- NGX Group declares N1.3bn net profit in Q1, 2024
The Nigeria Deposit Insurance Corporation on Thursday raised the maximum deposit Insurance coverage for depositors of banks by 900 per cent to N5 million.
The increase of the maximum deposit insurance coverage from N500, 000 to N5, 000,000 would provide full coverage of 98.98 per cent of the total depositors compared with the current cover of 89.20 per cent.
“In terms of the value of deposit covered, the revised coverage would increase the value of deposits covered by deposit insurance to 25.37 percent compared with the current cover of 6.31 percent of total value of deposits,” Bello Hassan, managing director/CEO, NDIC said in the statement.
For Microfinance Banks (MFBs), the NDIC said the increase of the maximum deposit insurance coverage from N200, 000 to N2, 000,000, would provide full coverage of 99.27 per cent of the total depositors compared with the current level of 98.76 per cent and would increase the value of deposits covered by deposit insurance to 34.43 per cent compared with 14.38 per cent of total value of deposit.
According to the NDIC increase of the maximum deposit insurance coverage for Primary Mortgage Banks (PMBs) from N500,000 to N2,000,000 would provide full coverage of 99.34 per cent of the total depositors compared with the current 97.98 per cent and would increase the value of deposits covered by deposit insurance to 21.04 per cent compared with 10.77 per cent of total value of the deposit, currently covered.
Payment Service Banks (PSBs): The increase of the maximum deposit insurance coverage from N500,000 to N2,000,000 would provide full coverage of 99.99 per cent of the total number of depositors and would increase the value of deposits covered by deposit insurance to 43.10 per cent of the total value deposits from the current cover of 40.60 per cent.
The NDIC also increased the maximum deposit insurance coverage for subscribers of Mobile Money Operators by 900 per cent. The increase of the maximum Pass-through deposit insurance coverage from N500, 000 to N5, 000,000 per subscriber per MMO is the applicable coverage level for depositors of DMBs.
“I must emphasise that the revised deposit insurance coverage has balanced the NDIC’s goals of deposit protection and financial system stability with incentives for depositors to practice market discipline and prevent banks from unnecessary risk-taking and moral hazard. Consideration was given to ensure that the coverage was limited but adequate enough to protect a large number of depositors and credible enough to prevent the destabilizing effect of bank runs,” Hassan said.
He explained that the adoption of the revised maximum deposit insurance coverage is supported by the Corporation’s current funding, represented by the balances in the various Deposit Insurance Funds (DIFs), expected annual premium collection, enhanced supervision that would reduce the likelihood of bank failures, effective bank resolution frameworks and other funding arrangements provided by the NDIC Act No. 33 of 2023.
“These adjustments to the maximum deposit insurance coverage reflect our dedication to adapt and evolve in response to the changing landscape of the financial industry, and we remain steadfast in our pursuit of a secure and resilient banking environment for all,” he said.
The NDIC’s mandate of deposit guarantee is a critical component of depositors’ protection, as it guarantees the payment of deposits up to a maximum set limit in the event of bank failure.
The deposit guarantee covers depositors of all deposit-taking financial institutions licensed by the Central Bank of Nigeria, which includes Deposit Money Banks (DMBs), Microfinance Banks (MFBs), Primary Mortgage Banks (PMBs), Non-Interest Banks (NIBs), Payment Service Banks (PSBs) and subscribers of Mobile Money Operators.
The maximum deposit insurance coverage is determined through periodic research-based studies, to ensure its adequacy and credibility. Various factors considered in setting the coverage level are; deposit distribution, impact of inflation, per capita GDP, exchange rate and other statistical models, among others.
NGX Group declares N1.3bn net profit in Q1, 2024
Following its recently concluded Annual General Meeting, Nigerian Exchange Group Plc has unveiled a profit after tax of N1.3 billion, marking a remarkable 332 percent increase from the N310 million recorded in Q1 2023.
“This exceptional performance underscores the group’s unwavering commitment to excellence and strategic growth initiatives, signaling a promising trajectory for the company,” NGX Group said.
The Group reported an impressive N2 billion in Profit before Tax, bolstered by robust growth in operating margins and operational efficiencies.
During the AGM, NGX Group announced its plans to capitalize on digital distribution for the upcoming recapitalization exercises mandated by the Central Bank of Nigeria. Additionally, the group disclosed a strategic acquisition of a stake in the Ethiopian Stock Exchange, securing a seat on the bourse’s board.
These decisive moves align with the group’s overarching strategy to expand its business operations and solidify its position in the regional market.
In a bid to secure long-term sustainability and drive growth, NGX Group implemented a strategic optimization initiative.
This comprehensive plan encompasses a strategic reduction in workforce size, accompanied by significant salary increases for retained staff. The initiative aims to streamline operations, enhance efficiency, and optimize resources, fostering a more competitive and agile organization.
The exercise follows a thorough review of the group’s operations, which revealed opportunities for optimization and improved competitiveness. NGX Group remains steadfast in its commitment to innovation, customer satisfaction, and building a resilient organization poised for sustainable growth.
Commenting on the performance, Temi Popoola, Group GMD/CEO, said, “The recent approval by shareholders of a N10 billion capital raise underscores investor confidence in NGX Group’s strategic direction and its unwavering commitment to driving sustainable growth and value creation. NGX Group remains dedicated to serving its customers, partners, and stakeholders, confident that these strategic measures will pave the way for future success. The company’s focus remains on innovation, customer satisfaction, and building a resilient organization poised for growth.”
