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Leverage crackdown puts spotlight on Credit Agricole, Deutsche

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FRANKFURT: A regulatory crackdown on debt could hit Deutsche Bank harder than expected and embroil Credit Agricole  despite the French bank’s insistence that its ownership structure reinforces its capital defenses, Reuters reported on Wednesday.

Global regulators meeting in the Swiss city of Basel in June surprised banks with a new focus on leverage to measure risk, prompting banks holding large amounts of financial derivatives such as Barclays and Deutsche Bank to either tap investors for more equity funding or make plans for yet another purge of assets to free up capital.

With euro zone banks still considered too large — their assets are over three times the size of the bloc’s economy — others are expected to have to raise capital and shrink with Credit Agricole seen by some analysts as most at risk.

France’s third-biggest bank will have to reduce its balance sheet by ¤242bn, or 14 per cent, and generate ¤17bn in capital over the next three to five years to meet new regulatory requirements, according to a recent study by analysts at Royal Bank of Scotland.

The analysts estimate that banks in the euro zone will have to cut ¤3.2tn in assets over the next three to five years, with the 11 largest, including Credit Agricole, Deutsche, Societe Generale and Commerzbank, axing ¤661bn and having to raise 47 billion in capital.

The capital cloud is putting off some investors.

“I have a neutral stance on banks worldwide at this point for several reasons, but I am more underweight the euro zone banks because they have a chronic problem of being undercapitalised, even if there are some exceptions,” said Jacques-Pascal Porta, a portfolio manager for OFI Optima International fund.

Credit Agricole has declined to disclose capital or leverage ratios for its listed bank under the proposed new Basel III rules.

The regulations call for a leverage ratio of three per cent, meaning for every dollar of assets and some off-balance-sheet commitments, a bank has to hold at least three cents of equity.

Credit Agricole has said regulators and rating agencies are focused only on the capital of the broader Credit Agricole group, which is bolstered by its wealthy regional savings banks.

At a group level, Credit Agricole says it has a 3.5 per cent leverage ratio using existing European requirements, which are less strict than the proposed new rules.

On a standalone basis, the listed bank’s leverage ratio is 1.6 per cent, the lowest among large euro zone banks, according to RBS research.

Credit Agricole said RBS’s estimate reflected transactions between its regional savings banks and the listed bank.

“So the only good way of looking at things is to calculate a leverage ratio at the group level,” said a spokeswoman.

Key to Credit Agricole’s confidence is a guarantee, or “switch mechanism,” from the parent company set to be strengthened early next year, but details of which remain sparse pending an “Investors’ Day” in November or December.

Fitch ratings agency said Credit Agricole’s group structure was a key support – if the listed arm needed more capital, it could raise it internally without resorting to the market as long as the wider group had enough capital of its own.

Not everyone is convinced the “switch” is iron-clad.

“A guarantee is never the same as having the capital at hand for emergencies,” said KBW analyst Jean-Pierre Lambert. “There’s still a risk of a capital increase,” Lambert said. “There will be a component of switch, yes, but they could balance this by doing some form of capital increase.”

Issuing debt or equity or curbing dividends would cap a recent rally in Credit Agricole stock. It has gained 35 percent in 2013, nearly triple the European sector, as confidence grows over its exit from Greece and a refocus on its home market.

Until recently, regulators focused mainly on getting banks to hold more capital and liquidity so they can better absorb losses in future financial crises. But concern that banks might be underestimating the riskiness of their lending prompted regulators to lean more heavily on the leverage ratio, which does not rely on banks’ in-house risk models.

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Source: Punch Newspaper

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This Day

Military, Police Ring Abuja to Forestall Boko Haram Attack

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•Deploy more personnel as army chief vows to wipe out terror group
•Security beefed up at N’Assembly

Deji Elumoye and Kingsley Nwezeh in Abuja

Abuja, Nigeria’s seat of power, is under a massive security cordon following threats of attacks by insurgents and the increasing wave of banditry in the contiguous states of Kaduna, Kogi, Nasarawa and Niger States, THISDAY’s investigation has revealed.

There has been a wave of kidnappings in the outskirts of the federal capital, notably Pegi, Tuganmaje and Kuje among others, which the police have battled in recent times.

The security situation in and around the Federal Capital Territory (FCT) was heightened by the pronouncement of the Niger State Governor, Mr. Sani Bello, that Boko Haram fighters who he said sacked 50 villages in the state and hoisted the terror group’s flag, were about two hours drive away from the FCT.

Security has also been beefed up at the National Assembly as operatives, yesterday, thoroughly screened every vehicle approaching the National Assembly complex in Abuja.

The deteriorating security situation nationwide prompted the National Chairman of the Peoples Democratic Party (PDP), Prince Uche Secondus, to warn that the 2023 general election may not hold, demanding the declaration of a state of emergency as well as the convocation of a national conference.
However, the Chief of Army Staff, Lt. Gen. Ibrahim Attahiru, yesterday restated the Nigerian Army’s determination to annihilate Boko Haram.

But the Governor of Katsina State, Hon. Bello Masari, cautioned against declaring a state of emergency, saying doing so isn’t the solution to combat the security challenges facing the country.
The security of the nation’s airports was also in focus yesterday as the Office of the National Security Adviser (ONSA) said there was no threat to them.

THISDAY’s investigations showed increased presence of troops, police, Nigerian Security and Civil Defence Corps (NSCDC) personnel and intelligence operatives at the three strategic entrances to the city notably, Keffi, Zuba and Gwagwalada.

More checkpoints were also mounted around Gwagwalada and Keffi.
THISDAY also observed increased intelligence deployment at the entrance and the borders of FCT with contiguous states.

Beyond the borders, there were more deployments and police patrols inside the city and increased intelligence deployments as well.
Security sources told THISDAY: “There are deployments here and there but they are routine. Alertness is key to a secure environment.”

It was also learnt that security agencies were involved in frenzied meetings throughout yesterday.
The meetings, coordinated by the office of the Chief of Defence Staff under the new joint operational strategy of the armed forces, were aimed at coordinating a joint response to possible threats of attack to the FCT.

“I understand the security teams have been meeting for some days now and if you look around you, you will notice that there are increasing patrols and numbers of security personnel. The threats are not been taken lightly,” a source said.

National Assembly workers, lawmakers and visitors also had a harrowing experience accessing the legislative complex due to heightened security in the area.
Security operatives thoroughly screened every vehicle approaching the National Assembly complex in Abuja, impeding both human and vehicular traffic.

The Sergeant-at-arm of the National Assembly and other security agencies supervised the operations, leading to huge traffic build-up inside the complex.

Legislative staff, visitors and lawmakers were seen patiently waiting for their cars to be searched so that they could go ahead with the business of the day.
Some staff and visitors at some point got tired of waiting and were seen alighting from their cars to trek from the gate to the complex.

Meanwhile, the ONSA has said there is no threat to the nation’s airports.
A statement by the Head of Strategic Communication, Mr. Zachari Usman, said the reports of threats to the airports were an internal correspondence of security threat assessment misconstrued as security threat to the airports.

PDP Demands State of Emergency

In a related development, the PDP National Chairman, Prince Uche Secondus, yesterday demanded the declaration of a state of emergency, warning that the 2023 general election might not hold if the federal government failed to tackle insecurity.

He called on the federal government to summon a national conference to address the spike in insecurity.
Secondus added that the national caucus of the party will meet today to discuss the state of the nation.

Addressing members of the National Executive Committee (NEC) in Abuja, Secondus said: “We are worried Abuja is not even safe. It is no longer politics. We got alert of plots to bomb and burn down our airports.

“We urge the federal government to declare a national state of emergency in security. There is the need to call a national conference to discuss the insecurity in the country.

“There may not be any election in 2023 in Nigeria due to insecurity. This government must listen to the people. The Buhari government should call a national confab to discuss security and state of the nation. It is no longer politics. This time we are not playing politics. Let’s keep politics aside and move the nation forward.”
He said the country had been grounded, regretting that there had been no matching response from the federal government.

Secondus said in the past, terrorism in the North was confined to the North-east, but with the report of Boko Haram occupying villages in Niger State, terrorism had spread to the North-central
“Herdsmen are also menacing in the West; gunmen causing havoc in the East; and the militants in the South; all killing, looting, raping, maiming and burning down homes. The situation is bad; Nigerians all over are living in fear,” he said.

The Senate Minority Leader, Senator Enyinnaya Abaribe, said the problem of Nigeria was outside of the PDP headquarters, while pledging the support of the Senate to the declaration of state of emergency in security.

Abaribe said he deliberately decided not to speak on the floor of the Senate but to allow the APC senators to speak so as to avoid being accused of giving a partisan colouration to the issue of insecurity.

He stated that only electoral reforms would give victory to the opposition party in the 2023 general election and ensure a democratic defeat of the APC-led federal government.
Also, the Minority Leader of the House of Representatives, Hon. Ndudi Elumelu, commended the NEC and the PDP leadership for their collective efforts at resolving the House leadership crisis.

The NEC meeting adopted the position of Secondus, calling on the federal government to convoke a national conference to discuss the state of insecurity in the country, according to a communiqué read by the National Publicity Secretary, Mr. Kola Ologbondiyan.

Army Chief Vows to Wipe Out Boko Haram

The army yesterday reiterated its commitment to wipe out Boko Haram.
Chief of Army Staff (COAS), Lt. Gen. Ibrahim Attahiru, told reporters in Maiduguri, Borno State that Boko Haram had been defeated in many encounters and would continue to be defeated until it’s annihilated from Nigeria.

“We will take on Boko Haram decisively, and we are committed to the focus of the operations, which is the total annihilation of Boko Haram from Nigeria,” he said.

The COAS, who was visiting the headquarters of Operation Lafiya Dole in Maiduguri for the fifth time since his appointment four months ago, said the visit was to boost the morale of the troops, reassure them and listen to any issues affecting them.

Earlier, the Theatre Commander of Operation Lafiya Dole, Maj. Gen. Farouq Yahaya, lauded the visit, which he said had continued to boost the morale of the troops.
“We are honoured, we are grateful, we are encouraged by those visits. You provided us guidance, logistics and other things we required. We are most grateful for those visits,” Yahaya said.

State of Emergency Won’t Solve Security Challenges, Says Masari

Katsina State Governor, Hon. Aminu Masari, has, however, said declaration of a state of emergency won’t solve the security challenges facing the nation.
Masari, who spoke yesterday with journalists after meeting with the Chief of Staff to the President, Prof. Ibrahim Gambari at the State House, Abuja stated that he was against the recent call by the House of Representatives for the declaration of a state of emergency in the security sector as it would not solve the problem.
According to him, declaring a state of emergency will not achieve the desired effect as the security structure and personnel to be used to execute the emergency are already overstretched in a bid to safeguard lives and property.

Sourced From: THISDAYLIVE

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Tribune

Nigeria records 55 new COVID-19 infections, total now 165,110

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Tribune Online
Nigeria records 55 new COVID-19 infections, total now 165,110

The Nigeria Centre for Disease Control (NCDC) has recorded 62 new cases of COVID-19, bringing the total number of infections in the country to 165,110. The NCDC disclosed this on its official Twitter handle on Friday. “55 new cases of #COVID19Nigeria; Lagos-21, Yobe-19, Ogun-6, Akwa Ibom-3, Kaduna-2, Plateau-2, FCT-1, Rivers-1.” YOU SHOULD NOT MISS THESE HEADLINES FROM NIGERIAN TRIBUNE COVID-19: Nigeria Recorded […]

Nigeria records 55 new COVID-19 infections, total now 165,110
Tribune Online

Sourced From: Tribune Online

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Premium Times

Insecurity: Lagos bans occupation of abandoned buildings

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The government said that no worker should stay back beyond 6:00 p.m. within premises of buildings undergoing construction.

The post Insecurity: Lagos bans occupation of abandoned buildings appeared first on Premium Times Nigeria.

Sourced From: Premium Times Nigeria

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The Nation

UFC: Usman gets N584m after beating Masvidal

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Kamaru Usman has raked in a mammoth £1.1million, about N584.2 million after his impressive knockout victory over Jorge Masvidal on Saturday night, Sportivation.com.ng reports.

The Nigerian Nightmare has been handsomely rewarded for his stunning performance and he was the best-paid fighter on the card which was witnessed by 15, 000 fans in Florida.

According to Daily Mail, Usman earned £538,000 to show up, £459,000 pay-per-view bonus, a £43,000 sponsorship bonus and a well deserved £35,000 Performance of the Night bonus.

Jorge Masvidal also earned £358,000 to show, £186,000 in pay-per-view money and a £28,000 sponsorship bonus.

This is the biggest payday of Usman’s career so far and the Welterweight champion also benefited from the fact that Masvidal is also a top draw for the fans.

Kamaru Usman is a Nigerian-American professional mixed martial artist, former freestyle wrestler and graduated folkstyle wrestler.

Sourced From: Latest Nigeria News, Nigerian Newspapers, Politics

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