Jarus:

Sanusi has been a no-non-sense guy from his UBA and indeed FBN days.
Read this:

Before he became CBN governor, Sanusi was Managing Director of First Bank. And before then, he had been Executive Director, Risk Management at the same bank. When the leviathan called Transcorp was being set up, banks were virtually coerced by Olusegun Obasanjo’s agents to invest N100 million each. Most of them did, but First Bank reportedly did not. Why? When the paper got to Sanusi as Executive Director, Risk Management, he minuted on it, pointing out all the possible dangers, and how the investment could contravene the principle of corporate governance. He virtually told Obasanjo and Transcorp to go to hell. First Bank is today the happier for it, as we know what happened to the billions at Transcorp. It went down the drain.

Developed countries didnt get to where they are today with "no nonsense" guys. They got their with thinkers, strategists and shrewd pragmatists.

i think i approve his action, but the only thing he did that was not right was the necessary step/procedure he negleted.

My take in this whole saga is that this a govt that prides itself on the principles of rule of law yet chooses to treat and disobey the law with impunity. If as alleged, this bank directors do not get the necessary fair hearing to defend themselves b4 CBN then i beg to disagree with Sanusi and his policies. He might be a saint but that does not make him a good decision maker. For the EFCC, maybe they are now trying to impress Hilary Clinton. Their involvement and the commando style they introduced is quite unnecessary. I don't know if it has become a crime to owe or borrow in Nigeria.

wiseguy:

My take in this whole saga is that this a govt that prides itself on the principles of rule of law yet chooses to treat and disobey the law with impunity. If as alleged, this bank directors do not get the necessary fair hearing to defend themselves b4 CBN then i beg to disagree with Sanusi and his policies. He might be a saint but that does not make him a good decision maker. For the EFCC, maybe they are now trying to impress Hilary Clinton. Their involvement and the commando style they introduced is quite unnecessary. I don't know if it has become a crime to owe or borrow in Nigeria.

what then was the purpose of the audit? Was it not to determine the true state of things? was the audit not carried out in cooperation with the banks?

davidylan:

Developed countries didnt get to where they are today with "no nonsense" guys. They got their with thinkers, strategists and shrewd pragmatists.

If he wasn't thinking he would not have pointed out the future flaw Transcorp was to portend, If he wasn't Strategizing, he would not have foreseen that the risks inherent in a politically motivated institution like Transcorp was better avoided, If he wasn't a shrewd he would have been gullible and followed the crowd!

So which one was he not dude?

bibiking1:

If he wasn't thinking he would not have pointed out the future flaw Transcorp was to portend, If he wasn't Strategizing, he would not have foreseen that the risks inherent in a politically motivated institution like Transcorp was better avoided, If he wasn't a shrewd he would have been gullible and followed the crowd!

So which one was he not dude?

u dey ask? he wasn't a southern Christian

Sanusi's interview with Bloomberg in london

http://www.bloomberg.com/avp/avp.htm?N=video&T=Sanusi%20Interview%20on%20Nigerian%20Banks%2C%20Economy%20&clipSRC=mms://media2.bloomberg.com/cache/v_LK4H9oC9uQ.asf

biina:

Wrong analogy. You make it sound like CBN sat down in their office, smacked their buttocks and decided to just sack the executives. No, the 5 banks attracted the attention of the CBN by their activities in the EDW. The audit was carried out (with the cooperation of the bank staff) to ascertain the true state of things. Now you expect the CBN to sit down with the executives that have been found guilty of sharp practices to defend what? Even though the banks themselves have not come out to dispute the figures published by the CBN. You seem to be mistaking the bank for the executives.

You cannot do and undo something you dont own. The executives own the bank CBN regulates.

Nobody is above the judiciary in judiciary matters! For example, the appointment and replacement of ministers is not a judiciary matter.
CBN sacking of the executive was done within its jurisdiction. It does not need court approval.
You can go to court to question if the CBN acted within its power, but you cannot question the sacking itself.

Interpretations on whether the bank acted within its limits cannot be determined by the CBN alone. The CBN had to evoke BOFIA , which is an act.
which is open to interpretation by the courts as you aknowledged. What is the difference ?. When one manages to prove in the court of law that the CBN did not act within its limits he has proven that his sack was illegal. The BOFIA act stipulates conditions under which the CBN can intervene in a bank. And that is what the CBN used in this case . Dont make it look like they can do it anytime they want (with your minister/ presidency analogy) you are absolutely wrong !. It is the court who will now determines if the conditions/situations under BOFIA were the case.

so who pays for the exposure to other banks in the interbank market? Those banks exposure, if properly accounted, has already eroded the share holder funds. The capital input is required to bring the banks CAR upto the minimum 10% required by regulation. Else when the books are genuinely reconciled, they will be distressed and have to be liquidated. Is that your preferred alternative?

You are not saying anything new ! I had earlier on asked for the bank auditors or an external auditor to do proper bank audits. You can quote Sanusi and his CBN all you want but I do not buy an audit process that was carried out on ten banks in 2 MONTHS !

A market economy (often referred to as a free-market economy ) is an economy based on the division of labor in which the prices of goods and services are determined[b] in a free price system set by supply and demand[/b]
(Altvater, E. (1993). The Future of the Market: An Essay on the Regulation of Money and Nature After the Collapse of "Actually Existing Socialism. Verso. pp. 57.)
A free market is a term that economists use to describe a market which is free from economic intervention and regulation by government, other than protection of property rights (i.e. no regulation, no subsidization, no single monetary system, and no governmental monopolies).
Within the ideal free market, property rights are voluntarily exchanged at a price arranged solely by the mutual consent of sellers and buyers. By definition, buyers and sellers do not coerce each other, in the sense that they obtain each other's property rights without the use of physical force, threat of physical force, or fraud, nor are they coerced by a third party (such as by government via transfer payments)
(Rothbard, Murray. The Concise Encyclopedia of Economics)

And tell me where is such a market practiced, US,UK , Japan ? There is a big difference between theorotical and ideal situations. In a real and practicable free market system as practiced by Nigeria, US, Uk etc There are regulation and interventions as stipulated by law.

Because that is essentially what the banks were running. They were declaring no existent profits and taking in more money (via EDW and depositors) to fulfill existing obligations.
Tell me what is legitimate about cooking your books and declaring profits you didnt make? or was Madoff also running a legitimate business?
Reviewed by who?CBN presented their findings - have you read it?

Profits are an offset between assets and liabilities. How you value an asset and a liability is often not clear as black and white. How you determine a performing, toxic or margin loan is not that clear cut. Should we now say that the judgement of the banks should be completely dicarded for that of CBN ? That is why I ask for a fair hearing so that we hear from the other side. I have a lot of doubt for this hastily run audits.

The CBN sets the metric for insolvency, and any bank found wanting is insolvent. It is fundamentals of regulation. Or would you rather the bank be left alone to determine when they are insolvent?

May I beg to differ a little. The CBN sets and publishes the metric for insolvency but the CBN should not and does not have the monopoly in interpreting this metrics. That where the courts come in. This is not a dictatorship.

The CBN has only appointed interim management teams. I dont see the problem with sacking executives who have mismanaged depositors funds and cooked their books.

Apparently ! Throwing ur banking sector into chaos and denting customer and investor confidence even at this critical time and not having a full disclosure on how you intend to end the saga does not help the issue. Demolishing a house to fix a problem might fix cracks in the walls might fix the problem . But that sure is a wasteful and expensive approach.

Sanusi has been bold enough to clear out some of the bad eggs in the system and all he gets from Nigerian is criticism.

He has roundly applauded by analysts and most Nigerians in general. But he has been critisized for his approach which might end up creating an even bigger problem.

So you would rather he do it the old fashioned way and sweep the issue under the carpet, to save face (like the handling of the haliburton case).

Nope. he ought to take a less dracunian approach and acknowledge that he is dealing with the markets here and not a government ministry. I have asked you in the past to do a research anywhere on the internet and see if you'll find the details of AIG, RBS, meryll lynch, Bear stearns etc who owed them and who paid up. The absence of this information is to eliminate artifictial problems that might arise as a result of panic and wrong perceptions which will escalate the problem.

The international community believes that everyone in Nigeria is corrupt, and its only moves like this that can show the world that the regulatory bodies will not shy away from dealing with errant behavior.

And sanusis action has done a lot to improve our image.

<facepalm> it is just saddening the way nigerians think at times. The good guy is now being made out to be the villian.
Sanusi is criticized at the expense of the executives who have acted inappropriately.

He has enjoyed huge applause from a cross section of Nigerians.But a lot of analysts are not in  the wrong for questioning his approach to the issue. Which showed a lack of understanding of the whole issue, reckless rush, and has potentially blown the biggest hole in Nigerias coporate history. Sanusi will be remembersd as the man whose era killed Nigerias banking sector. The sector would not recover from this in 2 years.

davidylan:

Developed countries didnt get to where they are today with "no nonsense" guys. They got their with thinkers, strategists and shrewd pragmatists.

Your whole statement sounds so far from the truth. I won't even bother myself trying to prove you wrong, just give us a list of these your developed countries and their pragmatists and I'll show you their 'no nonsense' side!

You cannot do and undo something you dont own. The executives own the bank CBN regulates.

The executives do not own the bank. It is owned by the shareholders, the executive could also be a shareholder. And shareholder changes, today it could be owned by a yoruba, Hausa or Igbo person who buy shares from the Stock exchange and next week it could be sold to a foreigner or foreign institution and the next week they sell it to someone else.

They are not private banks, they are listed on the stock exchange.

Sentiment apart, Sanusi is starting well. I also hope and pray that he ends well.

I like his bold steps. Let him not be discouraged by the shallow-minded propagandists.

Yes Sanusi, show them what you are capable of. Rid the banking system of all callous corrupt individuals. One step at a time

davidylan:

Developed countries didnt get to where they are today with "no nonsense" guys. They got their with thinkers, strategists and shrewd pragmatists.

You will stick with your prejudgment of the man based purely on subjective grounds i see?

naijatoday:

The executives do not own the bank. It is owned by the shareholders, the executive could also be a shareholder. And shareholder changes, today it could be owned by a yoruba, Hausa or Igbo person who buy shares from the Stock exchange and next week it could be sold to a foreigner or foreign institution and the next week they sell it to someone else.

They are not private banks, they are listed on the stock exchange.

By executives , I mean the board of directors who weild boardroom powers and represent the shareholders interests by virtue of their majority stakes in the banks.
The Investor market is opening up after the credit crunch with increase in cash flows to equity markets like Nigerias. With sanusis actions, he has dented Nigerias chances of some recovery and eventual gains.

adigun101:

By executives , I mean the board of directors who weild boardroom powers and represent the shareholders interests by virtue of their majority stakes in the banks.
The Investor market is opening up after the credit crunch with increase in cash flows to equity markets like Nigerias. With sanusis actions, he has dented Nigerias chances of some recovery and eventual gains.

Someone having the largest share does not mean it owns the bank alone. That is why you must have independent non-executives who are not representing shareholders on the board. It is a publicly traded company, just because you are the majority does not mean you run it anyhow especially when it is a bank and you collect a license from the CBN to collect peoples deposit to run your company. Banks are systematically important to an economy that is why a regulator must be there to regulate them.

And for your second statement thank you for stating that. While foreign banks were taking their loss as far back as October and moving on our own banks who admit to exposure to a capital market that crashed, oil price that dropped and real estate people cannot afford to buy, they kept lying and cooking their books claiming profit with the help of the central bank governor, even though there were already signs as far back as October when the EDW window was open, that all is not well. If Soludo had made this banks declare their exposure and move on, will be joining the banks in the rest of the world to be recovering.

For those hailing Sanusi for what he has being doing, maybe it is not yet Uhuru - Maybe the time for hero-worshipping or praise singing has not yet arisen. Maybe it is an ethnic sanitizing of the banks. Just maybe---
The witch cried yesterday and the child is dead today.  Is there any disconnect between this twin events? Maybe yes! Maybe no!  We may not be sure, but can only make some conjectures.  But as they say, there is no smoke without fire. But as the fire subsidizes and the power of the smoke gradually withers, the smokescreen will be gone and everything will become clear again.
The take -over by the banks was first reported as a rumour by Vanguard Newspapers in March 23, 2009.  Some commentators on this thread have countered the position presented by Vanguard Newspapers with that of BusinessDay which also saw the decay in the banking sector as a consequence of the margin loan granted by the banks to speculators in the capital market.  I want to say that the analyses of BusinessDay in February was only meant to serve the warning to all stakeholders in the economy that all is not rosy in the banking sector and in their role as the fifth estate of the realm, draw attention to the rot. Can’t we extrapolate, based on the BusinessDay article, that the Northern hegemony which had never hidden their disdain for the consolidation exercise (because they lost out due to no fault of others but because of their own inaction) would like to capitalize on the situation and use their influence on the presidency to change the ownership of the banks?
Now it is no longer a rumour and the president has appointed a CBN governor of northern extraction. And as if to confirm that the appointment was meant to play out the script written by the Northern hegemony, the CBN governor rather than take time to settle down to study the banking situation, went to work almost immediately to carry out the agenda.  And to further fuel the suspicion, the list of the non-performing debts was compiled as of May, just about the time of the ascendancy of Sanusi as the CBN governor only for them to come out with another press release confirming the errors on the non-performing debt list.
I do not want to believe it, but I have also read in one of the tabloids that CBN is trying to package the five banks for sale to foreign investors. I hope this is not true, because it will be too good to be true and it will confirm the fears of some commentators that the move by the CBN to sack the bank officials is a ruse for ethnic sanitizing of the banks.
Is it not also true that two Deputy Governors that spoke against carrying out the cleansing exercise by the CBN have been removed? Could it be that these former deputies are seen as a threat and clog in the wheels of the agenda?
I will tread on the side of caution because some things don’t seem right and when things are not done the proper way, they leave room for conjectures and questioning of the motives of the executioners. It is not yet time for hero-worshipping.

Abeem:

For those hailing Sanusi for what he has being doing, maybe it is not yet Uhuru - Maybe the time for hero-worshipping or praise singing has not yet arisen. Maybe it is an ethnic sanitizing of the banks. Just maybe---
The witch cried yesterday and the child is dead today.  Is there any disconnect between this twin events? Maybe yes! Maybe no!  We may not be sure, but can only make some conjectures.  But as they say, there is no smoke without fire. But as the fire subsidizes and the power of the smoke gradually withers, the smokescreen will be gone and everything will become clear again.
The take -over by the banks was first reported as a rumour by Vanguard Newspapers in March 23, 2009.  Some commentators on this thread have countered the position presented by Vanguard Newspapers with that of BusinessDay which also saw the decay in the banking sector as a consequence of the margin loan granted by the banks to speculators in the capital market.  I want to say that the analyses of BusinessDay in February was only meant to serve the warning to all stakeholders in the economy that all is not rosy in the banking sector and in their role as the fifth estate of the realm, draw attention to the rot. Can’t we extrapolate, based on the BusinessDay article, that the Northern hegemony which had never hidden their disdain for the consolidation exercise (because they lost out due to no fault of others but because of their own inaction) would like to capitalize on the situation and use their influence on the presidency to change the ownership of the banks?
Now it is no longer a rumour and the president has appointed a CBN governor of northern extraction. And as if to confirm that the appointment was meant to play out the script written by the Northern hegemony, the CBN governor rather than take time to settle down to study the banking situation, went to work almost immediately to carry out the agenda.  And to further fuel the suspicion, the list of the non-performing debts was compiled as of May, just about the time of the ascendancy of Sanusi as the CBN governor only for them to come out with another press release confirming the errors on the non-performing debt list.
I do not want to believe it, but I have also read in one of the tabloids that CBN is trying to package the five banks for sale to foreign investors. I hope this is not true, because it will be too good to be true and it will confirm the fears of some commentators that the move by the CBN to sack the bank officials is a ruse for ethnic sanitizing of the banks.
Is it not also true that two Deputy Governors that spoke against carrying out the cleansing exercise by the CBN have been removed? Could it be that these former deputies are seen as a threat and clog in the wheels of the agenda?
I will tread on the side of caution because some things don’t seem right and when things are not done the proper way, they leave room for conjectures and questioning of the motives of the executioners. It is not yet time for hero-worshipping.

They two people Vanguard mentioned were NEVER deputy governors only board members. The federal government is changing the whole board including those that are said to have agreed or disagreed. The only person that is remaining from the board is Tunde Lemo.

naijatoday:

Someone having the largest share does not mean it owns the bank alone. That is why you must have independent non-executives who are not representing shareholders on the board. It is a publicly traded company, just because you are the majority does not mean you run it anyhow especially when it is a bank and you collect a license from the CBN to collect peoples deposit to run your company. Banks are systematically important to an economy that is why a regulator must be there to regulate them.

And for your second statement thank you for stating that. While foreign banks were taking their loss as far back as October and moving on our own banks who admit to exposure to a capital market that crashed, oil price that dropped and real estate people cannot afford to buy, they kept lying and cooking their books claiming profit with the help of the central bank governor, even though there were already signs as far back as October when the EDW window was open, that all is not well. If Soludo had made this banks declare their exposure and move on, will be joining the banks in the rest of the world to be recovering.

It seems you don't get the difference between regulation and running banks. What the CBN is doing now is running the banks. Which is not a core function of the CBN and ethically not healthy banking in a free market economy. I am only saying that the CBN should have resorted to such an extreme measure only after exhausting various other options. This is not the first time in the history of banking that such a situation has been experienced. You don't just seize banks or companies out of the blues and dictate their destiny. this would send negative vibes to prospective investors who will doubt the credibility and independence of Nigerias banking sector and corporate sector as a whole.
Go and check out the performance of RBS and Lloyds HBOs shares which opted for government funds and have been part nationalised. As against that of Barclays and HSBC who self-capitalised by sourcing for funds independently (even at a higher interest rates and hence higher liabilities) outside the government funds. The global markets of which Nigeria is a part of, frowns at any perception of heavy regulation and government involvement. Mind you the said banks opted for these funds and weren't forced by the government. And this they did as a last resort.

adigun101:

It seems you don't get the difference between regulation and running banks. What the CBN is doing now is running the banks. Which is not a core function of the CBN and ethically not healthy banking in a free market economy. I am only saying that the CBN should have resorted to such an extreme measure only after exhausting various other options. This is not the first time in the history of banking that such a situation has been experienced. You don't just seize banks or companies out of the blues and dictate their destiny. this would send negative vibes to prospective investors who will doubt the credibility and independence of Nigerias banking sector and corporate sector as a whole.
Go and check out the performance of RBS and Lloyds HBOs shares which opted for government funds and have been part nationalised. As against that of Barclays and HSBC who self-capitalised by sourcing for funds independently (even at a higher interest rates and hence higher liabilities) outside the government funds. The global markets of which Nigeria is a part of, frowns at any perception of heavy regulation and government involvement. Mind you the said banks opted for these funds and weren't forced by the government. And this they did as a last resort.

What does regulation have to do with running banks in the statement you made and I replied too. What are the various other options? Give them time to recover the debt? They had that since October. Allow them to recapitalize? Can the NSE at this time be able to recapitalize all the 5 banks. Are there enough investors in the capital market that are Nigerians? will it not be the same shareholders borrowing money from other Nigerian banks and buying all the shares

As for the Independence of Nigeria banking sector, there is a limit to independence a bank in any part of the world should enjoy, maybe if the U.S and U.K were paying more attention, they will not have created banks and insurance company that is too big to fail. I think the days banks enjoy too much Independence are over, even the U.S is calling for tougher regulation. Barclay's and HSBC were not in a really bad shape compared to RBS and Lloyds. And as for Barclays, was it not the Arabs through ICPC owned by the Adu Dhabi royal family that helped the bank? They injected about $2.03.5bn into the bank and sold their shares a few months back making around $1.22bn back in profit. Is it not some Nigerian people that are crying foul against foreign (arab) investors?

For those that want to know how the CBN injected N400bn into the banks without needing NASS approval (since its not federal government money), here is a link, its on page one.


http://www.proshareng.com/admin/upload/reports/Flash%20Note%20-%20Sanusi%20Providing%20More%20Colour.pdf

naijatoday:

What does regulation have to do with running banks in the statement you made and I replied too. What are the various other options? Give them time to recover the debt? They had that since October.

Now you are cooking your facts. They had since october to recapitalise and where audited in may. 

Allow them to recapitalize? Can the NSE at this time be able to recapitalize all the 5 banks. Are there enough investors in the capital market that are Nigerians? will it not be the same shareholders borrowing money from other Nigerian banks and buying all the shares.

Well there are various options on recapitalising aside the NSE. You can let the bank source for their funds even from arab, american or far east investors(Barclays & Citigroup), they can sell their assets. Even the government can offer buy these margin loans and then go ahead and hound the debtors like they are doing now. They can then indirectly push for the change of these failed bank executives but that is no solution to a problem that already exists. There were bailouts all over the world without someone going to the press to cast details of the dire picture of the banking sector.

As for the Independence of Nigeria banking sector, there is a limit to independence a bank in any part of the world should enjoy, maybe if the U.S and U.K were paying more attention, they will not have created banks and insurance company that is too big to fail. I think the days banks enjoy too much Independence are over, even the U.S is calling for tougher regulation.

Now, tell me what has changed, you have just carried away by all those screaming for the head of bank executives during the credit crunch. The bonus culture is back, high stake risks are still being taken, with the govermnents seemingly backing this activities in the background. You need to understand the complex intricacies of the governments and their economies. sanusi just did not have the experience in this regard.

Barclay's and HSBC were not in a really bad shape compared to RBS and Lloyds. And as for Barclays, was it not the Arabs through ICPC owned by the Adu Dhabi royal family that helped the bank? They injected about $2.03.5bn into the bank and sold their shares a few months back making around $1.22bn back in profit.

Even though Barclays raised far more than that amount, but you're right that was one of the sources. Their sources is not in question but their perception of independence (of which barclays paid a huge price) which results in confidence is what i'm driving at. I am only driving at the fact that those banks bailed out were not forced and taken over. The Mds of the bailed out banks were evntually let go but not in a blanket manner.

Is it not some Nigerian people that are crying foul against foreign (arab) investors?

what does that matter. Some Nigerians will cry against anything. But far less Nigerians will cry out if the Arab investors are sourced out by the bank itself. You can now see one of the drawbacks when the CBN goes around doing certain things. It will be threated with suspicion and thats not only in Nigeria.

There is no need to go on commenting on this issue. But remember one thing "The Markets is always Right". When the effects start coming in, we might start blaming everything from NEPA to Oil prices.
Even though the excuse of the bank bailout and dwidling oil prices were used to justify Nigerias degrading by S & P they have always been there as sanusi rightly observed.
Sanusi should be smart enough to know that the rating is released as pointer to the level of confidence in an economy and as a guide to how risky acquiring assets and investing in an economy/company or government is. Sanusi should not wait for them to spell it out to him that the downgrade was as a result of dent in confidence he has created. Not to talk of the coincidence in timing. He is beginning to look absurd and laughable going to ask for clarification

naijatoday:


They two people Vanguard mentioned were NEVER deputy governors only board members. The federal government is changing the whole board including those that are said to have agreed or disagreed. The only person that is remaining from the board is Tunde Lemo.

Can you quote your source please? Are you aware that two new Deputy governors were appointed to replace the sacked DGs. They are Dr. Kingsley Chiedu Moghalu and Mr. Stephen Oronsaye -  http://www.proshareng.com/news/singleNews.php?id=7349  
Why would two new deputy governors be appointed if the CBN by statute is empowered to have four. Refer to Section 6 of the CBN Act  - http://www.cenbank.org/OUT/PUBLICATIONS/BSD/2007/CBNACT.PDF

Abeem:

Can you quote your source please? Are you aware that two new Deputy governors were appointed to replace the sacked DGs. They are Dr. Kingsley Chiedu Moghalu and Mr. Stephen Oronsaye -  http://www.proshareng.com/news/singleNews.php?id=7349  
Why would two new deputy governors be appointed if the CBN by statute is empowered to have four. Refer to Section 6 of the CBN Act  - http://www.cenbank.org/OUT/PUBLICATIONS/BSD/2007/CBNACT.PDF

President Umaru Yar'Adua has approved the appointments of Stephen Oronsaye and Nebolisa Arah as members of the board of the Central Bank of Nigeria (CBN).

Olusegun Adeniyi, special adviser to the president on media and publicity, made this known to State House correspondents in Abuja on Sunday.

"Oronsaye is the current Head of the Civil Service of the Federation (and) is to serve on the board in his personal capacity, to replace Prof. Akpan Ekpo." Mr. Arah, who was the pioneer Managing Director of Fidelity Bank, is to replace Mrs. Juliet Madubueze.

The special adviser also announced the renewal of the appointments of Samuel Olofin, Dahiru Muhammad and Joshua Omuya to the board."All the board appointments are subject to confirmation by the Senate," he said.

Adeniyi also announced President Yar'Adua's nomination of Dr. Kingsley Moghalu for confirmation by the senate as a deputy governor of the CBN. He said the nomination of Moghalu was meant to strengthen the CBN for effective and efficient performance.[/b]

"Moghalu, 46, holds a doctorate degree from the London School of Economics with experience in corporate governance, risk management and strategy. His appointment is expected to complement the collective strength of the CBN board and management.

"President Yar'Adua has also approved the nomination of Dr. Adedoyin Salami, Mr. John Oshilaja, Prof. Chibuike Uche, Dr. Shehu Yahaya and Mr. Abdul-Ganiyu Garba for confirmation as members of the Bank's Monetary Policy Committee," Adeniyi said.

http://234next.com/csp/cms/sites/Next/Home/5444973-146/Yar%27Adua_appoints_Orosanye,_others_as_CBN.csp

Oronsanya cannot be the head of service and also be a deputy Governor at the same time.

I do not know if Nebolisa Arah can be confirmed since he was the guy that was picked to be the CEO of Afribank

@naijatoday
Your source sounds credible than mine. Thanks for the update.

Sanusi Promises Double Digit Growth


The Governor of the Central Bank of Nigeria, Sanusi Lamido Sanusi yesterday in London expressed optimism about the country’s macroeconomic prospects, saying that Nigeria is expected to achieve a growth rate of 5 per cent this year buoyed by non-oil growth in the agriculture sector, improved oil prices and production following the amnesty programme in the Niger Delta, the steady decline of headline inflation and the nation’s robust foreign reserves.

Fielding questions from the international financial community at a forum organised by the CBN, Sanusi said with the efforts being put in by the federal government to improve infrastructure, particularly in the power sector, Nigeria has the potential to attain double digit growth by 2010 and 2011.

Addressing the concerns of foreign banks and investors on the recent shake up in the banking sector, the governor pledged CBN’s preparedness to back all the foreign loan obligations of the five banks taken over by the CBN in the unlikely event of default.

Penultimate Friday, the CBN had moved swiftly to save Intercontinental Bank Plc, Oceanic International Bank Plc, Union Bank Plc, Finbank Plc and Afribank Plc from imminent failure by injecting N420 billion into the institutions and dismissing their managing directors and executive directors.
Sanusi said the intervention by the CBN entailing the injection of N420 billion had fortified the banking sector in Nigeria and that the five banks are safe and have been meeting their foreign obligations, further disclosing that “one of the five had just made payments on its foreign loans.”
Responding to enquiries on whether the CBN would provide guarantees on the foreign loans, the governor stated that the Central Bank “is not contemplating providing guarantees on the (five) banks’ obligations since the need had not arisen.”

The governor informed the audience, which had in attendance the five interim managing directors, including Lai Alabi who confirmed that he had been away in the United States of America but will resume at Intercontinental Bank on Monday, that ever since the intervention there had been no single run on the affected banks.

“The CBN and government acted swiftly to protect savers and creditors to the five banks, and it is their managers and debtors that are now being held responsible for their problems,” he said.

He admitted that during the first two days after the intervention, there were concerns about flight to safety among the five banks, but their new CEOs called up their key and corporate customers to convince them of the safety of their deposits.

“In fact, one of the banks has already become a net placer of funds in the interbank market, so I am tempted to recall the money we injected in the banks,” the governor said in a light-hearted reference to the resilience of the banks.

The governor acknowledged that the problems that arose in the banking sector could be partly blamed on weak regulatory supervision of the banks’ subsidiaries that had taken margin loans to trade in equities.

“These subsidiaries, however, are not licensed or regulated by the Central Bank, which brings to the fore the question of consolidated supervision for all the regulators in the financial sector.

“We have to work closely with the Securities and Exchange Commission, the Nigerian Stock Exchange, even though it is not a regulator, the National Pension Commission and National Insurance Commission to safeguard against the reoccurrence of a systemic crisis.

“I am the chairman of the Financial Services Consultative Committee and our aim is to strengthen it and hopefully this would provide a roadmap for improved regulation in the financial system.”

Providing further insight into the exposure of the five banks taken over by the CBN, the governor said all the banks in the country were exposed to the oil and gas sector to the tune of N754 billion of which 50 per cent was accounted for by the five banks.

“The total outstanding commitment by all the banks at the Expanded Discount Window between October 2008 and July this year was N400 billion of which the five accounted for 90 per cent of the exposure.

“The five banks also had substantial non-performing loans on their books amounting to 40 per cent of their total loan portfolios.”

On the issue of the audit exercise for the 14 banks whose joint examination by the CBN and National Deposit Insurance Commission is still ongoing, Sanusi indicated that the audit for 11 bank is about to be concluded, while the three outstanding will be rounded off by September this year.

At this point, he said, “we cannot second guess the outcome of the audit for the remaining 14 banks, but the CBN does not envisage significant problems of the magnitude in the five in which we intervened.

“We are basically going to force a clean up of the entire system, so I expect that for the other 14 banks there will have to be additional provisioning.
“But by the end of the year, the fourth quarter to be precise, we expect strong earnings growth because their earnings will not be impaired by NPLs.”

The governor further stressed that the aim of the parley with foreign banks and investors was not to market the five banks, “but to provide clarity on the actions taken by the CBN and assure the foreign community of the soundness of the affected banks.”

“The Tier II Capital injected into the banks is just temporary and when we intend to sell them to investors we shall invite interested parties to submit expressions of interest for the banks.”

Sanusi, nonetheless, noted that the CBN’s policy does not preclude the foreign ownership of Nigerian banks, stressing: “No law stops any foreign bank from owning a Nigerian bank.

“The CBN will however exercise due diligence to ensure that we attract institutions that are interested in the development of the economy and not just focused on niche markets.”

On the issue of the legal challenges being mounted against the CBN for the take over of the five banks, Sanusi stated that the CBN is conscious of the fact that it will be in court for a while to defend its actions, but that “everything done by the Central Bank was within the confines of the law.
“On the other hand, we are also prosecuting the bank executives for infractions, which means that those suing us would have to decide if they want to challenge our actions or save themselves from jail.”

The CBN governor said the name and shame tactic employed by the CBN was yielding results as some of the debtors are paying up their loans.
He said he had met with the chairman of the Economic and Financial Crimes Commission, Farida Waziri, to express the Central Bank’s gratitude for its handling of the cases against loan defaulters.

The governor said the EFCC was conscious of its role and is being careful not to harass genuine businesses, which had defaulted on their loans as long as they can come up with restructured terms with the banks on how the loans will be repaid.

The decision to target loan defaulters, he explained, was aimed at exposing companies and individuals that had colluded with bank executives in insider-related loans which they had no intention of paying. “It is such people that will be prosecuted by the EFCC.”

Providing clarity on why the EFCC is insisting that debtors issue cheques directly to the commission, the governor said the decision is procedural and dependent on the requests made by the affected banks.

“If the banks have asked that the cheques or drafts be issued in favour of the EFCC, then it is procedural and was not based on any instruction by the CBN.”

Sanusi seized the opportunity to clarify insinuations that the Central Bank acted in bad faith after it approved the accounts of Oceanic Bank in July, only for it to turn around to remove its executives three weeks later.

He said when the audit was being undertaken by the joint examiners of the CBN and NDIC, the management of Oceanic Bank made a request for the approval of the bank’s accounts.

He said, however, he delayed the bank’s accounts when he became the governor of the CBN as a result of the oversight audit which showed its exposure at the EDW, signifying there was a problem.

“But the bank’s management insisted that we approve their accounts so it can pay dividends to its shareholders. So we approved it on the understanding that we would make the necessary adjustments after the auditors had concluded their examination of the bank’s books.”

He dismissed the notion that there was any sinister motive in the decision to take over Oceanic Bank and the four others. “These allegations keep cropping up and I am aware of the story published by the Vanguard newspaper, but this had nothing to do with any attempt by a group from any section of the country to take over five banks.

“It is high time we stopped ascribing anything we do in Nigeria to sectional interests.”

In respect of the sudden downgrade by international ratings agency, Standard & Poors’ last week, Sanusi expressed surprise at the latest sovereign rating assigned to Nigeria by the firm.

"At a time when we have taken steps to improve transparency and disclosure, and secure the stability of the financial system, at a time oil prices are improving, at a time we are making progress in stemming the crisis in the Niger Delta region, and the inflation rate is declining, this really came as a big surprise.”

The governor pointed out that if the agency, which is yet to live down its single “A” rating for Lehman Brothers shortly before its collapse, had downgraded Nigeria three or four months ago, it would have made sense, “but certainly not at this time.”

“I hope S&P can engage with us and review their position,” Sanusi said.

S&P cut Nigeria 's speculative sovereign long-term foreign currency credit rating one notch to B-plus from BB-minus last week, citing its costly bank bailout and falling oil revenues.

Also at the forum, the governor admitted that Nigeria remains under-banked and that the Central Bank will consider proposals that will bring banking services to the under-served.

“The proposal would consider the introduction of regional, Islamic and specialized banking in the country,” he stated.

The CBN forum for the international financial community attracted the interest of several participants, and included representatives from foreign and Nigerian banks.

http://www.thisdayonline.com/nview.php?id=152965

the current rift going on in our financial sector shouldn't be much of a surprise for those of us who have been steadfast with its affairs. first, it started with re-conslidation of banks by the just past cbn governor; prof soludo. that exercise if i'm not wrong didn't favour majority in the nothern axis especially. it was the basic reason why soludo was denied another term hence, an underground propaganda to install someone who will play their script in helping them recovering some of the banks the main target being the high ranked ones. Even vanguard raised an alarm as early as march but no one seem to raise an eyebrow about the issue then.
so i learnt that one of sanusi agenda, is to change ownerships of some banks over the pretence of wroth in the system whereas he'll be carrying out the plan of the said anti-consolidation group. people like sanusi, the new governor of cbn just like many of our leaders past & present have a way of starting a battle making it seem just when actual it's personal ( or for a group of personnels). already its begining to show that this doesnt seem a just battle as sanusi makes it look like. first he doesnt audit all 24banks but 10 of them ( in which i strongly believe its all a formalty as he most likely knew where he was heading), he denies the affected md's a chance of fair-hearing even after it was clearly stated by various experts & analyst that, this is the due process (supported by a government that preaches "due process", then threating them with the efcc. also, how come the banks are schedule to be put for sale soon ( fishy if you ask me. waitin to see the eventual owners @ the end, if they suceed that is).
If i may ask, how many of our banks are free of the accusations laid before these 5banks? i have come to know that a business proposals most notably from seasoned personnels & companies could be laid before banks either to acquire loans or go into partnerships with the bank. how come that of this banks are any different? its not as if the whereabout of the money is unknown. moreover, these people are international figures who have attained success home and abroad they dont deserve their name to be draged in the mud. mind you the international community are watching making it a little much difficult to attain financial security for the country. already, sanusi said he pumped 420billion into the sector only for a massive loss of about 400billion in stock.
why didnt the governor invite the affected md's for clarification instead of sacking them. which even the md's heard over the media not in person. this tells that sanusi is being unfair by all standard (even a man caught in the act of murder red-handed, is given a chance to defend himself in court how muchless this).
this is not to say that the banks themselves dont have their faults but thats a matter for another day. as for the matter @ hand, sanusi is not justified in anyway of his actions so, i don't approve of his actions. thanks

After all this hoopla, as usual Nigerians will go back about their business, and hat will be the end of the story. Why are the shareholders not marching and requesting clarification? Why have the shareholder groups not filed for restraining orders pending the outcome of an impartial hearing? Nigerians huff-n-puff, and blow nothing down. Business goes on as usual and they get schemed and milked dry.

Where will the shareholder groups get the money to start litigation?

otokx:

Where will the shareholder groups get the money to start litigation?

From their back-pockets of course. Come on man, be creative. But if you pay me for consultation, maybe I can tell you other ways.

The first result of Sanusi's tenure is "Standard & Poors (“S&P”) recent downgrade of Nigeria’s BB- foreign currency and BB local currency long-term sovereign ratings to B+ with a stable outlook, where they cited fiscal flexibility constraints".  For all his activities just keep your eyes on the results and effects  before anyone passes passes judgement. 
And let no one say that the rating is irrelevant.

Sanusi on why he approved Oceanic Bank. It was posted in today's THE PUNCH (they were at the event compared to some other newspapers).

" the reason why Oceanic Bank's result came seven months late was becasue I was not willing to approve them. Because of what I had seen at the expanded discount window (EDW). I knew that there was something deeper than what I was seeing. But Ibru went around sending people to come and beg me. On the day of the Banker's committee meeting, she asked to see me and said that they needed to release results because shareholders were complaining, She begged that since the auditor were there anything they found out later would be adjusted later. We allowed them to release the result based on that understanding. I did not know the full extent of the problem until the examination had been completed. This would not have been for public consumption if Ibru did not publish in the newspaper that we approved their results and then sacked her.

hw can u sack md witout recourse 2 d board,shareholders or even given an opotunity of defending thier self,y not finish conducting audit of d whole bank b4 taking action.NIGERIAN SHOILD RISE UP B4 DIS MALLAM KILL OUR INSTITUTNS WITH DAT D SOUTHERN LABOUR HARD 2 BUILD.