OIRS Seals Four Banks Over N72m Tax Evasion

The Osun State Internal Revenue Service, OIRS, on Wednesday, sealed four banks in Osogbo, the state of Osun capital over their failure to meet their tax obligations totalling N72 million.


The affected banks include Diamond Bank Plc, First City Monument Bank (FCMB) and Guaranty Trust Bank (GTB) and Fidelity Bank plc.

Briefing the newsmen shortly after the exercise, the Acting Chairman/Chief Executive Officer, Osun Internal Revenue Service, Mr Bicci Ali, said, the action is intended to give a bite to the financial institution’s non-compliance to remit all the outstanding taxes due to the state government.


He said as a result, the government action is in accordance to the to the provisions of Section 104 of the personal Income Tax Act 2004 LFN (as amended in 2011) and that they will not be reopened for business until all unremitted taxes are paid to the State Government.

Mr. Ali explained further that OIRS has intensified on advocacy, publicity and enlightenment programmes on the statutory obligations of the citizenry to voluntarily comply by paying their taxes, levies and other charges promptly as prescribed in the constitution of the country and the applicable tax legislations, but in spite of the efforts, many corporate organizations and individuals still engage in several violations.

According to him, under the Tax Act a taxable person is statutorily required to file a return of income tax for the preceding year at the expiration of 90 days from the commencement of every year of assessment, a taxable person or corporate organizations who have not filed their tax returns with OIRS by the stipulated date is in breach of the provisions of the law, which is an offence that is punishable under the tax laws

Investigation revealed that the exercise paralysed the affected banks’ activities as customers were seeing complaining about the development.


Nigeria Bank Divide Widens as Small Lenders Face Cash Crunch

The divide between the haves and the have-nots among Nigerian banks is widening.

The country’s biggest lender is so flush with cash it plans to repay $400 million of bonds when they become due in November 2018 rather than issuing additional debt, while the next two largest banks sold international bonds for the first time since 2014. At the other end of the scale, smaller lenders are scrapping plans to raise dollar loans and struggling to find investors to raise capital.

Top-tier banks in Africa’s most-populous nation and biggest oil producer are rallying after the central bank in April opened a foreign-exchange trading window, easing a crippling currency shortage that contributed to the worst economic contraction in 25 years. Smaller banks are lagging behind as they battle rising levels of non-performing loans and capital buffers near regulatory minimums.

“The gap between the Tier 1 and Tier 2 banks has been widening in profitability and balance-sheet size,” said Omotola Abimbola, an analyst at Afrinvest West Africa Ltd. “In the next one or two years we will probably see the trend extending further.”

United Bank for Africa Plc, the third-biggest lender by market value, raised $500 million in its first Eurobond sale on June 1 at yields below initial guidance. This followed an equivalent issue a week earlier by Zenith Bank Plc in a deal that was four times oversubscribed. Guaranty Trust Bank Plc said this month it has no plans to sell Eurobonds because it’s setting aside funds to repay existing debt.

‘Potentially Challenged’

By contrast, small- and mid-sized lenders like Wema Bank Plc dropped plans last month to raise dollar loans to rather sell naira debt locally in smaller tranches. Unity Bank Plc, which missed a Feb. 28 central bank deadline to recapitalize, has been in talks with investors since October, while Diamond Bank Plc started negotiations to sell businesses and issue debt over a year ago.

“We view the Tier 2 banks as potentially challenged,” Exotix Partners LLP analysts Jumai Mohammed and Ronak Gadhia said in a note last month. The lenders seem unable “to weather asset-quality deterioration storms.”

The central bank had to step in last year when it replaced the top management of Skye Bank Plc for breaching liquidity thresholds. That’s still a far cry from the full-scale takeovers in 2009, when former central bank Governor Lamido Sanusi rescued 10 lenders and spent 1.8 trillion naira ($5.5 billion) to rescue companies brought to their knees by souring loans and corrupt managers.

Still, the five-year dollar bonds didn’t come cheap. Lagos-based United Bank for Africa settled on a coupon, or interest paid twice annually, of 7.75 percent. That’s the highest of at least 10 sales of $500 million by emerging-market banks this year from Turkey, Kuwait, Bahrain, South Korea and China. Zenith will pay 7.375 percent, compared with 6.25 percent on five-year notes sold in April 2014.

Even so, more lenders will issue Eurobonds because they need dollars to offer loans in the U.S. currency or to repay debt, said Lekan Olabode, an analyst at Vetiva Capital Management Ltd. in Lagos. Ecobank Transnational Inc., based in Lome, Togo, plans to sell a $400 million, five-year convertible bond this month to refinance debt and provide short-term bridge funding for non-performing loans at its Nigerian unit.

Margin Impact

Fidelity Bank Plc will decide in the third quarter whether to refinance $300 million of bonds due in May next year or issue new debt after seeing yields on the securities drop and strong demand from investors for Zenith and UBA’s notes, Chief Operations Officer Gbolahan Joshua said Tuesday. Access Bank Plc has $350 million of bonds due in July.

Some banks may use share-price gains to sell equity, although most trade at less than book value, making a rights offering expensive, Olabode said. Local debt also comes at a price, with yields on five-year government bonds at 16.3 percent.


Banks Losses N2.19 Billion To Fraudsters Electronically In 2016

The Nigerian Deposit Money Banks, DMBs, lost N2.19 billion to fraudsters through electronic channels in 2016 fiscal period, an official has said.

The Deputy Governor, Operations, Central Bank of Nigeria, CBN, Adebayo Adelabu, said this while unveiling a report on electronic frauds by the CBN on Tuesday.Speaking at the first stakeholders’ workshop on cybercrime organised by the Nigeria Electronic Fraud Forum and themed:

“Tackling Enforcement Challenges under the Cybercrime Act”, Mr. Adelabu said that according to the report, 19,531 fraud cases were reported by banks in 2016 as against 10,743 recorded in 2015.

A breakdown of the actual amount lost showed that across the counter transactions with a total value of N511.07milllion accounted for the highest losses.

This was followed by Automated Teller Machine, ATM, transactions with N464.5 million, Internet banking N320.66 million, Point-of- Sale, POS, transactions, N243.32 million, and mobile banking transactions, N235.17 million among others.

Commenting on the workshop’s theme, Mr. Adelabu, who spoke on behalf of the CBN Governor, Godwin Emefiele, noted that the challenges faced while enforcing the Cybercrime Act of 2015 had made a review of the Act imperative.

“It is now about two years into the commencement of the Act, and so it is not too early to conduct a holistic review of its implementation,” he said.

“Thus, your deliverables at this workshop should include a careful examination of the extent to which the obligations placed by the Act are fulfilled, and the general assessment of any challenges experienced in compliance with the provisions of the Act.”

He expressed confidence that the workshop would proffer the much-needed solutions and make practical recommendations for the effective implementation of the Act.

On his part, the representative of the National Security Adviser, NSA, Sheriff Lawal, said the federal government will not deter in its resolve to enforce the relevant laws in dealing with perpetrators.

He said, “Though the law has challenges we must work hard to protect our ICT infrastructure.”

“We are all connected to the cyberspace for different reasons but we all need to stay safe and secure,” he added.

Banks Benefit as Dollars Start to Flow

An increase in dollar sales by Nigeria’s central bank is giving the country’s lenders reason to cheer.

“We see an improvement in the number of letters of credit, bills being settled and remittances being allowed,’’ Segun Ajibola, president of the Chartered Institute of Bankers of Nigeria, said in an interview in Lagos, the nation’s commercial hub, on April 21. “Ordinarily, a margin will always be left behind for banks, so it will be right to say at the end of the day it will be an increase in revenue to banks.’’

The Central Bank of Nigeria increased sales of the U.S. currency to banks in late February to try and curb foreign-exchange shortages that contributed to the first annual contraction in the country’s economy in two decades and limited trading by the country’s lenders. Transactions in the currency market rose by a half to $9.72 billion in March compared to the previous month, according to Lagos-based FMDQ OTC Securities Exchange, the nation’s foreign-exchange trading platform.

Nigerian banking stocks rallied the most since Jan. 9 on Monday after it emerged that Governor Godwin Emefiele will let the market determine the naira’s rate in a new foreign-exchange window for portfolio investors in a further bid to revive the economy and address the dollar deficit. While he would tolerate the naira weakening in the window, the central bank probably won’t devalue the naira’s official rate, according to a person who attended meetings with the policy maker over the past two weeks.

The country’s lenders, especially small- and medium-sized banks, have been hard hit by the economy’s woes as companies scaled back output and workers lost their jobs. Non-performing loans as a percentage of gross loans worsened to 14 percent at the end of December from 11.7 percent at the end of June, the central bank said earlier this month.

Banks are now expecting a reduction in non-performing loans and an improvement in profitability following an increase in the oil price and dollar flows in the country, the institute’s Ajibola said.


Banks In Trouble, Failed CBN Stress Test

The Capital Adequacy Ratios (CARs) of three big banks have fallen below regulatory capital requirement, the result of stress test conducted by the Central Bank of Nigeria (CBN) on the status of the banking system has shown.

Overall, the result of the solvency stress test indicated the potential for high contagion risk   through   unsecured   interbank   exposure   as   three banks including two Systemically Important Banks (SIBs) failed CAR after a 100 per cent default shock.

The test, contained in the Financial Stability Report, released on Wednesday by the CBN governor, Godwin Emefiele, classified lenders into three groups – large banks, those with assets greater than or equal to N1 trillion; medium banks with assets greater than or equal to N500 billion but less than N1 trillion and small banks with assets of less than N500 billion.

The CAR is a ratio of bank’s assets to its risks and is 10 per cent for national banks and 15 per cent for banks with international subsidiaries and 16 per cent for SIBs.

It said the baseline CAR for the banking industry, large, medium, and small banks stood at 14.78, 15.47, 12.75 and 3.14 per cent respectively.

The  banking  industry stress  test was  carried  out  at  end of December  last year and covered  23 commercial  and merchant  banks.

It also evaluated  the  resilience  of  the  banks  to credit,  liquidity, interest  rate and  contagion  risks.

Fidelity Bank Staff, Accomplice Jailed 6years For Stealing Bank’s N2m

The convicts, whose addresses were not provided, were arraigned for a two-count charge of conspiracy and stealing.

An Abeokuta Magistrates’ Court which handed down the judgment, said it found the men culpable going by the evidence adduced and diligent prosecution.

The Magistrate, Idowu Olayinka, said investigations showed that the duo committed the offences and, therefore,
contravened Sections 383 and 390(9) of the Criminal Code, Laws of Ogun 2006.

Mr. Olayinka, who sentenced them to three years imprisonment each on each count, said the sentences should run concurrently.

In addition, he said the convicts would pay a fine of N20,000 to the bank after they must have refunded the N2 million or part of it.

Earlier the prosecutor, Augustine Ozimini, told the court that duo and others at large committed the offences on April 14, 2015 at about noon at a Fidelity Bank located at Omida in the state capital.

According to him, the duo conspired to steal the N2 million from the banking hall.

“Idris, a staff of Fidelity Bank, got to know Sulaimon at the Mosque where he goes to pray and Sulaimon introduced him to one Alfa Isiaku Ramon.

“On April 14, 2015, Sulaimon said he went into the banking hall and told Idris not to give Alfa Ramon any money, but Ramon went to bank and collected the sum of N2 million from Idris, the banker.

“Unfortunately for Idris at the close of work, the bank noticed in its account a shortfall and during investigation, the bank was able to link the missing money to Idris.

“The bank through its CCTV camera discovered that Idris gave Ramon money packed in a nylon without any bank transaction.

“After Ramon collected the money which he said he had early asked Idris to loan him to do business, he disappeared.”

He noted that the offences violated Sections 383(1) and 390(9) of the Criminal Code, Laws of Ogun 2006.

Credit: Today News

ICPC Recovers N8.7b From Bank And others

The Chairman of the  Independent Corrupt Practices and Other Related Offences Commission(ICPC), Mr. Ekpo Nta, yesterday confirmed the recovery of N8, 705, 750, 426.15 from Infrastructure Bank and other five sources in 2016.
He said of the funds about N6billion was frozen in the bank alone.
He also said the commission received 1,569 petitions last year, filed 70 cases and secured 11 convictions.
Nta, who made the disclosures at news conference in Abuja, said about 303 criminal cases were still ongoing.
He said: “In 2016, we were able to recover N8, 705, 750, 426.15 including about N6billion which was frozen in Infrastructure Bank. Also, out of the total amount, N668 593, 621. 60 was refunded  to Kano State from SURE-P funds; we have about N292, 013, 150.64 in TSA and N1, 694, 397, 275. 51 pension monies paid to Nigeria Electricity Liability Management Company (NELMCO) beneficiaries and others.
“The recoveries include N20, 890,000 for NSITF Multi-purpose Cooperative Society and the balance of recovery is for extorted students of the Federal University of Agriculture, Abeokuta (FUNAAB) and other victims.
“About 124 vehicles were recovered under the SURE-P Programme last year. We have handed over 40 of the vehicles, which we retrieved from some directors,  to the Federal Ministry of Water Resources on January 26. Part of what we are doing is  to escalate the recovery process this year.
“Also, 42 fake corps members in full uniform were all picked up here in Abuja. We have to bring their parents for ‘graduation’ in Abuja before we released them.
“We want to appeal to Ministries Departments and Agencies(MDAs) to be careful because these fake corps members no longer go to NYSC camps again to avoid being caught. They now post themselves to MDAs.
Nta, who gave update on the petitions sent to ICPC in 2016, claimed that North-Central(including the Federal Capital Territory)   topped the chart with 782 .
The breakdown of petitions from other geopolitical zones is as follows: Southwest(295); Southsouth(201); Northwest(118);  Southeast (106); Northeast (62); the United Kingdom(4) and the United States(1).
Asked of what has become of the alleged investigation of some  governors, Nta  said he was shocked to be reading stories with some figures ascribed to ICPC.
“We saw some media reporting that we had completed the investigation of 30 governors in the past. We also wake up to read reports about ourselves quoting sources.
“Section 64 of the Corrupt Practices Act does not allow the publishing of those facts until we are in court. It is in the court you draw such inferences.
“Of recent, a medium reported that we have placed all Permanent Secretaries on watch-list by quoting sources. Yet, the medium said the story was from ICPC.
Nta explained why ICPC had been focusing on preventive measures.
He said: “While the full weight of the law must be brought against corrupt persons, it is crucial that in addition, anti-corruption efforts be focused on prevention through systems reform and reduction of opportunity for corruption.
“The Independent Corrupt Practices and Other Related Offence Commission  (ICPC) in fulfillment of its mandate at Section 6(b-d) of the Corrupt Practices and Other Related Offences Act 2000, vigorously pursues systems reform to deliberately and consciously  shut the door against illicit activities.
“We not only identify corruption-prone processes, practices and procedures in government agencies but work with them to institutionalize corruption-free processes and enforce compliance. There are ongoing collaborations to strengthen the ethical tone of Ministries, Departments and Agencies through Anti-corruption and Transparency  Units (ACTUs).”


Credit: The Nations