freezy:

Femi, just to point out a few things. . .

Bank's dont give bad loans. Loans go bad when they do not get repaid as and when due.

The primary duties of any bank is as follows:

Make loans available to those who need them
Act as an intermediary between those with surplus and deficit funds

Lastly, there is no law anywhere that says loans must be collaterized. You are only collaterizing for your own safety.

Fhemmmy:


I love it when someone talk civilized without yabbing or cursing.
Here is my take.
Every bank in Nigeria gives Collaterized, depending on who they are dealing with.
Like you said, they do so against safety, so tell me, how could someone approve billions of Naira without such safety, how come someone allow someone to take such loan and yet do nothing to recover such loans till the banking watchdog was breathing down their necks?

agabaI23:

Can you also tell me why the CBN pumped 420billion into a private company without legislation that will enable the recovery? It is neither an equity as he denied he is nationalising the banks nor a loan.

What's the geographical spread of Citibank in Nigeria? I was told by a Citibank banker that they ve got no individual banking service in Nigeria. I think they are only for institutional bankers, big conglomorates, govts and investors as a  conduit for capital flight

What's the geographic spread of Standard Chartered Bank in Nigeria as well?  They all have limited penetration into the Nigerian formal sector. These two banks as mentioned represent 8.3% of the banks in Nigeria and Chartered bank has branch locations in only 6 states  out of 36 states including FCT, so their market coverage is  very limited. I am yet to find a Citi location in Nigeria besides their huge edifice by American Embassy in Nigeria.  Also your assertion seems  to imply that Citibank is solid, it was bailed out by US govt and it's share sold for less a dollar , so an investor in Nigeria who held Guiness and Nestle shares   was worth more money than an investor who held citibank stocks.

Fhemmmy:

Naijaking, i am so sure that the firing of the MDs are not just cos they have offered bad loans to the people, however, i am sure it is cos of who they have offered them to, and was there any kick backs?
I can bet with almost anything that there were kick backs inform of brown envelopes, money been stashed in the deep freezer somehow, and like i said, time will tell and we will know more.
So if there were more to the loans, they need to be jailed for bribery.
If they have given just bad loans without collaterals, they needed to be fired and be made to answer for such.
You asked when will i learn? i am already learning by sharing ideas, and reading from people like yourself, cos i never said i know it all.

qblaze:

First of all, there is no evidence that foreign banks have rejected LCs. Even if they have, it will not affect banks that have passed the stress test. In case you do not know, some of these banks are going to the market very soon to increase their capital base through bonds.

I doubt if they will have such problems when it is obvious that they can withstand external and internal shocks.

An LC does not have to be a credit facility. If you are a businessman and your bank can no longer support your business, simply move your account to another bank.

BTW, I find that snide "normal naija" remark very distasteful. Do not use it again when you are referring to me.

ilohim:

I have always said it & will continue to say it:Yaradua had no buiness employing Sanusi Lamido as CBN governor;a man who studied Islamic studies in Sundan, his total banking experience if I am not mistaken is not up to 5 years, yet we have seasoned bankers who have over 30 years experience,they were not good enough;he was the only 'seasoned banker' in the eyes of government,what else were Nigerians expecting?!
Even when people raised the issue of Federal Character, the president shut his ears and brought in their hatchet man to destroy the banking sector in the form of 'selected cleansing', yet worse banks are still standing, eg Unity Bank and the same CBN says the remaining banks are 'sound' what a laff!

Sanusi has ended up eroding public confidence in the whole banking sector,both home & abroad, from all the comments he has been making in various interviews he has granted after his 'selected cleasing',his actions were guided by deep rooted, ethnic,tribal & religious sentiments; afterall, he has also said that Islamic banking is the solution to Nigerias' banking sector problems, when Nigeria is not an Islamic country.

For me he deserves an award: 'The Banking sector destroyer for the Year 2009'.

Kudos, CBN governor, you have done the Northerners proud!

jacobs123:



if i'm not mistaken,Sanusi definitely has more than 5 years banking experience. Please who are the seasoned bankers with over 30 years experience that you talked about? I hope it includes Erastus Akingbola, Joseph Sanusi, Otunba Subomi.

Fhemmmy:

Good question, and i will be back here to read the response.

naijaking1:

If you're surprised that sanusi is not an experienced banker, then you ought to be surprised that Yar'dua is from Katsina.

Fhemmmy:

Please dont send worms into my computer, cos that name Yar'Adua is like a worm.
BTW, i dont keep track the list of the bankers in Nigeria till this started, and i will start to keep track now, and be sure to know who is who in the banking industry.

Fhemmmy:

On that particular one, he failed flat and made a booboo.
I never said Sanusi is the best for the job, but i support him firing those fools at the helm of affairs in those banks.
I just support is getting rid of them.
Am i in support of him giving 420B to the banks? not at all, cos i think the problem was as bad as to need such money, nor good enuf without a plan on how to recover the money.
So as far as i am concerned, Sanusi shd be fired too soon, cos he has given a bad loan.

But at the end of all these exercise, we will have better banks and Sanusi will be gone.

3doorsdown:

@ back2back & Naijaking

What should Sanisi have done, close his eyes while unqualified people with connections get billions of naira in non-performing loans without adequate security. Meanwhile, legitimate small businesses which are the economic engine room for growth of any advanced economy are denied loans for growth just b/cos they arent connected to the bank md. Thanks but not thanks. If you want to build a house, make sure your foundation is SOLID, no matter what it takes, else you'll not live in that house very long. Let us swallow the bitter pill now and get it right for OUR future. This will also serve as an eye-opener to other bank mds to clean up their acts and fly straight. I'm 3doorsdown, I approved this message.

naijaking1:

Thanks for that question, like I said earlier, risk management is only one aspect of banking, there are other departments--equally important. This is where Sanusi's lack of experience and sophistication as a banker comes in. He could have gone after the CEOs in a way that doesn't give them any excuses, if he had really wanted to clean the system. Right now, he's playing to the gallery.

Deep Sight:

Nigerians are so silly. We hail anything that appears "action" oriented. James Bond?

Sanusi's actions were not only rash and stupid, but they will also have disastrous effects on the banking industry.

As a Regulator, he is doing great harm to the Nigerian Banking Sector, and has shown shocking immaturity and ignorance.

The 420 Billion Cop-Out is the most blatant illegality in the history of Banking in Nigeria. Printing money and then injecting such public funds into private enterprises, without a legislative imprimatur.

tunde300us:

@ 3doorsdown: Y not just react to the post instead of just being silly.Which one of the comments by Deep sight dont u understand?
Dem say sanusi was hasty and rash in his actions
Dem say the man printed naira without legislative approval,i think u said he was right abi ?
And finally he will end up destroying the banking industry with his actions .
Well my own take is dis,Nigeria will still rule this world whether u like it or not,but that time sha, oda countries would ve let us for oda planets