Eleven banks (names withheld) have reportedly scaled the latest round of the audit by the Central Bank of Nigeria (CBN). Three may have been indicted, however.

Fourteen were audited this time around, after the 10 audited last month, which led to the sack of five Managing Directors (MDs).

Sources said when the CBN reconciled the assets of the three banks that failed to scale the hurdle with their liabilities, they were found to be negative, an indication that they are insolvent.

All the three are new generation banks. One reportedly granted a non-performing loan worth about N17 billion.

The CBN is expected to release the result of the audit this month.

Another source argued that the CBN does not have powers to sell any of the banks or buy into them, it can only support them.

"That was what (CBN Governor) Lamido Sanusi's predecessor (Chukwuma Soludo) was doing through the Expanded Discount Window (EDW). The advantage of EDW is that it is tenured.

"What Sanusi has done is to shut that window by injecting N420 billion through ways and means which was why the CBN printed money," the source explained.

He expressed regret that what Sanusi has done has no tenure and there is no legal vehicle to exit (get the money back from the banks). For that vehicle to be created, the National Assembly (NASS) has to pass a law creating a Toxic Asset Management Company."

But CBN Deputy Director and Head of Corporate Affairs, Mohammed Abdullahi, insisted in a statement on Thursday that the N420 billion injected into the banks is a loan, not equity or a bailout.

He decried the "strenuous efforts" by some individuals to "deliberately twist information regarding the (CBN's) recent actions to sanitise the banking sector in order to malign and discredit the entire process."

He said the loan would ensure that they would continue to meet their obligations, and "will be paid back at a premium."

Sanusi himself reminded lawmakers on Wednesday that the CBN Act empowers it "to manage money supply in the economy through different mechanisms."

Abdullahi also denied reports that the plan to introduce Islamic banking is part of an alleged Northern agenda.

He explained that Islamic or non-interest banking, had already been approved by the CBN under Soludo, in line with the Banks and Other Financial Institutions Act (BOFIA).

He recalled that the former Habib Bank was given approval in 1992 to operate a window of Islamic banking which is still operational with Bank PHB (the merger between Platinum Bank and Habib Bank).

The "approval by the CBN under Soludo saw the emergence of the proposed JA'IZ Bank which has been working to raise the N25 billion capital base required. Islamic banking was already in Nigeria years before Sanusi became the (CBN) Governor."

Bail applications will be argued in court today for four of the five sacked bank MDs, seven Directors, and three stockbrokers, all charged with fraud and economic sabotage.

Justice Dan Abutu of the Federal High Court in Lagos will entertain submissions from counsel for former MDs Barth Ebong (Union), Sebastian Adigwe (Afribank), Okey Nwosu (FinBank), and Cecilia Ibru (Oceanic).

Seven of the Directors - Samuel Adegbite, Christopher Alabi, Sanni Adams, Hyacinth Enuha, Isyaku Umar, Bayo Dada, and Raymond Obieri - are of Intercontinental Bank, of which Obieri is Chairman.

One of the stockbrokers is Peter Ololo, owner of Falcons Securities Limited, who owes Afribank N58.9 billion. The other two are Opeodu and Henry Onyemem.

On Monday, the Economic and Financial Crimes Commission (EFCC) filed charges against the former MDs and Directors for incurring bad loans.

Nwosu was arraigned on 11 counts, including failure to take all reasonable steps to ensure the correctness of FinBank monthly return to the CBN between October 2008 and May 2009.

He also allegedly failed to give a true and fair view of the state of the affairs of FinBank to the CBN by incorrectly importing N47.6 billion commercial papers under the Expanded Discount Window in FinBank's statement of assets and liability.

The offences are punishable under Sections 28 (3) and 50 of BOFIA.

Adigwe was docked alongside Ololo and his company, Falcons Securities, for allegedly granting reckless loans worth billions of Naira.

The loans, according to the charge sheet, were approved for eight companies between October 2008 and April 2009 without adequate security, contrary to acceptable practice.

Besides, the charge sheet said he allegedly failed to keep proper books of accounts to wit: classification of commercial papers as contingent liabilities of Afribank.

In the EFCC's charge against Ololo, his company, Falcon Securities, and Adigwe, borrowed N58.9 billion from Afribank without security between 2008 and 2009.

According to the EFCC, the breakdown showed that Ololo conspired with Adigwe to obtain a loan of N29.5 billion, and another N15 billion through Falcon Securities between September and October 2008.

He allegedly got N14.2 billion loan from Afribank in April 2009 in violation of banking regulations, and was granted N200 million between 2008 and 2009.

Ibru was arraigned on 25 counts, among them for allegedly granting N100 billion bad loans, including non-performing ones to seven companies, and another to Edesiri Onateji Ibru without security.

She also allegedly granted over N25.5 billion without the approval of the CBN, contrary to the regulations.

The Intercontinental Bank Directors are accused of granting over N32 billion bad loans to companies in which they have vested interests without security.

The EFCC said they took $10,000 as holiday allowance - in contravention of the code of conduct for banks issued by the CBN - and ensured that the balance sheet of Intercontinental distorted the state of affairs of the bank with regards to non-performing N87.6 billion loans.

Ebong was accused of granting over N150 billion bad loans, and Adigwe also of granting over N91 billion loans without collateral.

All the accused pleaded not guilty to the charges.

However, the anticipated legal action against the take-over of Oceanic by the CBN was not filed at the Federal High Court in Lagos on Thursday.

Lawyer for the bank's shareholders, Ajibola Oluyede, told reporters that it will be filed today.

http://www.independentngonline.com/news/tfpg/article01

http://allafrica.com/stories/200909040173.html

Ohhhh some more humiliations

Yeah but no name yet

This is what you get when people work from the answer to the question.

Those that know this industry will confirm that EDW aside, any fair audit on abuse, insider dealings, and bad loans for the remaining banks will indicted at least half of them. And I mean it.

If really true, and l suspect it will turn out to be true, Granting loans without security, to the tune of Billions of naira, to family members, cronies and companies they have vested interest in, is a grave abuse of "Depositors Trust"in the ability of these CEO's, to manage and create wealth for their customers.

How can i deposit say #50,000 with a bank, when l need a loan of additional #50,000 to improve/expand my business, they would refuse, using some silly excuse or will ask me to go and bring the C-of-O of a storey building located in Lagos!

Yet, here they are granting Billions to their "favored" friends! using my/our money!

Sometime, l feel some of them should be allowed to rot in jail.
They are he ones killing this economy, along with the Political class.

Rubbish crooks

Let them reveal the names jare. .

We need the names of the three banks.

I do not need the names of the 3 banks. In fact this report looks like another media abracadabra as only 11 of the 14 banks were audited. The other 3 being private banks were left out.

You sure?

no am not

me too

lastpage:

If really true, and l suspect it will turn out to be true, Granting loans without security, to the tune of Billions of naira, to family members, cronies and companies they have vested interest in, is a grave abuse of "Depositors Trust"in the ability of these CEO's, to manage and create wealth for their customers.

How can i deposit say #50,000 with a bank, when l need a loan of additional #50,000 to improve/expand my business, they would refuse, using some silly excuse or will ask me to go and bring the C-of-O of a storey building located in Lagos!

Yet, here they are granting Billions to their "favored" friends! using my/our money!

Sometime, l feel some of them should be allowed to rot in jail.
They are he ones killing this economy, along with the Political class. Rubbish crooks

Isn't this what is termed poverty mentality?. Nigerians really do need to shed this mentality! Its too rampant here.
When you deposit money with a bank, you enter a contract with that bank to help you keep the money safely and not to provide loans for your business. Loan provision is at the discretion of the bank! Being a depositor does not automatically qualify you for a loan!

Depositors should stop whining as though they are shareholders.

After all the rush to release the names of the 5 banks, why waste time releasing these 3?

Yes, the audit has been completed but none was found to have any solvency issue. Here's an excerpt from THIS DAY



CBN sources told THISDAY last night that the examiners have concluded their exit meetings with 11 of the 14 bank managements and have reported that beyond routine issues such as provisioning for doubtful loans, facility improvement and capital adequacy, there are no major issues around solvency.
“From the examination conducted so far on the 11 banks there are no solvency issues that could lead to the kind of intervention carried out almost three weeks ago,” said a CBN official.
However, he said the examiners are still undertaking a forensic audit on issues pertaining to corporate governance and money laundering and should they exist, will warrant further investigations.
The CBN official disclosed that of the 11 banks for which the audit had been carried out, only one has issues around technology and software integration challenges that are a carry-on from a recent transaction in the banking sector.
Irrespective of the ICT challenges bedeviling the bank, he said the examiners would return to conclude their audit once that is overcome.
He explained that the audit had been restricted to 11 banks so far because the other three – Standard Chartered Bank, Citibank and Equatorial Trust Bank - are either private or foreign banks, and CBN does not anticipate that their exposure to non-performing loans will have any significant impact on the market.

http://www.thisdayonline.com/nview.php?id=153595

@Papabrowne

Isn't this what is termed poverty mentality?. Nigerians really do need to shed this mentality! Its too rampant here.
When you deposit money with a bank, you enter a contract with that bank to help you keep the money safely and not to provide loans for your business. Loan provision is at the discretion of the bank! Being a depositor does not automatically qualify you for a loan!

Depositors should stop whining as though they are shareholders.

Your ignorance stinks to high heavens!
If your educational level is up to secondary school, provided you weren't playing truancy all along, then l will suggest that you go a pick a copy of the most common Economics Textbook, (I will recommend O.Teriba to you, l doubt you could comprehend anything more advance!).

Check under the Heading "MONEY" and read the sub-topic "Duties/Roles of Commercial Banks".

It is part of the responsibilities of banks (at the macro level) to create Money (wealth).
This is done by offering "LOANS AND ADVANCES" to CUSTOMERS and charging INTEREST !
You are only required to meet the set criteria, to qualify.

You probably think they just lock-up those Billions of naira in the Vault (so that ignoramus like you can force your way-in )

And talking of Poverty mentality, l will not even bother to answer you!
U never reach, walahi!!

Go make some millions, build a few houses in choice areas of Lagos, own choice lands and have property abroad, then come back and see if you are close enough!
Then we can take a look at each others "mentality".

Lousy bloody cunt!

publish the names of the banks asap

Isn't this what is termed poverty mentality?. Nigerians really do need to shed this mentality! Its too rampant here.
When you deposit money with a bank, you enter a contract with that bank to help you keep the money safely and not to provide loans for your business. Loan provision is at the discretion of the bank! Being a depositor does not automatically qualify you for a loan!

Depositors should stop whining as though they are shareholders. @QUOTE PAPABROWNE




You must be the best joke of this year with your unguarded statement and insults to NIGERIANS; i believe u r not a NigeriaN cos if u r the statement and insult apply to only u.

It shows u r yet to finish ur secondary school, i guess u should be in JSS 3 going to SSS 1 thats why, it means u have not started offering Economics.

Ok assuming i dont meet the Criteria, does that give them the gut to give any dick and harry who happens to be their friends, family members and you offcourse loan without collateral.

Surely their interest is vested in this loan given out.
Again Non of them would getany of my sympathy until proven not guilty by the Court.

Isn't this what is termed poverty mentality?. Nigerians really do need to shed this mentality! Its too rampant here.
When you deposit money with a bank, you enter a contract with that bank to help you keep the money safely and not to provide loans for your business. Loan provision is at the discretion of the bank! Being a depositor does not automatically qualify you for a loan!

Depositors should stop whining as though they are shareholders.


@papabrowne
you dont know anything bank's discrimination on giving out loan does not signify poverty mentality. It is true that when you deposit money with a bank, you enter a contract with that bank to help you keep the money safely and not to provide loans for your business and that loan provision is at the discretion of the bank. However, loans should not be based on favoritism and nepotism without collateral. Besides, having deposits in a bank should be one of the criteria banks use in granting loans as most non customers are recommended to first open an account.

Papa Browne is 100% correct. The bank is under no obligation to provide anyone with a loan. It is completely at the banks discretion even if you meet all their conditions. In the UK a bank can refuse you a loan and is not obliged to give you a reason why. All those dissing him haven't got a clue!

@ Papillo, does that mean that London banks give billions of naira abi na Pounds to their friends and cronies without collateral?? since they don't have to give any explanations to customers who they denied loans,

lastpage:

@Papabrowne
Your ignorance stinks to high heavens!
If your educational level is up to secondary school, provided you weren't playing truancy all along, then l will suggest that you go a pick a copy of the most common Economics Textbook, (I will recommend O.Teriba to you, l doubt you could comprehend anything more advance!).

Check under the Heading "MONEY" and read the sub-topic "Duties/Roles of Commercial Banks".

It is part of the responsibilities of banks (at the macro level) to create Money (wealth).
This is done by offering "LOANS AND ADVANCES" to CUSTOMERS and charging INTEREST !
You are only required to meet the set criteria, to qualify.

You probably think they just lock-up those Billions of naira in the Vault (so that ignoramus like you can force your way-in )

And talking of Poverty mentality, l will not even bother to answer you!
U never reach, walahi!!

Go make some millions, build a few houses in choice areas of Lagos, own choice lands and have property abroad, then come back and see if you are close enough!
Then we can take a look at each others "mentality".

Lousy bloody cunt!

Looks like you are trying to be smart, trying to look intelligent here.

The problem is, you don't run a bank on SSCE Economics textbooks.

In addition, it is only when you really do have a poverty mentality, that you feel that every mention of the word refers to you. You know, it's like a complex.
Normally, the rich/rich minded will gloss through the statement and say: " oh, they are referring to them."

The question is 'Can u you sue a bank for refusing to give you loan even if you met all these criteria and expect to win judgement? I think not for many reasons.

The point is that these CEOs run these banks like gangstars. They do as they please and ask the boys to tidy up the books. When the CBN boys come around they ask them to name their price and business continues as usual. Now like the mafia, everyone is running helter skelter b/c a new cop has come to town that wont have it.
 
@Topic
With the result of this last audit neither here nor there it confirms my suspicion that the intervention of the CBN Governor is based purely on scapegoat/scare tactic.

He is not in a position to approach the govt for any more money to facilitate his reforms and so which ever bank has issues now will be tactically ignored.  Unless Sanusi wants pple making a run on these banks there will be no more names.

pappilo:

Papa Browne is 100% correct. The bank is under no obligation to provide anyone with a loan. It is completely at the banks discretion even if you meet all their conditions. In the UK a bank can refuse you a loan and is not obliged to give you a reason why. All those dissing him haven't got a clue!

     @Papa Browne and Pappilo what a DISCRETION!. Discretion that only allows FAMILY MEMBERS, FRIENDS AND CRONIES ONLY to qualify for bank loan(s).

  Am surprise that learned people like you guys can not call a Spade by its real name.

Friends, what these bank CEOs did is WRONG AND DEVILISH even if everybody is in SUPPORT of it.

Imagine Oceanic MD defrauding her (Family) Bank! What will happen if she is allowed to run a company that is owned by (WE ALL) government?

i know the names of the three banks but i wont tell.

this is serious, hope depositors will have a save ground afterall.

No name yet? Doesnt it sound foolish after naming other five?

floriana:

i know the names of the three banks but i wont tell.

Please tell us na or possibly tell me secretly

If Bank of the North (Unity Bank) is not among the troubled banks, it will be clear to everyone what sanusi is up to. Soludo gave them a 70 Billion lifeline during his tenure so it is obvious that they are not on a strong financial footing.

abhosts:

If Bank of the North (Unity Bank) is not among the troubled banks, it will be clear to everyone what sanusi is up to. Soludo gave them a 70 Billion lifeline during his tenure so it is obvious that they are not on a strong financial footing.

which kind logic be ya own? If Soludo give Unity Bank lifeline, no be say dem for don take dat lifeline fix their problems? To just assume say because Unity receive lifeline under Soludo mean say the bank still dey in trouble is irresponsible. abeg make we try comot tribalism for our analysis.

make we wait and see. I know say dis Sanusi been show small rascality with de way wey him take fire CEOs, but I no sure say him get any northern agenda. But if Sanusi rascality result to recovering over N60billion in a matter of days, then me I no vex with am.

BON cannot be among. that's for sure.