The loss declared by Oceanic Bank Plc in its interim report for the period ended September 30, 2009 today was significant but fell short in providing clarity on its true state of affairs.

The bank posted a decline of 58.29% decline in gross revenue to close at N46.830 billion compared with N112.265 billion of the previous year. After the loan loss provision of N 315.11 billion, the Bank reported Loss Before Tax and After the loan loss provision of N400.901 billion as against N36.524 billion profit of the previous year, and the Net Loss recorded closed at N286.036 billion after factoring in the N115 billion tax credit granted the bank compared with N29.082 billion profit of the previous year. The management of the bank has attributed the decline in the gross earnings to the suspension of interest of N93.9 billion on the various non-performing loans.

Though the bank’s fixed assets grew by 43.60%, the Net Assets of the bank at the close of the quarter closed in the negative of N69.206 billion as against N254.406 billion of the previous comparable period. The alarming loan loss provision has again lent credence to proshare loan loss alert in the bank banking sector. The loan loss provision has been the highest so far recorded in the sector; this was besides the N42 billion loan loss provisions the bank provided for in its 2008 full year audited report.

Analysts are unsatisfied with the justification provided by the bank – suspension of interest of N93.9bn (33% of the net loss reported) – without any explanation on the thrust of the declining state of the bank, pre and post the intervention.

A cursory look at the data released indicates very worrying signs for the bank:

1. a 58% decline in Gross Revenues – this indicates that there bank is unable to generate new businesses or this reflects its fair and true business size (after discounting items for which adjustments are being made to correct the overstatement thereof);

2. A drop in all indices across the board – a direct result of the debacle they are locked in.


The result clearly contradicts the bank’s recent announcement of a growth on its performance parameters. This is a worrisome result by all measure.

We await a detailed breakdown of the results to enable us determine the going concern status of the bank; in the absence of a forecast report from the bank.

Source: Proshare