Acidosis:


Out of the1-4% interest rate, the bank will deduct 10% as VAT and when you try to liquidate before (even a day before) maturity, you lose 40% of everything you've waited for

Banks are our greatest enemies. They do not love you as they claim, what they love is your deposit/potential deposit.

igbizen:


it's 25% not 40%. I do treasury bills and also do fixed deposit. and it's not 1-4%. You can negotiate with dem. money that I need to use at any time I put in fixed deposit and I negotiate the rate very well. I have a 2m that is on 9% for 90 days In Ecobank. I have four treasury bills worth 18mill in Stanbic. The lowest I have done in FD is 500k at 7.5 to 8%. Maybe am a very persuasive customer.

pocohantas:


But tbh, deposit is nothing in the long run. It helps, but it doesn't really impact on the bank's revenue.

What banks love is risk assets or transactions that bring quick money. Like dorm transfers and all. What is deposit? Deposit is just to avoid pool borrowing and probably trade. It doesn't pay salary...

Acidosis:


You're right o, without even mentioning account maintenance charges, USSD and other DIY charges. Banks make money through several channels. How banks like Diamond, Skye etc. failed is still beyond my understanding. I can't manage that business and fail.

freeman67:




Most times bank staff (account officers) will need you to have money on your account so that they can meet their target. So they will not want anything that will make the money move from there. What you will do is to visit another branch of your bank and request to meet the person in charge of Treasury Bill. Just be direct with your questions on what tenures and rates are available.

Also you will have to read well here and ask once in a while to know when primary market auction is to take place. Secondary market is always on.

cy4cent:


Thanks for the input. I'm not in Nigeria, if I were i would have gone to the bank, do the TBills, and request another account officer before her very eyes. Waiting for her to help me get a new ATM card, before I tell her I'm insisting on TBills. If I tell her before she gets it, she may backpedal.

cy4cent:


Thanks for the input. I'm not in Nigeria, if I were i would have gone to the bank, do the TBills, and request another account officer before her very eyes. Waiting for her to help me get a new ATM card, before I tell her I'm insisting on TBills. If I tell her before she gets it, she may backpedal.

Onboard1:


The strategy I normally used on my account officer is "TIP". I give him tip after every successful TB. With that, he is always willing to help.
So even if she (your acct officer) hesitates or becomes unfriendly but finally did it, find her something and she will become loyal.

freeman67:



Eiya... Sorry but I believe if you can get your banks general customer service(Diaspora Banking contact) contact. Its just to either mail or call them that all.

pocohantas:


But[b] tbh[/b], deposit is nothing in the long run. It helps, but it doesn't really impact on the bank's revenue.

What banks love is risk assets or transactions that bring quick money. Like dorm transfers and all. What is deposit? Deposit is just to avoid pool borrowing and probably trade. It doesn't pay salary...

aremso:



i disagreed with the bolded, check the financials of the banks especially the FUGAZ, about 30-40% of their revenue were from TB and where do they get money for investment in TB if not deposits?

MCeemajesty:
Auction Result

15/05/2019

(91-Day) - 10.0000%

(182-Day) - 12.3000%

(364-Day) - 12.4900%

pocohantas:


But tbh, deposit is nothing in the long run. It helps, but it doesn't really impact on the bank's revenue.

What banks love is risk assets or transactions that bring quick money. Like dorm transfers and all. What is deposit? Deposit is just to avoid pool borrowing and probably trade. It doesn't pay salary...

Acidosis:


You're right o, without even mentioning account maintenance charges, USSD and other DIY charges. Banks make money through several channels. How banks like Diamond, Skye etc. failed is still beyond my understanding. I can't manage that business and fail.

bozz007:


Trust me, what bankers love most is deposit. If there is no deposit, where will the money for risk assets come from? If there is no deposit, which funds will customer want to transfer?

Sholapey:
Has anyone got an alert from first bank for today's drop?

pocohantas:


Ah, God.

You guys shouldn't give me headache. Please read a post and understand. Yes, bankers love deposits, but deposits without transactions is nothing!

If you had read further, you will see where I said, deposit is good to trade and avoid pool borrowing. So, yes, money for risk assets comes from deposits. But deposit isn't the all and all of any branch.

You deposit money, they pay you interest. The customer is even the one gaining. So how exactly do you get back from this customer? Because banks are there to make money.

What is the core function or definition of banking? How do banks make money? Deposits? NO!

bozz007:


Okay, I’ve heard you. It’s not fight.

pocohantas:


Lmao, I am not fighting with you. I even had to edit my post to be more subtle.

bozz007:


Your tone seemed like you wanted to fight o.

I wasn’t saying Banks don’t earn income from other transactions. What I meant was that deposits LET you do the other transactions. So, yes deposits are the most important for any Bank.

You are right that they won’t earn anything if they just sit on the deposits but if the deposits are not there, how do the fees from transactions come in?

That’s why they give huge targets for deposits because they know once the monies come in, other income lines will naturally flow through.

pocohantas:


They can always borrow from the pool.

Targets are just targets. How many percentage of an RM's KPI is this deposit target? How many percentage is PBT/revenue/risk assets...etc?

There are branches with poor deposit, plenty transactions and they do fine. Plenty deposit, poor transaction = loss making branch.

Other income lines do not flow in naturally. It isn't easy to get people to take loans. With high interest rates? It doesn't come naturally at all. The highest you might get is all these petty commissions and fees.

The Head Office just wants to build their deposit base and trade with those monies. While the branches struggle to meet up.

Do deposits itself reflect on a branch's PBT/revenue? I have never seen, maybe I haven't been looking right. Branches that do well are transaction branches, not deposit branches.

Acidosis:


You're both right. Deposits these days are a form of transaction. An example is mobile and internet transfer. Also remember that a customer without deposits can rarely make any reasonable transaction. You need deposit to buy airtime, use ATM services, etc. These little and somewhat 'insignificant' services, are very important. The fact that banks want you to leave your money in a savings account or FD rather than TBills (which is also a form of transaction) shows the extent of importance they attach to your deposit. Remember, they make some money from TBill transactions yet discourage customers from investing in TBills.

pocohantas:


They can always borrow from the pool.

Targets are just targets. How many percentage of an RM's KPI is this deposit target? How many percentage is PBT/revenue/risk assets...etc?

There are branches with poor deposit, plenty transactions and they do fine. Plenty deposit, poor transaction = loss making branch.

Other income lines do not flow in naturally. It isn't easy to get people to take loans. With high interest rates? It doesn't come naturally at all. The highest you might get is all these petty commissions and fees.

The Head Office just wants to build their deposit base and trade with those monies. While the branches struggle to meet up.

Do deposits itself reflect on a branch's PBT/revenue? I have never seen, maybe I haven't been looking right. Branches that do well are transaction branches, not deposit branches.

bozz007:


If you are speaking from the head office perspective, the pool you are talking about come from deposits. If you look at the balance sheets of banks, their loan to deposit ratios hover between 40 and 50%. Why?

Most times, you don’t need to beg customers that deposited money with you to do transactions like transfers, e-banking and rest of them compared to trying to get them to deposit the funds with you.

While a branch can make some money doing transactions, the most profitable are the ones with biggest deposits. You can easily earn pool income on those deposits if you don’t have plenty transactions.

It’s no coincidence that the biggest banks are banks with the largest deposits.

Have you or do you work in a Bank?

pocohantas:

Is Deposit important? Yes.
Does a branch thrive on just deposits? No
That is my point.

bozz007:


Yes, a branch won’t make as much money on only deposits. But a branch with deposits has more chances of making more profit than a branch without.

pocohantas:


Tbills isn't "transaction" to a bank. It is an outsourced transaction, so it is a useless transaction.

If a branch isn't making profit or trying to cut cost, they won't even be interested in your FD, because it would eat deep into their books.

That said, I wasn't talking on individual base, but at a branch level. Banking is financial intermediation. If I collect 100m from someone that has too much, I can give an OD to someone that doesn't have. I collect my fees upfront, transaction is done. I am not interested in pay-in today, transfer tomorrow customers. They are important, but they are not my target in this discourse.

Is Deposit important? Yes.
Does a branch thrive on just deposits? No
That is my point.

Acidosis:


Unfortunately, you cant tell a customer when and how to withdraw his money

I understand your view though. You believe a bank should prioritize quality over quantity; profitability over market share, or rather banks should seek after market share but not at the expense of profitability.