Memorandum of Understanding (MoU) between Youth Initiative, in Lagos. Enweremadu, who is the initiator of Collaboration, Initiation and Stabilisation (CIS) framework, said the NEPAD Youth Initiative would empower young and talented individuals through trade in agricultural produce and other commercial ventures. According to him, NEPAD’s emphasis on agricultural produce for trade among other commercial ventures, will enable Nigeria achieve food security as a nation. He said the provisions of CIS trade for peace, unity and development framework was procedural, adding that it is the coming together of stakeholders in the identification of local products packaging agencies like the Federal Institute of Industrial Research, Oshodi (FIIRO), Nigerian Export Promotion Council, Nigerian Customs Service (NCS) and others. “These collaborations shall en-
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ENAISSANCE Capital (RenCap), an investement and finance firm, has expressed worry over what it calls the shrinking deposits of Ecobank Transnational Incorporated (ETI). In an e-mailed report obtained by The Nation, RenCap said it was impressed by the lender’s stable deposit mix and improved Net Income Margin (NIM) but expressed anxiety about the bank’s shrinking deposits and integration cost pressures, which will become more pronouced in the second half of this year. RenCap downgraded its forecasts for the bank this year, pointing out that the Net Income Rate (NIR) is likely to disappoint relative to its initial forecasts. The target price for the bank’s shares was also reduced from
N16.4 to N15.5 per share, but it maintained its buy rating for the lender. RenCap said the key to unlocking value in ETI lies in turning around the bank’s business following its acquisition of Oceanic Bank. RenCap said ETI’s reported half year 2012 financials indicated that loan growth was slower at three per cent quarter on quarter as against five per cent quarter on quarter growth delivered in the first quarter of 2012. It said: “This brought the year to date growth to eight per cent. On the other hand, the deposit book shrunk by two per cent quarter on quarter, which lowered the year to date growth from seven per cent in the first quarter of 2012 to five per cent. The deposit mix was unchanged, with term representing 24 per cent. “Income statement showed that Net Interest Margins (NIMs) continued to improve, rising to 6.2 per cent in first half of 2012 from
six per cent in the first quarter of 2012 and 5.4 per cent in fiscal year 2011, largely due to flat funding costs and modestly improved asset yields. “Asset quality showed impairment charges were up by 13 per cent quarter on quarter and 79 per cent year on year to $44 million. “The impairment expense ratio increased to 1.1 per cent from1.0 per cent in the first quarter of 2012. The group’s non-performing loans (NPL) ratio improved to 5.6 per cent from the 6.5 per cent recorded in the first quarter, while its coverage ratio stayed flat at 67 per cent,” RenCap said. The report indicated that tax rate was 31 per cent, which compares with 31 per cent in the first half of 2011, 25 per cent in fiscal year 2011 and 30 per cent in first half 2012. Return on assets and return on equity improved to 0.8 per cent and 9.9 per cent from 0.6 per cent and 7.4 per cent in the first quarter of 2012, respectively.
able us set industrial centres in all the states in Nigeria where youths shall be trained in different internationally recognised systems of farming, and other economic oriented practice,” he explained. The National Director of Information and Mobilisation, further disclosed that NEPAD Youth plans to embark on exchange programmes with the international community, especially the Federal Republic of Germany, which includes importation of equipment to enhance product handling and packaging to boost trade. According to Enweremadu, NEPAD Youth shall embark on a sensitisation programme in Europe, Asia and America starting from November. He appealed to corporate organisations to support the CIS Project to enable it achieve it objectives. He stated that the scheme would help provide sustainable framework on trade for peace, unity and development, which is about the identification, packaging and marketing of Nigerian products locally and internationally. “CIS Framework was an all-encompassing product, which will identify made -in -Nigeria products, resources nationwide and markets locally and internationally as well as ensuring packaging that meets international standards,” Enweremadu said.
‘Economic performances in rapid-growth markets decline’
Ecobank’s deposits E ‘shrinking’ says RenCap • Price forecast lowered
formation Technology, Femi Olaloku said the creation of the NeFF and the drive to migrate payment transactions to electronic platform creates a great opportunity for the banking industry and the economy. These, he however, said come with the threat of electronic fraud. According to him, fraud not only translates to operational risk losses to banks it erodes the confidence of the public in electronic platforms/systems as a channel for transacting business.
CONOMIC development in the 25 leading rapid-growth markets (RGMs), including Nigeria, has been slow since the beginning of the year, according to Ernst & Young’s quarterly report. It, however, described the development as “a temporary setback.” Senior Economic Adviser to Ernst & Young, Carl Astorri said RGMs are well placed to weather the major risks facing the global economy because they have the space to relax fiscal and monetary policy. This, he said, has already happened in some RGMs, adding that there will be further easing of monetary policy in the months ahead, particularly if the global economy deteriorates further. Co-Leader of the Emerging Markets Centre, Alexis KarklinsMarchay said although slower expansion in the rapid-growth markets is likely this year, it will only be a blip and we will see a return to significant growth towards the end of the year. “Soaring domestic demand in economies starved, for some time, of investment and consumption will offer business exciting new markets for goods and services in the years ahead,” he said. Senior Partner, Transaction Ad-
visory Services, Bisi Sanda believes the power sector holds the key to Nigeria’s economic growth and development. “If the Federal Government completes its privatisation of the power sector assets in 2012, it will provide much required fresh breath to the much delayed reactivation of stimulus of the manufacturing sector, including the reactivation of over 100 textile mills that closed down or relocated from Nigeria between 2000 and 2007. Power is an enabler in Nigeria,” Sanda said. Ernst & Young, an international consultant, was recently recruited by the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) to assist them adapt, their financials to the International Financial Reporting Standard (IFRS) status. The CBN is expected to migrate to IFRS by the end of this year while NDIC is already at the impact assessment stage of its migration. The IFRS are principles-based standards, interpretations and the framework adopted by the International Accounting Standards Board (IASB) that requires disclosure on a range of issues including risk management measures and changes in accounting policy.