If these banks are this bad, why is the CBN trying to sell them, why have they lined up a bevy of willing buyers for banks that are supposedly dead? Shareholders will not allow the CBN to take over what the CBN did not set up. The CBN’s role is to regulate banks, not to manage banks and definitely not to sell banks it does not own.

The CBN's role is to regulate banks, and as well act as a fiduciary to debt holders, in this case, depositors as well as bondholders.

It will be illegal for the CBN to liquidate any bank without a good reason, and even such will have grave consequences to shareholders, depositors, and evidently on the economy as a whole.

If the banks were really that bad, its only the the interest of shareholders that the banks be sold or merged with another of a stronger influence to provide synergy.

E.g: Let's say Intercontinental Bank merges with BNP paribas, shareholders stand to gain from tremendous opportunities that abound in foreign investments to which BNP paribas is well known to be a player.
This will also give intercontinental an opportunity to raise cash in form of equity and debt anywhere in the world.

The downside for shareholders however is that they'd loose a percentage of their stake when valued with the overall net value of the holding company, however, the share value of their stock stand to rise tremendously!

Depositors and customers stand to benefit from such synergy given a diverse range of products and services that will be available to them. . . . . and in the end, everybody is happy!

However, i believe its not right for the central bank to compel shareholders into such agreement. It should be a decision taken at the discretion of the bank's management.

However, i believe its not right for the central bank to compel shareholders into such agreement. It should be a decision taken at the discretion of the bank's management.

Violent you hit the nail on the head here

CBN shdnt force the sale of the banks, it should be a joint decision between the shareholders and other stakeholders
thats how i feel about that.

Sanusi has become too controversial for that position. Simple.

naijaking1:

These quotes were asked for by you guys as proof that the economy is going sour, now you seem irritated by the truth in these articles

And am still waiting for proof that "the economy is ruined" or perhaps you dont understand English.

Is the US economy ruined or is it on the rebound? Cos they seem to be suffering from the fastest decline in bank lending in their history.

I have been magnanimous enough to allow you guys to explain yourself away by saying "lending is declining. . . . but the economy is still growing" (8.2%, 4th Q, 2009). . . now the next thing is for you to prove that decline in lending is Sanusi's fault, but you seem to think going to pull up more quotes from Alaba market traders will prove that Sanusi is responsible for credit-contraction. . . .it seems you have no appreciation of a business cycle. . . .  thats why I am waiting for you guys to also tell me that Ben Bernanke is also responsible for US credit-contraction by same measure. . . .

The whole problem is that CBN did not intervene at a point when it ought to have rescued the banks from the rippling effect of the global crisis which saw the price of oil dropped from a staggering $140 per barrel to $30 per barrel which in turn led bankruptcy on the part of oil merchants who took enormous loans from the banks without good collateral,

These, along with the crash in stock market sector, any smart Governor will plan a cushioning effect on the banking sector by injecting capital to protect against a windfall.

Rather, our dear Soludo, still suffering from his hypnotically delusioned mindset of a "finance guru" who engineered the capitalization of Nigerian banks, lied to us about how well insulated we are against a global crisis!. . . . .  .wow!!!!! {the biggest lie ever told in the history of mankind}}

People should have asked questions, and directed much of this blame at him for selling us imaginary bridges and raising our hopes as well as for putting his political ambitions above all else in a time when the biggest economies in the world were crumbling to their feet!

I have never been a great advocate of Sanusi, but i must admire the man's courage to expose the rot and malpractice in the banking sector, not minding whose ox is gored.

However, one thing i disapprove of about his approach  is lack of exit strategy before beginning!  His handling of the whole scenario played out to people's suspicion of an ulterior motive, because from the beginning, he seem to have announced his intentions of selling the banks, without giving them  a benefit of doubt or time to handle their crisis.

But for people to blame him for the current slow growth the country is witnessing is preposterous at most.  Anybody with even the basic knowledge of economic cycle should realize that every economy experience fluctuations and periods of expansion and contraction, one of the most common xtics of a contraction however is a squeeze in credit intermediation.

In the UK, US, France, just name it, bigger corporations with big market capitalization found it extremely difficult to get access to credit in early to mid 2009-----why? because the economy was experiencing a recession, that's why.

It is only embarrassing for folks to keep shouting Sanusi's policy is "anti growth" because their is a squeeze in credit intermediation, and more embarrassing is the fact that the NSA boss who has no formal education on management of fiscal policy or risk management in financial intermediaries would open up his buccal cavity and join the semi literate ones.

@Ibime
you like to speak english o Ibime

i have raw data to show the economy has grown during the mans tenure

anyone who has contradictory economic indicators should put it here

we dont want no 'rabble rousing' from some disgruntled bizmen in olodi apapa/alaba

Ibime did not even read the link he posted. The article in the link was written by Razia Khan of Standard Chartered.

Prior to regulatory intervention, the early days of the banking crisis were marked by significant liquidity hoarding, competitive bidding for deposits, and – despite monetary easing by the Central Bank of Nigeria (CBN) – higher loan and deposit rates. By June 2009, credit growth had decelerated sharply to 6.2% y/y from the cycle peak of over 90%.

Note the key point. Credit growth was decelerating rapidly even before Sanusi announced his intervention in August '09 so the problem pre-dates Sanusi's appointment as CBN Governor.

http://www.businessdayonline.com/index.php?option=com_content&view=article&id=9991:getting-to-grips-with-nigeria-gdp-&catid=117:news&Itemid=349

^^^ hehehe. . . . I did read it. . . . I put it out there to show Mikeansy what a balanced and informed view of the economy looks like, unlike his quotes from disgruntled Alaba market traders.

naijaking1:

If you wanted us to take you seriously, you could have at least started with a true statement. You're one of the biggest, loudest, and "blindest" supporters of Sanusi. You just forgot to read your own posts.

you never tell us which of your girlfriend's SLS thief?
you blind hatred for the man is baffling.
my posts show a balanced view of his actions.
i have severally stated that for a reserve bank governor, he is too loquacious.Reserve bank governors talk less, rarely appear in the media and when they do, they just state facts,markets respond and they retreat back to their reverred corners.They also try to be less emotional than SLS seemed to be.
Others and more importantly more significant persons might have held such views abd aired it to him as he seems to be retrieving from the limelight and talking less in general.

I support his actions and moves against the rascality and recklessness of Ibru et al.
If Soludo was alive to his responsibility and not busy posing around the place like a showbiz star,those CEOs should have long been gone or the operating environment made not condusive for their acts.
Not only did Soludo aid their recklessness,he enabled them to create a myth that these banks were strong and viable.
If your hatred is borne out of the fact that your shares crashed after the finacial gangsters were booted out, then you are as good as Madoff's clients.
SLS is in a hopeless situation.He is damned whether he does or not.
If these banks failed soon after, he would have been accused of not acting.
Now he has acted, he is accused of either high handedness or being selective and not catching all the culprits at the same time.
I ask you, how many culprits did Soludo catch during his time?
You want SLS to bail out the banks and leave Ibru still in charge of Oceanic and Akingbola in charge of Intercontinental?
There is nothing i have said here that has not been said before,without even going into the economic basis of his actions but your hatred for the man is almost blinding.
I am no fan of Sanusi as i have a disdain for most people in the public space (my posts prove that) and SLS couldn't care less whether i was a fan or not but that does not take anything away from the fact that he acted right under the circumstances.
If you are looking for who to blame for the losses in the market,go look for Ibru et al and even their fellow gangsters that are still in the industry.

Gusau is dancing to a drum that is been beat from a hidden corner.
In a country where insecurity looms large, police men on their way to arrest Ibori are beaten blue and black,foreigners and locals are still being kidnapped and all sorts, Iwonder if Gusau has so much free time on his hands to make illogical comments on banking reforms.

mbulela:

you never tell us which of your girlfriend's SLS thief?
you blind hatred for the man is baffling.
my posts show a balanced view of his actions.
i have severally stated that for a reserve bank governor, he is too loquacious.Reserve bank governors talk less, rarely appear in the media and when they do, they just state facts,markets respond and they retreat back to their reverred corners.They also try to be less emotional than SLS seemed to be.
Others and more importantly more significant persons might have held such views abd aired it to him as he seems to be retrieving from the limelight and talking less in general.

I support his actions and moves against the rascality and recklessness of Ibru et al.
If Soludo was alive to his responsibility and not busy posing around the place like a showbiz star,those CEOs should have long been gone or the operating environment made not condusive for their acts.
Not only did Soludo aid their recklessness,he enabled them to create a myth that these banks were strong and viable.
If your hatred is borne out of the fact that your shares crashed after the finacial gangsters were booted out, then you are as good as Madoff's clients.
SLS is in a hopeless situation.He is damned whether he does or not.
If these banks failed soon after, he would have been accused of not acting.
Now he has acted, he is accused of either high handedness or being selective and not catching all the culprits at the same time.
I ask you, how many culprits did Soludo catch during his time?
You want SLS to bail out the banks and leave Ibru still in charge of Oceanic and Akingbola in charge of Intercontinental?
There is nothing i have said here that has not been said before,without even going into the economic basis of his actions but your hatred for the man is almost blinding.
I am no fan of Sanusi as i have a disdain for most people in the public space (my posts prove that) and SLS couldn't care less whether i was a fan or not but that does not take anything away from the fact that he acted right under the circumstances.
If you are looking for who to blame for the losses in the market,go look for Ibru et al and even their fellow gangsters that are still in the industry.

It's difficult to believe anybody whose 'good morning' is a lie.
Your position on Sanusi is well documented, so is mine. I have said it time and time again that Sanusi is not qualified even to run a community bank. With questionable bachelor's degree in economic from Zaria, and masters degree from Sudan, there's nothing that specially qualifies the man for such an important position. I said 'questionable' because a prince, children of the well to do basically 'buy' their grades from professors in Nigeria very eager to please them. Sanusi could have proved his mettle by doing a program at one of the elite schools of the World, he could have afforded it.
Now, back to Sanusi vs Soludo. Have you ever wondered why Soludo has not publicly stated his position on these issues? Many people agree that despite the amount of problems found at the banks, Sanusi's method aggrevated the situation. Speaking about methods: Soludo had a different method vs Sanusi, and while retrospective analysis are always perfect, Sanusi is trying to use the difference in style to divert attention from his own shortcomings.
It will be interesting to watch Soludo testify under oath in say a senate committe about his tenure and experiences at the bank, until then, it's better to focus on the issue at hand.

Speaking about methods: Soludo had a different method vs Sanusi, and while retrospective analysis are always perfect, Sanusi is trying to use the difference in style to divert attention from his own shortcomings.

soludo certainly ad a different method - he was aware the banks were in trouble because of the incompetence, greed and outright dishonesy of ibru and co - rather than ensure they quietly stepped aside after their first edw bailout, he left them in place to continue as before

masterful

he was fully aware that the people he was supposed to be regulating wee not meeting up but he left them there because they had compromised him.


bravo

oyb:

soludo certainly ad a different method - he was aware the banks were in trouble because of the incompetence, greed and outright dishonesy of ibru and co - rather than ensure they quietly stepped aside after their first edw bailout, he left them in place to continue as before

masterful

he was fully aware that the people he was supposed to be regulating wee not meeting up but he left them there because they had compromised him.


bravo

He was practicing 'quiet diplomacy'

oyb:

soludo certainly ad a different method - he was aware the banks were in trouble because of the incompetence, greed and outright dishonesy of ibru and co - rather than ensure they quietly stepped aside after their first edw bailout, he left them in place to continue as before
masterful
he was fully aware that the people he was supposed to be regulating wee not meeting up but he left them there because they had compromised him.
bravo

Hind sight is always 20/20!
Apart from Sanusi's sustained campaigns of calumny against some of his personal enemies in the banking industry, is there any other evidence you have to support the above position?
I ask you this rather basic question, because not even EFCC has concluded its investigation of the charges against Ibru, Akingbola and others. And of course, no court has agreed with any of the wild claims against them.
So, your theory and suppositions based on facts that don't exist, namely that there were criminal wrong doings by CEOs under Soludo are infact false and unsubstantiated. It is painful that as false as these rather stupid claims have been, well educated people like you have continued to repeat and sound off these lines like empty echo chambers.

mbulela:

He was practicing 'quiet diplomacy'

Before long, we will be exposed to the real criminal of the banking industry: Sanusi or Soludo?

Another good article by Vanguard, enjoy

[size=18pt]Gen. Aliyu’s Observations On Banking Reform[/size]

Editorial Apr 23, 2010

THE comment made by the National Security Adviser (NSA), General Aliyu Mohammed Gusau against activities of Central Bank of Nigeria (CBN) and the Economic and Financial Crime Commission (EFCC) is coming at a time when Nigerians are wondering if the government is not in touch with the business community and the economic reality of our time. The CBN reforms no matter how well intentioned has dealt a serious blow on the economy.
In the first instance the confidence that banking requires was destroyed when Sanusi openly pronounced that Nigerian banks are unhealthy. Secondly, the CBN and EFCC criminalised borrowing and made the lender as well as the borrower of funds criminals.

Reforms all over the world are meant to improve on existing situations, protect jobs and lay a solid foundation. As it turned out the CBN reforms has brought the banking industry to its knees. No bank operating in the country today has not laid off over 1000 of its work force. Many banks have stopped taking deposit thus discouraging banking saving culture that Nigeria needs so badly to mobilise investable funds. Worse is that most investors have moved out their funds and many industries have relocated into the neighbouring countries.

It is a matter of regret that though the international community is hailing the reforms in the open, secretly they know that the right thing has not been done. Some Nigerian businessmen have learnt the hard way when they approached foreign banks for loans only to be told that Nigerians are known not to be good borrowers. The long term effect of the reforms is that credit lines have dried up, local banks no longer give loans as testified by the CBN, deposit rates have crashed and the interbank lending rates remained flat and failed to react to the Central Bank’s decision to retain its benchmark rate at 6 per cent.

The CBN itself has expressed concern at the lack of credit flowing in the banking sector of the economy and has in panic set up a N200 billion Small and Medium Scale Enterprise Guarantee scheme. The secured Open Buy Back remains at low 1.10 per cent, 10 basis points above the CBN’s Standing Deposit Facility rate. Overnight placement is trading flat at 1.20 per cent, while call maintained the same level of 2 per cent. The financial sector has cash surplus of about N354 billion naira.

What is more worrisome is that Nigerians are withdrawing their money from banks. For instance currency in circulation for the month of January 2010 stood at N 1.072 trillion. Out of this amount N 581.727 billion are in the banking system while N 824.456 billion is out side the banking system.

For the month of February the total money in circulation amounted to N 1.053 trillion, of this amount N 689.895 billion is within the banking system while N 814.539 billion is outside the banks. This is alarming. Deposit in the period stood at N 3.766 trillion for January and N 3.912 trillion for the month of February.
While the Central Bank has kept the MPR at about 6 per cent since last July, there has been an evident shift to loose monetary policies to revive lending_related activities, especially as the standing deposit facility was cut to as low as 1 per cent. This, coupled with fiscal expansionary policies, the depletion of the excess crude account and the injection of several billions of naira into the banking system, has boosted systemic liquidity, fuelling the rapid drop in interbank lending rates.
Still, these measures have yet to result in a turnaround in credit to the private sector; indeed the annual rate of growth of credit to the private sector retreated in January to 17.7 per cent year on year, the lowest level since March 2006. It is worthy of note that the growth rate projected by the CBN continues to be well above the consensus view.” As of today the CBN is pushing hard to persuade risk_averse banks to expand their loan books and would not want to tighten monetary policy. In any event the disconnect between the policy rate and banks’ lending rates remains. This is a creation of the CBN which it has no answer for.
The apex bank in an overall effort to get credit to the real economy flowing again conveyed a special monetary policy meeting, especially at a time when most commercial banks are reluctant to lend. A healthy banking sector is one of the keys to unlocking Nigeria’s full growth potential. The CBN management is bent on reversing every policy it met on ground. Very soon it will come up with a modified universal banking which by the look of it is taking the nation back to the era of mushroom banks. The CBN leadership certainly needs help, the humble thing to do is to accept that it has made serious mistakes and failed to deliver sound monetary policy. Then corrections can be made.

http://www.nigeriamasterweb.com/paperfrmes.html

naijaking1:

What is more worrisome is that Nigerians are withdrawing their money from banks.

For instance currency in circulation for the month of[b] January 2010[/b] stood at N 1.072 trillion. Out of this amount N 581.727 billion are in the banking system while N 824.456 billion is out side the banking system.

For the[b] month of February[/b] the total money in circulation amounted to N 1.053 trillion, of this amount N 689.895 billion is within the banking system while N 814.539 billion is outside the banks. This is alarming.

Deposit in the period stood at N 3.766 trillion for January and N 3.912 trillion for the month of February.

Naijaking must be as silly as the articles he reads.

The author said "What is more worrisome is that Nigerians are withdrawing their money from banks". He didnt even bother to give us historical comparison.

He did a give us a comparison between January and February though, which shows a growth in the amount of currency in banks from N 581.727 billion to N 689.895 billion and growth in deposits from  N 3.766 trillion to N 3.912 trillion between January and February.

So how does that tally with "Nigerians are withdrawing their money from banks" and can we have some comparative analysis to back that up? We know deposits shrank by N95bn in March as discussed here, but this lazy journalist couldnt even bother to quote the March decline to back up his statement. . . . and even then, after a growth in deposits of N120bn in February, is one month of 95bn decline enough to draw a definitive conclusion over a period of 8 months since the banking reforms?

As for credit slowdown, we have also discussed this extensively and even pinpointed the sharp deceleration in credit even pre-Sanusi. Without going over the same points again, lemme add that the culture of margin-lending (lending depositors funds to moguls to buy shares in same bank) which largely drove the sharp rise in credit growth in 2007/2008 is over.

Why do fools control the National debate? This article is laughable and so biased, even a JSS3 student could pick holes in it. BTW, Naijaking should throw his brain in the dustbin.

^^^
When you stop attacking the messanger of news you don't like, that's when you would have really grown up.
First, you attack Chief Bassey for saying his opinion about Sanusi, the you attack the Renaissance professionals, then you attack Chief Afolayan, then Maijama, now Gen Gusau is on your chopping block. Instead of attacking the editor of this article, you can write a rejoinder.
The more truthful their position the more venom you spit on their persons, and not even on their message. At some point, you should really be ashamed.
The point the author of this article is showing the World is that the people trust our banks less now than they did before Sanusi. Most of the cash in circulation are hidden under the pillows in Nigeria, thanks to Sanusi's messages that led to loss of confidence. Why don't you you get it?

^^^ All my arguments are factual and backed by statistics, unlike someone that can sell an idiot like you a story without concrete facts. A lazy journalist says that deposits declined, and gave statistics that showed us that deposits increased. . . and you are coming here to quote him for us. . . abi you think we are primary school students?

naijaking1:

Most of the cash in circulation are hidden under the pillows in Nigeria, thanks to Sanusi's messages that led to loss of confidence. Why don't you you get it?

If you had any brains in you, you would go and check the figure in circulation one year ago.

Just because Naijaking has an IQ of only 80 today doesnt mean he hasnt shown improvement. Maybe one year ago, his IQ was only 70.

Point being. . . If more cash is stored at home than in the bank today, you need to go and check if same was the case last year. . .or even worse. . .  before coming to expose your lack of intelligence. . . I hope you know that only 16% of Nigerians own a bank account and historically, there has always been more currency outside the banks than in it.

The journalists even tells you that the currency inside banks increased [/i]from  N581.727 billion to N689.895 billion while the currency [i]outside the banking system decreased from N824.456 billion to N814.539 billion over Jan-Feb. . . . then an idiot like you is telling me that more and more Nigerians put their cash under the pillow. . . with your level of intelligence, Im sure I can sell sand to you even in a desert.

Please drop your brains in the dustbin on your way out.

guys,i beg make una try argue devoid of insults.
It only detracts from your points.

It's difficult to believe anybody whose 'good morning' is a lie.
Your position on Sanusi is well documented, so is mine. I have said it time and time again that Sanusi is not qualified even to run a community bank. With questionable bachelor's degree in economic from Zaria, and masters degree from Sudan, there's nothing that specially qualifies the man for such an important position. I said 'questionable' because a prince, children of the well to do basically 'buy' their grades from professors in Nigeria very eager to please them.

how i manage to argue with someone who thinks like this is a miracle

just like Dagrin would say, "u never holla"

u dont know jack

^^^^
I just tire for the guy.
I am beginning to think his issue with SLS is personal.
Get his number from Jarus, give him a call and settle your problem with him and stop disturbing us with this twisted logic you peddle here.
Having confirmed in the past that you pain is rooted in the loss you suffered in the stock market,maybe SLS may be able to settle you.
and we can have peace here and arguments devoid of blind emotions.

mbulela:

^^^^
I just tire for the guy.
I am beginning to think his issue with SLS is personal.
Get his number from Jarus, give him a call and settle your problem with him and stop disturbing us with this twisted logic you peddle here.
Having confirmed in the past that you pain is rooted in the loss you suffered in the stock market,maybe SLS may be able to settle you.
and we can have peace here and arguments devoid of blind emotions.

LOL

mbulela:

^^^^
I just tire for the guy.
I am beginning to think his issue with SLS is personal.
Get his number from Jarus, give him a call and settle your problem with him and stop disturbing us with this twisted logic you peddle here.
Having confirmed in the past that you pain is rooted in the loss you suffered in the stock market,maybe SLS may be able to settle you.
and we can have peace here and arguments devoid of blind emotions.

no wonder

My sincere apologies @ Naijaking1

What is more worrisome is that Nigerians are withdrawing their money from banks.

For instance currency in circulation for the month of January 2010 stood at N 1.072 trillion. Out of this amount N 581.727 billion are in the banking system while N 824.456 billion is out side the banking system.

For the month of February the total money in circulation amounted to N 1.053 trillion, of this amount N 689.895 billion is within the banking system while N 814.539 billion is outside the banks. This is alarming.

Deposit in the period stood at N 3.766 trillion for January and N 3.912 trillion for the month of February

This is really funny!

It shows the lack of insight and attention to details.

More absurd is the fact that the dude that wrote this jargon intend to use the figure to prove a decline in consumer's confidence in the banking sector, however, the poor developed brain journalist only ended up portraying how lazy and dáft he really i

Something was 1 and now it is 2, and in his own definition, that shows a decrease!. . . kai!

I probably wouldn't have felt the impact if a Nairalander, presumed to be well educated hadn't been so quick to use the said article to back up his claim. It all shows the level of academic decadence we are witnessing.

How did we get here? How did ,the good intentions of CBN suddenly have the economy on its knees? what went wrong? Was it a mistake to have come down with a hammer on the banks? Was Soludo's approach of handling corruption in the banking industry with kid gloves apt? if so wouldn't the foundation have given way someday? Please somebody enlighten me. What is the middle course between the two approaches? we need a solution in order to get the economy back on its feet; to get businesses active again; the housing industry booming again, commerce up again, manufacturing,etc. We need this fast as we enter our jubilee.

houvest:

How did we get here? How did ,the good intentions of CBN suddenly have the economy on its knees? what went wrong? Was it a mistake to have come down with a hammer on the banks? Was Soludo's approach of handling corruption in the banking industry with kid gloves apt? if so wouldn't the foundation have given way someday? Please somebody enlighten me. What is the middle course between the two approaches? we need a solution in order to get the economy back on its feet; to get businesses active again; the housing industry booming again, commerce up again, manufacturing,etc. We need this fast as we enter our jubilee.

The first step to progress is removing the obstacle to growth. Let Sanusi Resign.

mikeansy:

The first step to progress is removing the obstacle to growth. Let Sanusi Resign.

ha ha ha ha!!!
and let Soludo return and continue his love in with gangsters and rascals that only bow at the altar of greed.

mbulela:

ha ha ha ha!!!
and let Soludo return and continue his love in with gangsters and rascals that only bow at the altar of greed.

Perhaps Sanusi and Soludo are the only two CBN Governors we can have?

mikeansy:

The first step to progress is removing the obstacle to growth. Let Sanusi Resign.

word!

lets bring back that golden age of bankin - open account and win a car

and all those bank hosted reality shows - apprentice dancing abi wetin call

sanusi is probably exactly what the situation calls for - those bankers were what is known as rockstar ceos always in the media - just like sanusi

an invisible cbn governor would not be able counter this smear campagin

mikeansy:

Perhaps Sanusi and Soludo are the only two CBN Governors we can have?

according to the guys in the house Soludo did a sterling job the last time.
Why look beyond him?