Business

Ten Banks Pay 143 Directors N7.6bn In 2015

Published

9 years ago

May 9, 2016

The directors of ten banks collected N7.6 billion as fees and allowances in 2015, representing 1.58 percent of the banks’ profitability during the year. The ten banks are Guaranty Trust Bank, Zenith bank, Access Bank, FirstBank, UBA, Union Bank, Diamond Bank, Sterling Bank, Fidelity and Wema Bank.

Analysis of financial statements of the banks for the 2015 financial year, reveal that the ten banks increased total money paid to 143 directors by 11 percent or N742 million, from N6.84 billion in 2014 to N7.58 billion in 2015.

The amount paid to the directors represents 1.58 percent of the profit before tax of the ten banks, which stood at N480 billion in 2015. The amount paid to the directors also represented 2.0 percent of total staff salaries (personnel cost) in the ten banks.

Further analysis reveals inadequate disclosures relating to directors compensation, fees and allowances to board chairmen, and salaries of chief executive officers.

For example, Wema Bank did not specify amount paid as compensation to executive directors, while Access Bank and Sterling Bank failed to disclose money paid to their chairmen and chief executive officers.

Total board expenses GTBank led the ten banks, with N1.25 billion paid to its 14 directors in 2015, up from N1.2 billion in 2014.

Zenith Bank came second, with N1.145 billion paid to 10 directors in 2015, up from N630 million in 2014.

Acess Bank and FirstBank came third and fourth respectively, with N1.08 billion and N1.05 billion paid to 14 and 17 directors respectively.

The fifth highest board expenses was incurred by UBA, which paid N603 million to its 16 directors in 2015, up from N600 million in 2014.

Others are Union Bank-N983 million, Diamond Bank-N195 million, Sterling Bank-N265 million, Fidelity Bank-N766 million and Wema Bank-N235 million Executive Compensation

The ten banks, with the exception of Wema Bank, paid N4.63 billion to 52 executive directors. This represented two percent decline from N4.72 billion in 2014.

On the average, each executive directors got N89 million in 2015, down from N91 million in 2014. FirstBank came first as its six executive directors (E.Ds) were paid N784 million, up from N694 million in 2014.

GTbank came second, with N718 million paid to six E.Ds, up from N691 million. The seven E.Ds of Access bank were paid N705 million in 2015, down from N1,12 billion in 2014.

Union Bank paid its six E.Ds N625 million in 2015, up from N542 million in 2014, while Zenith Bank paid its four E.Ds N595 million in 2015, up from N414 million in 2014.

UBA paid its six E.Ds N547 million, down from N555 million in 2014. Others were Diamond Bank with five EDs – 149 million, Sterling Bank with six EDs – N156 million, and Fidelity with six EDs – N346 million. Union Bank CEO tops pay.

Analysis of amount paid to the highest director, the Chief Executive Officer (CEOs), by eight banks reveal the CEOs of eight banks were paid N903 million as salaries and compensations.

This was 13 percent higher than the N798 million paid to the CEOs in 2014. The CEO of Union Bank received the highest pay with N208 million, representing 36 percent or N55 million increase from the N153 million earned in 2014. GTBank CEO came second earning receiving N204.9 million, up by 12 percent or N22 million from N183 million in 2014. The CEOs of UBA and Fidelity Bank came third and fourth earning N125 million and N102 million respectively in 2015, up from N116 million and N94 million in 2014. Others are FirstBank-N90 million, Zenith Bank-N78 million, Wema Bank-N70 million, and Diamond Bank-N25 million.

Shareholders call for review

Shareholders however were of the view that the amount paid to banks directors though huge and not in sync with economic realities, is necessary to prevent them from stealing depositors money, and also in view of the amount of work they have to do to generate earnings for their banks. “If the banks’ executives are well paid, the temptation of stealing depositors’ money will not arise,” stated Mr. Boniface Okezie, Chairman, Progressive Shareholders Association of Nigeria, PSAN.

“However, considering the economic downturn, I think the banks can equally cut the package they take home to reflect the present economic realities. If States Governors and Ministers are cutting their salaries, I think the banks should equally follow suit. There are some allowances for banks’ executives that need to be cut down or completely be removed. It is time for companies to tighten their belts given the global oil fall which had affected the country’s income.

So, if the economy picks up, banks can review the packages paid to their executive directors. But under normal circumstances, the banks’ executive should be well remunerated given the nature of the risk they undertake. If they are under paid, then you be begin to see all kinds of stealing and rubbery in the banks through insider collaboration”, he said.

Mr. Taiwo Oderinde, Chairman, Proactive Shareholders Association of Nigeria, PROSAN, on his part said the huge money paid to directors was unfair to shareholders. He said, “

“The banks’ executive compensations is really on the high side when you compare it to other countries. The executive directors of banks are given all kinds of allowances at the expense of depositors and shareholders. We do react on this issue when we attend

Annual General Meetings, AGMs. In some cases, we refused to approve their remunerations and ask them to go back and review it. “The problem we are having as shareholders is that in some cases we don’t have shareholders’ representation on the board. By the time they set up committee to review the remuneration you will only see executive directors taking decisions. The executive directors are really feeding on shareholder’ fund and this has to be checked by the regulators in the industry.

The executive directors have access to our funds and make use of it the way they like. I think there should be regulation in this aspect of emolument to stop these mouth watering packages.”

According to the Chairman, Renaissance Shareholders Association of Nigeria, Ambassador Olufemi Timothy, “The banks’ executive emolument is not too much considering the earnings they make for the bank. These are people who toil all day and night to see that depositors’ money is kept safely. So the high risk element should also be another great reason why they should be paid well. Even the so called Foreign Exchange, (forex ) are kept by these banks.

Furthermore, if banks’ executives are well paid the issue of stealing or fraudulent practices would be drastically reduced or even eliminated. I believe the packages for executive directors are not too much given the volume of work they do and the income they make for the institutions.”

“My position on this issue is that it should be looked at on the contribution they bring to the organisation”, stated, Mr. Nonah Awoh, a shareholder activist. “ It is not how big or how small the packages are, the concern should be on the equity remuneration of employees.

What is the disparity between the Chief Executive Director and other senior management? If the differential is too high, then it is not good for the organisation. Banks should be careful if fixing remuneration so that it does not affect what they are giving to shareholders in form of returns on investment”, he said.

Source: Vanguard

Business

Zacch Adedeji: And The Revenue Keeps Increasing By Rabiu Usman By Rabiu Usman

Published

11 hours ago

November 15, 2024

Sahara Weekly

Zacch Adedeji: And The Revenue Keeps Increasing By Rabiu Usman

By Rabiu Usman

It was President Bola Tinubu that declared that in the first half of this year, the revenue of Nigeria soared to over N9.1 trillion, compared to the first half of 2023.

For instance, N5.2 Trillion accrued into the Federation Account for the period January to June 2023, while a total of N7.3 Trillion accrued into the account for the period July to December, 2023.

However, for June this year, accruals into the Federation Account rose to N2.483 trillion in June 2024. It was N2.324.792 trillion in May, meaning for the two months of May and June this year alone, about N4.8 trillion accrued into the Federation Account while N5.2 trillion accrued into the account for the first six months of last year.

The President attributed the revenue increase to the government’s efforts in blocking leakages, introducing automation, and mobilizing funding creatively, all without placing an additional burden on the people.

A few days after the President spoke glowingly of the considerable increase in the revenue of the country, a process being powered by the Federal Inland Revenue Service (FIRS), under the Chairmanship of Dr Zacch Adedeji, the Nigeria’s Zaccheus the Tax Collector, the World Bank also confirmed the progress being made in the area of revenue generation.

The World Bank projected that following the recent increase in government revenue, Nigeria’s revenue-to-GDP ratio could rise to over 10.5 percent by the end of 2024.

Ndiamé Diop, World Bank country director for Nigeria shared the forecast during an interactive session on ‘Fiscal Reforms for a More Secure Future’ at the 30th Nigerian Economic Summit, held in Abuja last month.

Also, according to data released in September by the National Bureau of Statistics (NBS), Nigeria’s Value Added Tax (VAT) revenue increased by 99.82% year-over-year in the second quarter of 2024.
During this period, total VAT revenue reached N1.56 trillion, a 9.11% increase compared to the previous quarter.

The NBS report highlighted that the revenue growth was driven primarily by local payments, which brought in about $484 million, while foreign payments contributed $242 million. VAT on imports generated $228 million.

However, despite the level of progress already made, the FIRS under Dr Zacch Adedeji is not done yet.

Various innovations are daily being introduced to ensure seamless payment of taxes by Nigerians.

Last week, the Taxpayer Services Department of the FIRS launched the new USSD code *829#, aimed at revolutionizing taxpayer engagement and access to essential tax services.

According to the FIRS, the initiative was aimed at “simplifying tax processes and providing a seamless, efficient service experience.”

With the *829# USSD code, taxpayers can now effortlessly access a range of services, including TIN retrieval, Tax Clearance Certificate (TCC) verification, and general inquiries all from the convenience of their mobile phones and with no need for internet access.

Also, Zacch Adedeji is everywhere, explaining the four tax bills currently before the National Assembly, assuring that it will not reduce the funding or operational efficiency of government agencies.
Last week Wednesday, Adedeji addressed the heads of the National Agency for Science and Engineering Infrastructure (NASENI), the National Information Technology Development Agency (NITDA), and the Tertiary Education Trust Fund (TETFUND) at the Revenue House in Abuja. He allayed concerns surrounding the proposal to rename the FIRS as the Nigeria Revenue Service (NRS), clarifying that the change is intended to streamline and improve agency efficiency.

He said the main goal was to align government revenue practices with current fiscal demands to ensure all agencies are well-funded and effective.

Adedeji further highlighted that the proposed legislation would enable government agencies to concentrate on their core responsibilities without the added task of revenue collection.

“The bills, once enacted, will allow agencies to focus on their primary functions instead of managing tax collection duties,” he explained.

Adedeji, who appears to have taken up the job of an Explainer concerning the new tax bills, further pointed out that the bills were the aftermath of President Tinubu’s administration recognition of the need for a unified tax code to reduce complexity and stimulate economic growth.

Perhaps, by the time this is being read, Dr Zacch Adedeji, will be standing before another audience to explain the ideas behind the new tax bills and their capability to further sore up the revenue base of the country, because for him, the revenue must keep increasing.

Usman, a public affairs commentator lives in Abuja.

Business

Wema Bank Announces Grand Finale of Hackaholics 5.0: Set to Reward Winners With ₦75 Million Worth of Prizes

Published

17 hours ago

November 15, 2024

Sahara Weekly

*Wema Bank Announces Grand Finale of Hackaholics 5.0: Set to Reward Winners With ₦75 Million Worth of Prizes

Wema Bank, Nigeria’s foremost innovative financial institution and pioneer of Africa’s first fully digital bank, ALAT, has announced the grand finale of the 5th edition of its flagship youth and startup-focused tech competition, Hackaholics.

Launched in 2019, Wema Hackaholics is a groundbreaking initiative designed to harness the creativity and entrepreneurial spirit of Nigeria’s youth, providing them with a platform to turn their tech-driven ideas into reality. The highly anticipated Hackaholics 5.0 grand finale will take place on November 27th, 2024, under the theme, “Meta Idea: Capitalizing Africa’s Growth Through Innovation.” This year’s theme aims to showcase how tech-driven solutions can fuel Africa’s development by tapping into the continent’s growth potential through innovation and digital transformation.

The grand finale will bring together the brightest innovators from universities and tech communities across the country. These innovators will pitch their Digi-Tech solutions designed to solve real-world problems and contribute to Africa’s economic and social progress. The event promises to be the culmination of months of intensive competition, collaboration, and mentorship, providing a platform for youth-led tech ideas to reach new heights.

Announcing the date of the grand finale, Moruf Oseni, MD/CEO of Wema Bank, highlighted the bank’s vision for Hackaholics. “Hackaholics is more than a competition; it is a movement to equip Nigeria’s youth with the skills, networks, and resources needed to drive Africa’s digital transformation. The Meta Idea theme for this year is a call to action for young innovators to think beyond the present and design solutions that will capitalize on Africa’s growth. We are excited to see how our participants envision and build the Africa of tomorrow.”

Speaking on the prizes, the MD/CEO said “At the grand finale, participants will compete for exciting cash prizes, grants, and access to Wema Bank’s extensive network of investors, mentors, and industry experts. The total worth of prizes for this year is ₦75,000,000. The winning team will receive ₦30,000,000, the first runner-up will receive ₦20,000,000 and the second runner-up will receive ₦15,000,000 worth of prizes. Additionally, we will be awarding a special grant of ₦10,000,000 worth of prizes to the female-led team to encourage gender diversity in tech innovation.” He concluded.

Wema Bank’s Hackaholics is a testament to the Bank’s commitment to shaping Africa’s future through innovation and entrepreneurship. Hackaholics 5.0 began with a nationwide call for entries earlier in the year and has engaged over 10,000 aspiring tech innovators and entrepreneurs across Nigeria. With 2,297 applications across 8 physical pitch centers and 1 virtual pitch center, 34 innovators across all locations are set to pitch their ideas at the pre-pitch stage ahead of the grand finale scheduled to hold in Lagos.

Through Hackaholics, Wema Bank has provided a platform for youth to channel their creativity and entrepreneurial spirit into actionable tech solutions that address Africa’s most pressing challenges. Over the years, Hackaholics has grown into one of the largest and most influential tech competitions in Nigeria, impacting thousands of young minds.

The competition not only offers winners cash prizes and grants, but also access to mentorship, industry networks, and resources to help scale their innovations globally. This initiative is a key part of Wema Bank’s broader strategy to harness technology as a driver of socio-economic growth in Africa.
Interested individuals can register to attend the grand finale via https://hackaholics.wemabank.com/grandfinale

Business

ATMs empty as banks ration withdrawals

Published

2 days ago

November 14, 2024

Sahara Weekly

ATMs empty as banks ration withdrawals

The Automated Teller Machines of Deposit Money Banks have consistently remained empty in recent months as banks grapple with a sustained low cash supply.

It was also gathered on Wednesday that some DMBs, particularly in the Federal Capital Territory, have begun another round of cash rationing, restricting maximum over-the-counter withdrawals to a daily limit between N5,000 and N20,000.

While banks struggle to get cash, Point-of-Sales operators have been fulfilling the cash needs of customers.

Speaking at the Facts Behind the Rights Issue Presentation of FBN Holdings at the Nigerian Exchange Limited recently, the Executive Director/Chief Financial Officer of First Bank, Patrick Iyamabo, said that the matter was an industry-wide one and not peculiar to a specific bank.

He said, “It is an industry problem. Most customers after exhausting the options available in other banks, tend to settle at FirstBank to address their cash needs. The challenge differs by location but we know it is a challenge that the regulator is looking into to address. But as we speak of physical cash, we must appreciate that the direction of the industry is to go digital.

“A lot of our customers do most of their transactions digitally, and you heard the GMD speak to this, very often people don’t want to transact in cash. In terms of this new order, your bank, FirstBank is very well positioned so if you look at the statistics and I’m speaking to independent statistics, just pick up your NIBSS report, the bank with the most stable platform meaning availability to always transact digitally is FirstBank. So, all our customers have the benefits of having their cash in First Bank and having access to this cash anytime anywhere and as necessary. It’s a huge advantage.”

Speaking anonymously with The PUNCH, a banker at a tier-1 bank put the blame on the Central Bank of Nigeria.

As a result, many people have turned to Point-of-Sale operators, who have become the primary channel for cash withdrawals, albeit often at higher transaction fees.

Major commercial banks visited by one of our correspondents on Wednesday claimed not to have sufficient cash allocation hence the ration withdrawals to serve more customers.

The banks visited include Guaranty Trust Bank, Zenith Bank along Airport Road, and EcoBank at Jabi in Abuja.

A bank customer at EcoBank, who spoke without mentioning her name, said she was only allowed to withdraw N5,000 from N20,000 previously allowed.

“I was just informed that I can only withdraw N5,000 from my account. Can you imagine? The amount will can’t even take me home.”

Our correspondent received the same answer when he attempted to obtain cash.

At GTBank and Zenith Bank along the airport road, customers were permitted a maximum withdrawal of N20,000 from N100,000 previously disbursed as a daily limit.

A customer, Mr Faith, who visited the bank expressed shock about the new limit. He said the banks didn’t give any cogent reason for reducing the withdrawal limit.

“I just visited these banks, and I was informed that I can only withdraw N20,000 from N100,000, which was the previous limit. They didn’t even give any reason for reducing, now I have to start looking for cash elsewhere. This country is just so annoying,” He vented.

Cash scarcity became a recurring and widespread issue across Nigeria after the Central Bank of Nigeria introduced a controversial policy in January 2023, which significantly reduced the daily and weekly cash withdrawal limits to N100,000 daily, N500,000 weekly for individuals, and N5m for business entities.

This decision, aimed at encouraging a cashless economy, led to long queues at ATMs, increased difficulty in accessing physical cash, and a general disruption of daily financial transactions for millions of Nigerians.

The policy’s impact was felt particularly by those in rural areas and lower-income groups, who rely heavily on cash for their day-to-day needs, exacerbating economic hardships across the country.

Last week, data from the CBN showed that currency in circulation climbed 56.1 per cent year-on-year to reach N4.31tn, up from N2.76tn in September 2023, reflecting an increase of N1.55tn.

This is just as currency outside banks surged by 66.2 per cent in September 2024, reaching N4.02tn compared to N2.42tn in September 2023, a notable rise of N1.60tn in just one year.

This indicates that the volume of currency retained outside the banking sector outpaced the total released for circulation within the past year.

Compared to August 2024, currency in circulation rose by 4.0 per cent month-on-month, adding N166.2bn from the previous figure of N4.14tn.

The CIC is the amount of cash–in the form of paper notes or coins–within a country that is physically used to conduct transactions between consumers and businesses. It represents the money that has been issued by the country’s monetary authority, minus cash that has been removed from the system.

Earlier in September, the CBN announced plans to sanction banks that fail to dispense cash through their automated teller machines, as part of efforts to improve cash availability in circulation.

The CBN also revealed plans to release an additional N1.4tn into circulation over the next three months to ease cash flow within the banking system.

This strategy aims to ensure that ATMs and bank branches have sufficient cash, addressing ongoing challenges faced by customers over cash shortages.

Efforts to get a reaction from the apex bank on the new situation proved abortive as the acting Director, Corporate Communications, Sidi Ali Hakama, did not respond to enquiries sent to her phone number.