According to a recent report by Fitch Ratings, a globally-renowned credit rating agency, Stanbic IBTC Holdings PLC and its banking subsidiary, Stanbic IBTC Bank PLC, have retained their National Long-Term Ratings of AAA(nga) and F1+(nga).

The report also shows that Stanbic IBTC Bank PLC is excluded from Fitch’s Rating Watch Negative (RWN) list of Nigerian banks, even in the midstof the COVID-19 pandemic’s impact on businesses.

The Fitch ‘AAA(nga)’ ratings signify the highest score in its National Rating scale for Nigeria and it is given to issuers with the lowest expectations of default risk, compared to other issuers. Furthermore, issuers or obligations that have the strongest capacity for timely payment of financial commitments relative to other issuers in the same country are rated F1+(nga).

The Long and Short-term Issuer Default Ratings (IDRs) of Nigerian banks are driven by their stand-alone credit profiles as determined by their Viability Rating (VRs).

According to the Fitch Ratings report, Nigeria’s Country Ceiling Rating of B+will not affect both Stanbic IBTC Holdings PLC and Stanbic IBTC Bank PLC’s National Long Term Ratings.

The National Ratings reflect the creditworthiness of the Nigerian banks relative to other issuers, and both Stanbic IBTC Holdings PLC and Stanbic IBTC Bank PLC are rated the highest in the country in this regard.

The strong liquidity profile of Stanbic IBTC Holdings company and its banking subsidiary stemslargely from their affiliation to, and ability to get,potential support from the parent company,Standard Bank Group.

The World Bank’s Board of Executive Directors today approved a first set of emergency support operations for developing countries around the world, using a dedicated, fast-track facility for COVID-19 (coronavirus) response.

The first group of projects, amounting to $1.9 billion, will assist 25 countries, and new operations are moving forward in over 40 countries using the fast-track process. In addition, the World Bank is working worldwide to redeploy resources in existing World Bank financed projects worth up to $1.7 billion, including through restructuring, use of emergency components of existing projects (CERCs) and triggering of CAT DDOs and spanning every region.

The World Bank Group is prepared to deploy up to $160 billion over the next 15 months to support COVID-19 measures that will help countries respond to immediate health consequences of the pandemic and bolster economic recovery. The broader economic program will aim to shorten the time to recovery, create conditions for growth, support small and medium enterprises, and help protect the poor and vulnerable. There will be a strong poverty focus in these operations, with an emphasis on policy-based financing, and protecting the poorest households and the environment.

“The World Bank Group is taking broad, fast action to reduce the spread of COVID-19 and we already have health response operations moving forward in over 65 countries,” said World Bank Group President David Malpass. “We are working to strengthen developing nations’ ability to respond to the COVID-19 pandemic and shorten the time to economic and social recovery. The poorest and most vulnerable countries will likely be hit the hardest, and our teams around the world remain focused on country-level and regional solutions to address the ongoing crisis.”

Responding to widespread supply chain disruptions, the World Bank is also helping countries access critically needed medical supplies by reaching out to suppliers on behalf of governments. The World Bank is also encouraging others to provide financial support to developing countries for the COVID-19 health response.

“This fast response package will save lives and help detect, prevent and respond to COVID-19 in the countries we serve,” said Axel van Trotsenburg, World Bank Managing Director of Operations. “Our country operations will be coordinated at a global level to ensure best practice is quickly shared, including approaches to strengthen national health systems and prepare for potential follow-on waves of this devastating virus.”

Stanbic IBTC Holdings PLC, a member of Standard Bank Group has partnered FATE Foundation in a bid to curb the COVID-19 pandemic. Stanbic IBTC recently donated the sum of N25 million to the FATE Foundation Philanthropy’s COVID-19 Support Fund.

The Fund, an initiative of FATE Foundation, was established to support the government’s efforts at properly equipping public health facilities in the treatment of COVID-19 patients.

Part of the Fund will be channeled towards setting up a special COVID-19 Ward at the National Orthopedic Hospital Igbobi by the Lagos State government. The Lagos State government plans to set up a special COVID-19 Ward that will support the treatment of patients.

Another beneficiary of the Fund is the Ogun State Ministry of Health, which has been offered the use of FATE Foundation’s Institute for Venture Design (IVD) facility in Abeokuta, Ogun State. The IVD facility, which has a 30-room residential space, also has additional spaces which can be converted into wards for COVID-19 patients.

In line with the Foundation’s policy advocacy work, the Fund will additionally support research on the impact of COVID-19 pandemic on Nigerian entrepreneurs. This survey is to provide data insights on how the current situation is affecting Nigeria’s micro, small and medium enterprises.

The exercise will be done in partnership with BudgIT, the Nigerian Economic Summit Group (NESG), MSME Community of Practice and the Global Entrepreneurship Network on key stakeholder engagement at the national and sub-national levels.

The support Fund will also help the Foundation in executing its Entrepreneurship Programming initiative, aimed at providing resources to support Nigerian businesses at this time. This initiative uses digital platforms for virtual learning, advisory and community engagement programmes.

Yinka Sanni, Chief Executive, Stanbic IBTC Holdings PLC said: “As a socially responsible corporate organisation, we are seizing every opportunity to support the government, agencies and our partners in the fight against the Covid-19 pandemic; hence the support for FATE Foundation. It is only by deliberate collaborative efforts that we can curtail the spread and possible danger caused by this global enemy.”

He further commended FATE Foundation for its research on the impact of COVID-19 pandemic on Nigerian entrepreneurs and the Nigerian economic climate.

FATE Foundation, a credible Non-Governmental Organisation, provides the required support to emerging Nigerian entrepreneurs that aspire to start, grow and scale their businesses. Founded in the year 2000, the Foundation has created a strong entrepreneurial culture and facilitated the development of an enabling business environment for Nigerians.

He added that the organisation will hold nothing back in offering maximum support to complement the efforts of the government and all its stakeholders.

Patrick Akinwuntan

Managing Director

Ecobank Nigeria Plc

Ecobank Nigeria says its customers now enjoy zero charge for digital money transfers below N5,000 being part of its corporate actions to cushion effects of the lockdown to check the rising spread of Coronavirus.

Patrick Akinwuntan, Managing Director, Ecobank Nigeria who stated this in Lagos said this policy which started in March will last till 30 April to encourage citizens adopt digital banking that supports safety measures, particularly the social distancing campaign, to prevent the spread of COVID-19.

According to Mr Akinwuntan the bank’s priority is peoples’ wellbeing and it is therefore determined to support everyone in the face of unplanned shutdown which already have huge economic impact citizens. He reiterated that users of Ecobank Mobile, Ecobank Online, USSD-Ecobank *326#, Omni Lite, are now  charged zero fee for their transfers below N5,000. Before now Ecobank customers who performs transactions on the bank’s platform by dialing *326# does so free of the USSD session fee.

“We are determined to support the Nigerian government and to ensure impact of the business shut down is minimal on the citizens. We encourage our customers to utilize our digital self-service solutions, including Ecobank Mobile App, Ecobank Online, EcobankPay, Ecobank OmniPlus, Omni Lite and the RapidTransfer App without having to visit branches. This is as part of our efforts to ensure social distancing which will help curtail the spread of COVID-19. By utilizing these digital offerings, you can easily access your bank accounts, make payments, transfer funds, process salaries, and carry out your other ancillary banking transactions from the comfort of your home and office without visiting the branch”. Mr Akinwuntan stated.

Also speaking, Olukorede Demola-Adeniyi, Head of Consumer Banking, Ecobank Nigeria, says customers who are yet to upgrade to the new Ecobank Mobile App 4.0 should quickly do so. The Ecobank Mobile App is available for all banking transactions because of its versatility and salient benefits which include the following;

• The ability to send money to anyone via email or SMS by simply selecting the recipient from your contacts and send money to their email or phone number. The recipient will be able to get the money using any bank account, even if they don’t have an Ecobank account.
• Ability to create virtual cards for safe shopping and enjoy the convenience of a virtual card without worrying about it being linked to your account – customer can create several virtual cards.
• Ability to split bills without fuss, enabling you to share expenses as you desire, with friends and family, who will simply get notifications on what they need to refund you. It’s a smart way to get your money back without hounding”.

Further, Mrs. Demola-Adeniyi, reiterated that the Ecobank Mobile app supports customers to pay the fast and stress-free way with EcobankPay by simply scanning the QR code or dial *326*6*Amount*Terminal ID# to pay. “It saves you PoS charges and less human contact. When next you are at the store and need to pay, just ask the merchant for EcobankPay.  Regardless of what you want to achieve, the Ecobank Mobile App is available for you”. She noted.

By Tobias Adrian & Aditya Narain

Today we face economic upheaval potentially more severe than we witnessed during the global financial crisis. The coronavirus pandemic is a different kind of shock. Never before have modern economies shut down at the drop of a hat. From one week to the next, many workers lost their jobs and paychecks. Restaurants, hotels, and airplanes all emptied. And consumers and businesses now face steep losses in income—and potentially widespread bankruptcies.

Pressure on the banking system is growing and higher defaults on debt are imminent. And many now expect a shock to the financial sector similar in magnitude to the 2008 crisis.

The question on the minds of policymakers is how they should prepare for this.

Just over a decade ago, global policy makers came together in an unprecedented display of coordination to launch the development of a revamped regulatory framework for the financial sector. They significantly raised the minimum standards for the quality and quantity of bank capital and liquidity and succeeded in building a more resilient banking system designed to hold buffers above the minimum that could be safely drawn down in stressed conditions.

In the current crisis, national authorities are taking a host of measures to provide fiscal support, and central banks are opening new liquidity lines. How should bank supervisors respond to ensure continued trust and confidence in the banking system?

Banking System Prescription

Like the health experts, bank supervisors are responding to a fast-moving and extraordinary situation. Supervisors must combine the tools from their playbooks for dealing with natural disasters, operational risk events, and bank stress episodes. With its global vantage point, and drawing from past experience, the IMF can offer some additional guidance on the way forward:

Don’t change the rules. Doing this in the midst of a crisis will likely cause more confusion. Likewise, be prepared to give banks time to meet rules if they fall short, and hold off on implementing new initiatives—banks should remain focused on maintaining ongoing operations, given the increased difficulties of conducting such operations remotely.

Use the buffers. Regulators have to communicate clearly that capital and liquidity buffers should support continued bank lending, without adverse consequences for bank management. Banks built these buffers well above Basel minimum standards to manage strains on liquidity and revenue loss from missed loan repayments.

Encourage loan modification. Supervisors should clearly communicate to banks to be proactive in rescheduling their loan portfolio for those borrowers and sectors that have been hard hit by the severe, but temporary, shock. They should also remind banks about flexible credit risk management and the accounting standards for impairment in these situations. Accounting bodies have helpfully stepped in to clarify to auditors how such modifications should be viewed once the economy begins to recover.

Don’t hide the losses. Banks, investors, shareholders and even taxpayers have to bear them. Transparency helps prepare all stakeholders; surprises only worsen their response, as was proven during the 2008 crisis.

Clarify regulatory treatment of support measures. Clarifying upfront how banks and regulators should treat fiscal measures, including measures directly targeted at borrowers, credit guarantees, payment holidays, direct transfers and subsidies—beyond any current guidance in the Basel capital framework—would help with overall transparency.

Strengthen communication. Encourage continuous dialogue between supervisors and banks, especially in this unprecedented situation of working remotely with colleagues, customers, and supervisors. Typically, reporting requirements in key areas, such as liquidity and creditor positions, are enhanced in a crisis, but given operational disruptions, deferring other reporting requirements less material to assessments of financial health may make sense.

Coordinate across borders. Banking is a global business. Broad coordination among national regulators at the international level is imperative. This crisis will pass eventually, and the effects may take time to dissipate, but preserving the integrity of the international framework will be crucial for the credibility and integrity of the global financial system. International bodies like the Financial Stability Board and the Basel Committee on Banking Supervision are working night and day to do just this.

Will It Be Enough?

Simply put, it may be too early to tell. At this point, conditions in many countries are as severe as the adverse scenario of the stress tests that banking regulators commonly use to assess the strength of their banking systems.

And it might get worse.

All of this assumes that economic activity could restart later this year, but we have to also consider more adverse scenarios. Under more severely strained circumstances, we will have to rethink our playbook substantially. Some banking systems might have to be recapitalized or even restructured. The IMF has deep experience in helping countries rebuild distressed banking systems through its technical assistance programs, and will stand ready to help.

Dr. Akinwunmi Adesina

President

African Development Bank

The African Development Bank received on 30 March 2020 an award for its successful one billion Norwegian krone (NOK) social bond issued in 2019. This Environmental Finance 2020 bond award was given by an independent panel comprising 30 of the world’s largest green, social and sustainability bond investors.

“It is inspiring to observe how the African Development Bank sources global capital to finance, lead and develop a strong platform for inclusive and environmental growth across Africa. We know from many of our investors that the ability to participate in Africa through AfDB’s triple-A rating is highly appreciated and we look forward to many more transactions like this,” said Christopher Flensborg, Head of Climate & Sustainable Finance in Large Corporates & Financial Institutions at Skandinaviska Enskilda Banken, a Swedish financial group.

The African Development Bank bond issue was the first social bond ever launched in the Norwegian market, and the Bank’s first transaction in NOK. It was launched in April 2019, as part of a dual-tranche social bond and green bond, placed on the Norwegian and Swedish markets. The dual transaction drew strong interest from dedicated socially responsible investor portfolios as well as those who strongly weight environmental, social and governance considerations in their investment strategies.

The proceeds from this social bond issuance are being directed toward poverty reduction, job creation, and inclusive growth. Since 2017, the Bank has launched nearly $5 billion worth of such instruments denominated in US dollars, euros and Norwegian krone. In 2018, the Bank was recognized as “Second most impressive social or sustainability bond issuer” at the Global Capital Socially Responsible Investments Awards.

The Environmental Finance 2020 bond award followed the 27 March announcement that the Bank had raised a record $3 billion from its Fight COVID-19 social bond, the proceeds of which will fund public and private efforts to tackle the viral pandemic in Africa. Fight COVID-19 is the largest social bond ever issued in capital markets.

“We are honored to receive this recognition for this first ever issued social bond in the Norwegian market. This NOK issue reinforces the Bank’s High 5 operational focus which is aligned with the Sustainable Development Goals. Our Social bond framework allows us to attract investors whose interests are aligned with those of our development mandate,” said Bajabulile Tshabalala, acting Senior Vice President of the African Development Bank.

“We are delighted to be honored by market leaders as we devote our efforts towards the economic and social development of the African continent. The mission of the African Development Bank is to combat poverty and improve lives and social bonds allow us to showcase the impact of our social projects in Africa,” said Hassatou Diop N’Sele, Treasurer of the African Development Bank Group.

The Bank is rated AAA by all four major credit rating agencies, with a stable outlook.