The Association of Bureaux De Change Operators of Nigeria (ABCON) has reached out to the Securities and Exchange Commission (SEC) to propose a collaborative effort on harmonising the nation’s digital currency and peer-to-peer (P2P) forex sectors.

Aminu Gwadabe, the ABCON president, in a recent courtesy visit to Timi Agama, the newly appointed Securities and Exchange Commission (SEC) director-general, called attention to pressing challenges faced by the sector.

Gwadabe highlighted the threat posed by unregulated online virtual transaction platforms that allow millions of Nigerians to engage in untraceable and unaccountable foreign exchange trading.

He underscored the organisation’s investment in technology to safeguard the future of Bureau de Change (BDC) businesses and maintain the integrity of the sub-sector. Recognising digital currency’s pivotal role in this future, Gwadabe expressed ABCON’s commitment to adapting to the evolving financial landscape.

The meeting with Agama and the SEC executive board was a follow-up to an earlier online consultation, reaffirming ABCON’s dedication to collaborating with regulatory bodies and promoting the sustainable growth of Nigeria’s financial sector through the adoption of digital currency and innovative technology, Gwadabe noted.

The meeting enabled the provision of insights into the organisation’s role as the leading representative body for all licensed retail foreign exchange dealers, established in 1991, as a liaison between regulatory authorities, key stakeholders, and security agencies to foster transparency in the retail foreign exchange market.

Gwadabe stated further: “As at today, there are over 34 million Nigerians dealing in digital currency and the number is rising by about 9% with a huge market of $9 billion annually. There are thousands of multichannel virtual currency FX platforms and none is indigenous to Nigeria, adding that P2P represents individual to individual transaction.

“To automate the entire foreign exchange retail market, ABCON has partnered with the Commodities Exchange Board, in building the platform knowing that they have sources of foreign exchange. ABCON is willing to work with SEC towards achieving full automation of the retail end of the foreign exchange market in Nigeria.

“Hence, in line with changing global business trends and ABCON’s compliance efforts towards technological innovation, the association on behalf of its membership would be pleased to be granted licence to operate in digital currency transactions. This would entail that whoever has USDT and wants to trade it should approach licensed BDCs for their transactions.”

Timi Agama the SEC DG responded with a robust understanding of the ABCON president’s speech. He said: “I understand that ABCON is desirous of setting up a digital market platform with the intention to be part of the emerging digital currency ecosystem in Nigeria. We at the SEC are open to help the sector grow for the love of the country therefore there will be meetings with the relevant departments of the SEC to detail methods and strategies that will strengthen the Naira through necessary innovative ideas as shared by ABCON.”

Agama emphasised the commission’s dedication to fostering local talent in the development of digital platforms and ensuring robust regulatory oversight of the virtual currency market.He also pointed out that new rules have been implemented to support the growth of locally-developed digital platforms and expressed the SEC’s willingness to collaborate with ABCON in achieving their shared objectives.

Given his extensive knowledge of the virtual currency market, Agama urged ABCON to expedite the finalisation of their proposed digital market model, Koletyomoni, and submit it to the SEC technical team for timely review.

He acknowledged the presence of competing interests and emphasised the need for swift action in shaping the market’s future.

Furthermore, Agama underscored the government’s authority through the SEC and affirmed the commission’s readiness to exercise its powers to maintain order and stability in the issuance, marketing, and trading of securities within Nigeria’s capital market.

Oluwasegun Kosemani, technical partner of ABCON, expressed gratitude to the SEC DG and his experienced team for their warm reception and attentive engagement with the association.

Kosemani further informed the SEC of the substantial resources allocated for research and development of the platform and outlined plans to collaborate with key stakeholders in Nigeria’s blockchain and cryptocurrency ecosystem, such as BICCoN, CDIN, SIBAN, DCC, Bitcoin organisations, local peer-to-peer exchanges, and merchants.

Leveraging ABCON’s wealth of experience, operations, KYC, compliance, and AML capabilities, Kosemani highlighted the platform’s primary goal of harmonising data and ensuring that digital FX merchants operate under a transparent and legitimate framework. He explained further that the  collaborative approach seeks to discourage fraudulent activities and contribute to the government’s revenue through taxes on transactions facilitated by the platform, ultimately enhancing the overall transparency and convenience of the digital foreign exchange market in Nigeria.

Stanbic IBTC Holdings Plc is looking to raise N150 billion through a rights issue programme and N400 billion through a debt issuance programme, amounting to a total of N550 billion.

These were part of the resolutions during the group’s Annual General Meeting held on May 16, 2024, in Lagos, Nigeria.  Another resolution of the AGM was to increase the group’s share capital from the current N6.478 billion to N8.25 billion by creating an additional 3,543,002,837 ordinary shares. Presently, Stanbic IBTC Holdings has 12,956,997,163 fully issued ordinary shares.

Stanbic IBTC Holdings has a paid-up share capital of N109.26 billion, a N90.471 billion shortfall from the N200 billion minimum capital requirement set by the CBN for the national banking license. However, recall that Stanbic IBTC Holdings is a group that contains 10 direct subsidiaries such as Stanbic IBTC Bank Limited, Stanbic IBTC Pension Managers Limited, and Stanbic IBTC Asset Management Limited, among others.

The group’s paid-up share capital is split among its direct and indirect subsidiaries, with about N62.469 billion allotted to Stanbic IBTC Bank Limited, which it wholly owns. Stanbic IBTC Bank’s paid-up capital is split into a N20 billion share capital and N42.469 billion share premium.

Hence, the bank’s paid-up capital falls short by N137.53 billion of the minimum capital requirement set at N200 billion by the CBN for a national banking license, which the bank currently holds.

 By looking to issue an additional 3,543,002,837 ordinary shares and raise up to N150 billion from the rights issue, Stanbic looks to sell the new shares at a price level of around N42.

Currently, Stanbic IBTC shares sell at N52.00, and the rights issue presents an opportunity for existing shareholders to acquire additional shares at a discounted price. However, it also has a potential dilutive effect on the shares of existing shareholders.

Since the announcement of the banking recapitalisation exercise, Stanbic IBTC’s share price has declined by 7.14 percent from N56.00 on March 28 to N52 as of May 17. With the announcement of the rights issue, the price is projected to decline further.

According to Matilda Adefalujo, an Investment Research Analyst at Meristem Securities, investors often tend to display an initial pessimistic outlook during the right issues, considering the dilutive effect on their shares.

“The initial reaction is expected to be pessimism towards their Stanbic shareholdings. However, looking at the fundamentals, Stanbic has done well in terms of profitability, as their Q1 2024 and FY 2023 numbers have been great.

“It’s now left for Stanbic to sweat their loans and advances, as well as beef up their core operations to send a message to their investors that they can still provide good returns to them (investors).”

Another aspect to consider is the feasibility of raising the specified amount from the NGX, given the volume of rights issues anticipated on the exchange over the next two years.

Since the announcement of the banking recapitalisation exercise in late March, over N1 trillion worth of upcoming banking rights issues have been announced.

Nigerian Breweries is also looking to raise N600 billion through a rights issue on the exchange.

Apart from the rights issue programme, the group is also looking to increase its paid-up capital through a N400 billion debt issuance programme. The format of the bond issuance is yet unknown, however, the group’s board has received its shareholders’ approval to determine how they want to borrow the money and in what currency.

The debt issuance programme could be through a public offering (like selling bonds to the public), private placement (selling bonds to specific investors), or other methods.

The Chief Executive Officer of the National Deposit Insurance Corporation, Bello Hassan, has urged bankers in the country to pay attention to cybersecurity.

He stated this on Friday at the swearing-in ceremony of Professor Pius Olanrewaju as the 23rd president/chairman of the council of the Chartered Institute of Bankers of Nigeria in Lagos.

“In this regard, a deliberate and collaborative approach to cyber risk involving all stakeholders is essential to protect the resilience of the banking system.”

Olanrewaju was sworn in by Justice Owolabi Dabiri at the event held chaired by Senior Advocate of Nigeria, Wole Olanipekun.

In his goodwill message, the Speaker of the House of Representatives, Tajudeen Abbas, represented by the Chairman of the House Committee on Banking, Nwachukwu Eze, hailed the immediate past CIBN President, Ken Opara and called on the new leadership of the organisation to embrace technology to boost financial inclusion.

He said, “Today, as you welcome the incoming president and new chairman of the council, we also reflect on the challenges and opportunities that lie ahead. The banking sector is constantly evolving, driven by technological advancements, regulatory changes, and shifts in customer behaviour.

“In the face of these types of changes, the CIBN must remain steadfast in its commitment to excellence and innovation. The incoming leadership must embrace new ideas, and new emerging technologies and foster collaboration within the industry to navigate these challenges and seize the opportunities that lie ahead.

“As we look to the future, we must not lose sight of the importance of financial inclusion and sustainable development. Despite progress has been made in expanding access to financial services.”

According to the speaker, millions of Nigerians remain on the side or excluded from the formal banking sector.

“It is incumbent upon all stakeholders, including the CIBN to redouble your efforts to promote financial literacy, expand access to finance, and foster inclusive growth, that leaves no one behind,” he counselled.

The chairman of the occasion, Olanipekun, speaking with journalists, called for a more active role for the institute in the framing of government policies.

“CIBN should be involved in moulding, modelling, and revitalising critical measures and fiscal policies. Where we are today, we are talking of inflation, hydra-headed inflation, runaway inflation and high prices of commodities beyond the reach of the ordinary people, you don’t expect an institution like this to fold its arms and be watching.

“They should be in the advisory role of the government. We expect that within the next two years, the institute will play a major role in the next two years. They have been trying but they need to try more. Nigerians now need the institute more than ever,” he declared.