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Nairaland Forum / Nairaland / General / Business / Sanusi's Goof! Union Bank Was Never Insolvent! (5411 Views)
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Sanusi's Goof! Union Bank Was Never Insolvent! by comprende: 4:21pm On Jun 14, 2011 |
BH Exclusive - The Violation of Union Bank Plc https://www.proshareng.com/news/13994 |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by crispgg: 4:48pm On Jun 14, 2011 |
I hope that those nairalanders who think that Sanusi is a messiah will have a rethink now. All those MD's he appointed are having the feast of a lifetime. The guy at Intercontinental too de chop hin own passe passe. An article in the guardian of today showed that around 40,000 people have lost their jobs to Sanusi's indiscretions. CBN staff complain that he does only what he thinks fit, doesnt take advise from anybody. By the time the guy finishes with our economy we go hear am o! I only hope Jonathan gets rid of him before then. |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by Nobody: 5:00pm On Jun 14, 2011 |
yawwn the return of wetin call ' renaissaance prosti-tutes' |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by OmoTier1(m): 5:42pm On Jun 14, 2011 |
crispgg:nonsense! |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by Badesh(m): 5:55pm On Jun 14, 2011 |
@ Poster, wella. For oyb, your alias is similar to OyO (On your Own). Are the facts presented being debated by you or you just have decided to feign ignorance?. Do you know the quatum of hasty decisions that have been taken by this so-called irrational fulani man?. I recall after the days of IBB, the economists that brought SAP (Olu Falae & Co) opined that the scheme was in stages for which they had expected that they will be reeled out in batches. But for the man ruling with the gun, he just could not see any reason why a wrong doing should not be used to right an initial wrong. Suffice is to say that even Professor Soludo had mapped out these work-out strategies for banks within the nation and was only being careful with their implementation before this god-forsaken risk manager came on board. He just executed everything on the table just about the same times, haba!!!!!. Are you aware that as at the time of the CBN intervention, a bank like Unity bank had not been in CBN clearing house as a bank for months?. Will it please you to know that another bank had not publish its annual financial for about three years in a stretch?. These banks were left of the hook despite the enormity of these offences and you tell me the man called Sanusi was not representing some interests!!!!!!!!. The so-called interim management of the rescued banks obviously were surprised at what they met on ground as they were not as bad as they were painted ab initio. Comrade, only time will tell where the pendulum will swing but it is obvious that as it is said in yoruba parlance "it is only the elders that can determine the angle for which a tree might fall when a kid is busy cutting same in the bush". Adios |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by crispgg: 9:04am On Jun 15, 2011 |
@Omo-Tier. I am not suprised, most Nigerians are being fooled at a new level. You have a vendetta, move against your enemies (whom you are as bad as) and paint it in the eyes of Nigerians as if you are the messiah. Please just be unbiased for a minuite. How did Unity bank survive the clampdown? How come forex black market operators have never had it so good? Did Sanusi not give out a loan beyond single obligor limit to a company owned by one of First bank non Executive Directors while he was still an ED in FBN? The loan went bad and thats the same crime he accused the other MDs for. Abeg shine ya eye! |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by Nobody: 10:24am On Jun 15, 2011 |
Sanusi is on devilsih mission. |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by 702: 10:29am On Jun 15, 2011 |
quite remarkable! |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by otokx(m): 12:23pm On Jun 15, 2011 |
SANUSI sure does have some questions to answer |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by Pukkah: 1:47pm On Jun 15, 2011 |
There are a number of specific and verifiable allegations here that should excite any independent mind. While I do no support any form of executive recklessness especially in banks but we should never allow anyone to endanger or destroy our system in the guise of reforms. This is why an independent enquiry should be set up and made to dispassionately look at the issues that have been oozing out from the so-called rescued banks. These issues have become too loud and too important to be ignored. |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by YoursGEJ(m): 9:32pm On Jun 15, 2011 |
@poster, you mean r.ap.ed |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by informed(m): 9:51pm On Jun 15, 2011 |
Lamido Sanusi is only pushing a northern agenda that started with Umaru Yar Adua. Remember how Soludo's policies at curbing inflation was countered and how he was directly humilated by the promotion of his vice president at the the CBN then, Shamshuideen to the portfolio of minister of finance. My personal research indicated that at the end of OBJ's tenure and the height of Soludo's capitalisation, the north was never comfortable with the idea that the banking sector of the Nigerian economy was majorly controlled by the South except one bank - UNity bank which was only existing on sentimental grounds. And it was decided that power must change hands which was deliberatly kickstarted by Sanusi. The issue of corporate abuse most of the bank MDs were involved in only empowered Sanusi to carry out that agenda with ease. There are lots of question marks in the present CBN reforms. Why is Sanusi in a haste to sell off the BANKS? |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by POTUT(m): 10:24pm On Jun 15, 2011 |
From the onset of these CBN reforms, I saw the issues like this: Sanusi was never fair-minded in the reforms. He didn't care about the economy and didn't even understand the impact of his actions on the nation. Sanusi had vendetta against some Bank chiefs who had belittled him and called him names as peers. Their own abuse of their positions as bank chiefs only gave Sanusi justification to move against them. Ordinarily, he could have reined in the bank chiefs of Oceanic, Intercontinental and Bank PHB without so much ado. He had the facts, and as the marksman regulator, ought to have removed them and their boards without affecting the business of the banks. Now he has shot the helmsmen together with their precious cargo - the bank employees and the image of the bank. Anybody can find justification for bringing down his enemy. I support an independent, disinterested inquiry into the activities of the rescued bansk and their rescue teams. They all stink! |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by gbolozy: 10:25pm On Jun 15, 2011 |
SANUSI, Sanusi, you go kill us o,,,,see the latest for the current Newswatch Mag. About Afribank, How the Mugus wey dem send to come manage bad situation,,,dey busy loading costumers doe out, Sanusi,,,heeennnnnn?, only God know ur plan sha, but, me think dat all those new m.ds na to chop and clean mouth, BUT OIL MUST SHOW oooo, |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by splashbaby(m): 10:40pm On Jun 15, 2011 |
Sanusi! Sanusi!! Sanusi!!!, A northern agenda |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by MAYOWAAK: 11:27pm On Jun 15, 2011 |
Almost two years into his stewardship at the apex bank, Sanusi Lamido Sanusi receives a down-to-earth appraisal of his banking ‘reforms’ by AKPABIO UMOYEN-ESSIEN, an Ontario, Canada-based financial analyst and consultant to leading international financial and development institutions. CURRENT Central Bank of Nigeria (CBN) Governor, Sanusi Lamido Sanusi chose the Bayero University, Kano in February 2010 to outline his vision for Nigeria’s banking sector reforms, eight months into its implementation. He said his strategy for the Nigerian banking sector (if he still remembers, given that there is yet no documented Blueprint) will be based on four pillars namely: • Enhancing the quality of banks; • Establishing financial stability; • Enabling healthy financial sector evolution; and • Ensuring the financial sector contributes to the real economy He was full of fire and zeal and high on the euphoria of public praise after sacking the managing directors of eight banks. Two years on, how has the CBN Governor fared on his outlined goals for the Nigerian banking sector? Few discerning analysts were quick to point out that the reform agenda as outlined above was vague. The quality of banks: The question is: What are the criteria to measure the quality of a bank. Is it quality of services, quality of the bank’s board, management and staff, quality of financial reporting or all of these combined. The CBN Governor never defined the criteria of quality of banks so it is quite difficult to measure him on this goal. But we want to assume that when he said quality, he meant all the criteria we outlined above. So we look at quality of services of banks under two years of Sanusi. What policies have Sanusi put in place to enhance the quality of services of Nigerian banks? Forgive us, but we cannot find anything Sanusi has done to increase the quality of services of Nigerian banks. What we find is that Sanusi’s actions have actually compounded the quality of service delivery in the banking sector. What Sanusi’s hasty reforms have done is to reduce the banking options in the Nigerian banking sector putting pressure on a few banks. Several reports, including banks’ returns to CBN for 2009 compared with 2010 have shown that four banks now control nearly 50 per cent of the market in the banking industry from ten banks that controlled this same share of the banking industry before Sanusi. On deposits, for instance, these four banks have N4.5 trillion out of N10.7 trillion deposits in the banking system. The significance of this concentration of the Nigerian banking space is obvious on the impact this has had on the quality of service delivery. Beside poor services, customers are also subjected to pay all forms of charges by these leading banks as customers have little choice. The four leading banks also now control more than 70 per cent of banking industry profit (Q1 2011 Reports). What Sanusi’s reform has done is to create four banks that are now too big to fail and 20 banks that are too fragile to offer meaningful support to the economy. The current structure of Nigerian banks, a result of Sanusi’s reforms has created the biggest single threat to his second stated goal of ensuring financial stability in the Nigerian banking space. How do you enhance financial stability when a few banks have become financial monopolies? How do you ensure a healthy evolution of the Nigeria financial sector, Sanusi’s third stated goal in the financial sector, when just four banks are now in charge of the Nigerian economy? Where is fair competition in the Nigerian banking sector? How do you strengthen the remaining 20 banks when they have been boxed into an uncomfortable corner in the Nigerian banking industry? The quality and strength of majority of Nigerian banks have significantly dropped in two years of Sanusi. This is basically because Sanusi’s methods have damaged the ability of many Nigerian banks to compete in the Nigerian banking space. Sanusi’s hasty reforms has not had a damaging effect on just the so-called rescued banks, it has also damaged even the banks that were not rescued. Non-rescued banks also sick? The impact of Sanusi’s hasty reforms on even the healthy banks can be easily seen when the AMCON announced its intention to buy toxic assets from the rescued banks. It soon turned out that it was not just the rescued banks that rushed to AMCON to sell these toxic assets. Even the so-called non-rescued banks eventually sold significant amounts of toxic assets (without coercion) to AMCON. And interestingly even after the non-rescued banks sold toxic assets to AMCON, their 2010 financials show that most of them still made significant provisions for non-performing loans. Why are the non-rescued banks still making significant loan loss provisions? Sanusi’s hasty actions on the so-called rescued banks, the publication of the names of entrepreneurs in national papers just because they took loans from banks, impacted negatively on the capacity of several of these entrepreneurs to either refinance or get fresh loans from banks resulting in many of the existing loans of these banks to go bad. Many bankers will tell you that the disruptions Sanusi’s actions caused in the financial system are still reverberating today. The 2010 financials of many of the non rescued banks showed that many of them are still making significant provisions for non-performing loans while even some of them that claimed not to have significant non performing loans are now engaged in public disputes with their customers over non- performing loans in excess of N200 billion, which obviously were not previously provided for. Businesses have been destroyed and many Nigerians have been thrown out of their jobs because their employers can no longer get new loans from banks. Nigerians should not be deceived. Nowhere in a capitalist economy are loans not the normal norm of running a business. What Sanusi’s actions have done is to create the perception that borrowing money to run a business is bad. It is not. In all places all over the world, businesses run basically on bank lending. Lending is the fuel for a capitalist economy. Creating unemployment: Sanusi recently admitted that the rate of unemployment in Nigeria has hit 49 per cent of employable Nigerians. After making that statement, Nigerians should not forget that Sanusi in two years has contributed significantly to this level of unemployment in the country. His activities in the banking sector have contributed to about 40,000 jobs being lost in the banking sector in two years. The disruption that he caused the banking sector and the subsequent starving of funds to the real sector from the banks has resulted in some manufacturing companies either closing down completely, or reducing their production capacity significantly. This act has also led to significant job losses in the real sector of the economy. A good example of what Sanusi’s reform has done to the real sector is what is happening in the aviation sector of the economy. Most airlines are currently struggling to remain in business primarily because their existing loans have been cut off and they are also not getting fresh loans. Today, a good number have stopped flying and the few that are flying are doing so at great risks to their passengers. Yes, the CBN has stepped in by providing financial support to the aviation sector, in the same way it has done in many sectors of the economy. The illogic of CBN special funds: But the illogic of the CBN various special funds intervention in the economy however is like the logic of the executioner who deliberately cuts off your legs and then hands you artificial legs, but then goes around telling the world of the good he has done to you by giving you artificial legs forgetting that you would not have needed those artificial legs in the first place, if he had not cut off your legs. It is also known that artificial legs can never be as effective and flexible as your original legs. It is the same with the CBN intervention funds. They are not as flexible or effective as bank loans though they are cheaper. As any businessman will tell you, for any business to succeed, you need consistent access to finance. The CBN funds are one-off intervention funds which do not give the businesses benefitting consistent access to working capital. That is the challenge with these funds. Most insiders will tell you that the CBN, in a few years will have the biggest portfolio of toxic assets in the banking system. This is primarily because the intervention funds they provided to the real sector has either been used to pay-off existing loans or have been used to buy inputs that had stalled because the businesses were not getting fresh loans from the banks. After the funds have been used for these initial purposes of refinancing existing loans or getting new inputs for production, the lack of fresh loans from banks has resulted in most companies not being able to continue production. AMCON: In as much as the setting up of AMCON (first proposed by Prof. Chukwuma Soludo) is a good idea, Nigerians should watch the activities of AMCON carefully. What is clearly emerging is that AMCON is going to be used to do the dirty works of the CBN. The CBN has positioned AMCON to take over these loans that it has given that would most likely go bad. This is to cover the back of the CBN and prevent public outcry. AMCON currently has over N3 trillion of toxic assets in its custody bought at prices that were negotiated with CBN appointed managers of rescued banks. This could not be described as fair pricing as being touted by those positioning to benefit from these huge assets now in possession of a government controlled body. What determined which assets the rescued banks will sell to AMCON? Could some of these assets that were sold have been restructured and recovered and written back into the books of the banks? What value of assets that could have been recovered has been sold at significant discount to AMCON? AMCON is also said to in future buy all bank toxic assets above five per cent of the banking industry. What does this mean? Besides encouraging reckless lending in the banking sector, it is also careful camouflage to ensure that the CBN creates an impression that the banking system is healthy. I challenge the CBN Governor to tell us where else in the world, where you have a body standing by to buy off toxic loans above a certain percentage from banks? AMCON is an emergency bank rescue vehicle. Everywhere it is set up in the world, what it does is intervene just within a period of time to resolve banking challenges and not to be the toxic loan laundry arm of the CBN or the existing commercial banks. The state of the banks the CBN took over: For close to two years, the CBN has installed its own management in eight banks under the pretext that these banks were about collapsing and need good management to survive. But how have these banks fared under the management of the CBN? ANY staff within these banks will easily tell you how life has been taken out of these banks where CBN installed its own management. For almost two years, all the eight banks under CBN have seen their financial situation deteriorate into critical states. Most members of the CBN installed management were failed managers in their various institutions until the CBN picked them up to come and manage institutions that were far bigger than any institution they have ever managed before their appointment. What has emerged in the two years of CBN installed management are banks without direction and staff that are highly demoralized. Figures obtained from the CBN clearly show that at the close of 2010, all the CBN taken over banks were highly dependent on the interbank market. Of the N900 billion inter-bank takings as the close of 2010, the eight CBN managed banks accounted for over 90 per cent of these takings. These were the same banks that when the CBN took over, he told the world that their indebtedness to the interbank market stood at N247 billion. Now even after pumping in N620 billion into these banks, after they have sold their toxic assets, their net interbank indebtedness is now in excess of N800 billion more than thrice the figure when the CBN took over these banks. From when the CBN management took over these banks till date, while other banks not managed by CBN engaged in aggressive loan recovery drive, the CBN installed management sat patiently, waiting to offload toxic loans at significant discount to the AMCON. In two years, none of the CBN managed banks was able to recover up to 10 per cent of the non-performing loans they inherited. Insiders in these banks will tell you that the CBN managed banks did not consider it their mandate. So what was their mandate? Nigerians should ask. To sit down, earn fat salaries, and wait for AMCON to bail them out while they negotiate the sale of the banks to their cronies or CBN preferred cronies. How sad. Recapitalisation of rescued banks: Two years of motion without movement, Sanusi has not been able to achieve the recapitalisation of a single bank. Sanusi would want Nigerians to believe that this is due to the intransigent attitude of the Boards or shareholders of rescued banks. But the truth is that these banks have not been recapitalized because of Sanusi’s arrogance and fear of being exposed for what he really is, someone out to destroy viable businesses borne of a deep hatred of capitalism. Since Sanusi took over the banks, he has consistently insisted that shareholders have lost their stakes in these banks. This lie he has been repeating consistently hoping that it will become the truth. But everyone knows that no matter how a lie is repeated, it cannot become the truth. This lie was punctured by Sanusi himself recently when he was forced to admit that Oceanic Bank, one of the banks that he forcefully took over has “vital assets.” One of the assets he named is a 10 per cent holding in Airtel. Is it not interesting that Sanusi was willing to sell Oceanic Bank to his preferred core investor despite this vital asset. We all know how valuable Airtel is. Bhati Airtel had to pump in $10 billion to buy over the African assets of Zain. Nigeria is the biggest asset that Zain had and by implication, Nigerian assets will worth a significant part of this $10 billion. Definitely, any financial analyst will tell you that 10 per cent stake in Airtel, if sold today will go a long way in recapitalizing Oceanic Bank even if it does not recapitalise the bank fully. So, why the insistence that Oceanic Bank should be sold by all means? Why the lie that shareholders have lost their stakes when Sanusi knew all the while that the 10 per cent stake in Airtel was acquired with shareholders’ funds? Globally, when businesses are in trouble, they sell noncore assets. Why is Sanusi standing in the way of Oceanic bank selling noncore assets to recapitalise itself? It is not only Oceanic that has vital assets that can be sold. It is also known that Bank PHB has the majority stakes in Spring Bank and significant stakes in Afribank. In an arm’s length transaction, controlled by the shareholders of these banks, they could easily negotiate the sale of these noncore assets to preferred investors and use the proceeds to recapitalise their operations. But the CBN would rather stand in the way of these deals for some strange reasons best known to Sanusi. Credit growth: For two years, Sanusi has not been able to unlock credit growth to the Nigerian economy. Credit growth in the banking system has stalled. In taking over the banks that Sanusi took over, he made Nigerians believe that the banks’ managements were reckless in their lending. This simplistic explanation of a more complex problem has led to the pursuit of the diversionary ego-driven desire to jail a few individuals and the neglect of the fundamental wider challenges facing the Nigerian financial system. Any keen observer of the Nigerian banking industry will tell you that it is not just reckless lending that creates N3 trillion in toxic assets. There are wider challenges within the financial system like the legal framework for recovering loans that has not been tackled. There do exist structural challenges that direct bank lending to a few sectors and a few individuals within the economy engenders. There are infrastructural challenges and there human challenges. Sanusi’s explanations of these challenges have been simplistic and thus the solutions have been pedestrian. Capital: In two years of Sanusi’s reform, both the so called healthy and the unhealthy banks are not in a position to raise fresh capital. The real sector is also strapped for fresh capital as no fresh capital raising has succeeded in the capital market in two years. Instead of the CBN action breeding confidence in the financial system as touted by Sanusi, confidence in the Nigerian financial system has taken flight. Once more, SEC and CBN, both regulatory authorities in the financial system will tell you to blame this challenge on individuals within the system rather than the system. But this is another simplistic explanation of a more complex problem. Retail investors who were the biggest source of funds in the Nigerian capital market have been deeply wounded by the fall in the capital market. But their confidence in the capital market have been further bruised by Sanusi’s statements claiming that they have lost their stakes in the banks. In tackling the CBN-inflicted banking crisis, the regulatory authorities in both the capital market and banking have shown great disrespect for retail investors who have sustained the market in the last 40 years. This attitude may hurt capital market activity for years to come and may stretch into generations if repair mechanisms are not put in place to restore the confidence of retail investors in the Nigerian capital market. The consequence of the neglect of Nigerian retail investors is the current dominance of trading activities on the floor of the exchange by foreign hedge funds, which now control more than 60 percent of trading on the floors of the exchange. The impact of this trading on the stability of the capital market is obvious to any discerning player in the Nigerian capital market or financial sector. No confidence in the financial sector: The evidence of the lack of confidence in the financial system is obvious. The pressure on the Naira has been unprecedented in Nigeria’s history. In two years, the CBN Governor has spent more than $40 billion trying to prevent the depreciation of the Naira without any success. It has led to a massive run down of the country’s external reserves in a period when earnings from crude oil sales have been at a historic high. Even after a widely acclaimed and credible election, the Naira has remained under pressure showing that the uncertainty over elections had nothing to do with the pressure on the Naira. There is a total absence of confidence in the Nigerian financial system engendered by the wrong-headed reforms of the CBN. The style of reforms has shown absolute disrespect for ownership rights creating fear in the owners of private capital. The CBN governor’s tactics and antecedents show he has no respect for capitalism. He is a socialist to the core who by accident has been made the manager of capitalist institutions with enormous powers in a capitalist economy. His goal is to use capitalist institutions to destroy the very fabrics of capitalism in Nigeria and therefore promote his socialist tendencies. His efforts at breaking down the promoters of business in Nigeria are a clear evidence of this tendency. Sadly in his blind urge to destroy capitalist institutions in the country, he has also left the Nigerian economy exposed. Nigerian banks, now largely prostrate, are no longer in a position to finance indigenous players wanting to take advantage of the emerging opportunities in Nigeria’s oil, gas and power sectors of the economy. This has left the commanding heights of the Nigerian economy exposed, to be taken over by foreign companies, compromising ability of Nigerian youths to take over the commanding heights of the Nigerian economy in future. Leadership Newspapers in honouring Sanusi Lamido Sanusi as their man of the year 2010, described him as an “Islamic scholar with deep convictions.” That is what Sanusi is. Any other appellation is a misnomer. His continued stay at the CBN is a death knell for the survival of the Nigerian economy. Nigeria should take stock now, and make the right decisions. Last line: Just as I was getting this material ready for the press, my attention has been drawn to the alarmist statement by the CBN Governor, Sanusi, on The Guardian front page of Tuesday, May 31, 2011: “CBN gives banks date to recapitalise or face liquidation”. According to the report, based on an exclusive interview with The Guardian, “the license of any rescued bank that is yet to recapitalise by October 30, this year will be revoked by CBN, which will subsequently hand it over to the Nigeria Deposit Insurance Corporation (NDIC) for liquidation.” This announcement alone would create panic in the industry and lead to massive run on deposits in the affected banks, further weakening the banking industry as I argued above, sending many more thousands of Nigerian youths to the crowded labour market, causing more social unrest, and above all worsening an already weakened economy that has suffered from lack of access to credit in the last two years. Nigerians should reasonably be worried now! |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by Totfulguy: 11:49pm On Jun 15, 2011 |
@ Sanusi's recklessness and ignorance of Economics and Management is off epic proportion. What else will you expect of a man with background in Islamic Studies. Today he touts the formation of Islamic Banking. If his motive is pure why is he not advancing the formation of Christian Banking and Traditional African Religious Banking (TARB) (I guess his cronies would find it hard to loot the treasuries of the TARB for fear of the Amadiohas and Oguns). Today the an uninformed minority hail him for his blind "Sanusitization". His self-acclaimed sanitization has only left in its trail, the murkiest and dirtiest legacy of job loss, disgrace of respectable men, tears in the economy and a new cabal of mismanagers and looters who are his bossom friends. GOD WILL JUDGE SANUSI LAMIDO SANUSI, who IDEALLY SHOULD BE a CATTLE REARER IN THE FARTHEST HILLS OF KADUNA, VERY SOON. |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by clip: 2:56am On Jun 16, 2011 |
I know the man is just playing a script already written.Agreed that most of the Bank EXCO are corrupt.I believe that if you are not guilty of the offense you be the 1st to cast the stone.Thief calling thief a thief,it is just a matter of time. I wonder what he has done to warrant "the man of the year award". Soludo asked for a bail out from Yar dua,he said the government is not buoyant,only for him to appoint Sanusi and approved stimulus for the so called "Out of Favour Bank" I wonder what would have made Union Bank be included in the list.With all their clumsy and difficult system of operation.Check the list of the major shareholders of first and union bank,you will understand. |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by odedele: 8:55am On Jun 16, 2011 |
The CBN mistakenly read the situation as a financial crisis basically, which was caused by corrupt and egregious bankers. So it resolved on a three point approach; declare those banks distressed and remove their executive management, inject large sums of money in order to stabilize their operations and forestall a panic response by customers and possible collapse. Finally, the banks would be recapitalized. On the surface, the programme appeared practical and credible. But analyzing it carefully, revealed inherent contradictions and limitations which challenge their viability and even question their legality. From the time he announced the sacking of the executive management teams of the banks and injected money into them, it would appear as if the CBN had made up its mind to acquire the banks. As far as the CBN was concerned, its attitude was more like; since the shares of the banks had been eroded, they now belonged to the Nigerian people and no longer to the shareholders. So in managing the banks, the rescue team looked up to the CBN for instructions and not the boards of directors Sanusi,certainly is out 2 destroy d so called rescued banks. |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by Pukkah: 9:38am On Jun 16, 2011 |
MAYOWAAK: Undoubtedly, some critical issues have been raised that deserve to be investigated by a neutral body. We should not sacrifice the health of our financial system on the altar of CBN autonomy. |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by hallmark77: 11:14am On Jun 16, 2011 |
The point is how can we get President Jonathan attention to this issue.I have all my savings in couple of those banks and I wont be happy if this Sanusi continue to create fear in my mind and since I am living abroad it will be difficult for me to run to the bank and withdrawl my deposits. |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by Agbo2(m): 1:14pm On Jun 16, 2011 |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by freezy(m): 2:39pm On Jun 16, 2011 |
You want to make a mess of a bad situation, put an aboki in charge! |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by smoothedge: 2:49pm On Jun 16, 2011 |
Haba mallam, aboki are correct people o! |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by initiate: 3:00pm On Jun 16, 2011 |
Sanusi is a backward and retrogressive individual. He is pained that the northerners do not have the wherewithal to exploit the benefits of capitalism. rather their own route to success is government patronage, nepotism. thus his agenda is to slow down the growth of southerners through all these shallow, inane policies. He or any of his ilk can never match the pedigree of the people he is victimising. he is just full of exuberance and a lot of hot air. we need a governor who can use the cbn as a vehicle for wealth creation, stability etc and we hope jonathan will remove him before he turns the whole country into a nation of almajris or boko haram |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by MMM2(m): 3:02pm On Jun 16, 2011 |
is sansui doing drugs. |
Re: Sanusi's Goof! Union Bank Was Never Insolvent! by comprende: 4:09pm On Jun 16, 2011 |
The Newswatch report Mission Unaccomplished Written by Maureen Chigbo Monday, 13 June 2011 The bail-out package which Sanusi Lamido Sanusi, governor of the Central Bank of Nigeria, arranged in 2009, to rescue some sick banks in the country has failed to achieve the set objectives Almost two years since Sanusi Lamido Sanusi, the governor of Central Bank of Nigeria, CBN, swept five bank managing directors out of office, all is still not well with the rescued banks. From the look of things, it appears that the CBN governor is not very sure of what to do with the banks, given the frequent reversal of policy statements it has made on the well-being of the banks. The apex bank had espoused a policy of outright sale of the banks to foreign banks; then merger and acquisition and now liquidation as a last resort. Sanusi had said at the World Economic Forum in Cape Town, South Africa, that all the banks bailed out almost two years ago, would find new investors, and that four of them had already agreed in principle on merger. The scenario Sanusi painted at that time was that four of the affected banks were certainly on their way to mergers while two have suitors but they couldn’t agree on commercial terms. Intercontinental Bank, he said, would merge with a healthy local peer, Access Bank, while Union Bank announced a $750 million deal with a consortium led by the African Capital Alliance, a private equity firm. Afribank was also said to have signed a recapitalisation agreement with a private equity group, Vine Capital, a consortium of local and international firms. The First City Monument Bank, FCMB, signed an agreement with Finbank, although the deal then was not yet formally announced. The two banks which could not reach a deal are Oceanic Bank and Bank PHB. First Bank of Nigeria, one of the biggest banks in the country by assets, had been seen as a potential buyer of Oceanic Bank but the management of the bank last month said the deal had collapsed. Bank PHB was the product of a merger between Platinum Bank and Habib Bank, one of Pakistan’s biggest lenders, and banking sources said Habib had held talks about increasing its shareholding. When the mergers and acquisitions didn’t happen soon enough, Sanusi went on to say that some of the rescued banks recorded milestones in their merger and acquisition procedures while some are still very far away in consummating the processes that could lead to their capitalisation. He, however, added that the CBN could just not allow the process to be open-ended. “By September 30, it will be over two years since we intervened in these banks. And the CBN has allowed the shareholders and directors of these banks to pursue their recapitalisations by looking for their own partners. But some of these directors and shareholders are not co-operating. We introduced Assets Management Compnay of Nigeria, AMCON, to inject capital to these banks but some of these directors are averse to this. Now, what is left for them is to either write a cheque for us or allow AMCON to inject liquidity.” CBN had warned last year October that the shareholders of the troubled banks should recapitalise them or be ready to face liquidation in line with laid down regulations. The apex bank reinforced this position a fortnight ago with its latest statement on the banks giving their shareholders October 30, to recapitalise or face liquidation. All these policies churned out to make the banks better have failed to produce the expected magic because of the series of litigations they attracted from shareholders. Some of the sacked managing directors of the rescued banks including Intercontinental Bank, Oceanic Bank, Union Bank, Finbank, and Afribank and their shareholders sued the apex bank over its action. Of all the cases, only that of Oceanic Bank has been successfully settled, with the court convicting Cecelia Ibru, former managing director of the bank, while the others are still lingering. Early in June this year, a court ruled against the sale of Intercontinental Bank to Access bank. The ruling came just a day after the CBN gave the rescued banks October 30, deadline to recapitalise or have their licences revoked and, thereafter, be handed over to the Nigeria Deposit Insurance Corporation for liquidation. Sequel to this, banks reportedly scurried abroad to raise money to recapitalise. The outcome of the banks move is yet unknown, but what is obvious, however, is the stand of the CBN, which is that it would withdraw its inter-bank guarantees for the rescued banks. That would pull the planks from their feet. Supposing the banks fail to recapitalise, can Sanusi actually afford to liquidate eight banks which constitute 33 and a half percent of the banking industry? If the answer is yes, the adverse effect of this decision on the economy cannot be imagined. For one thing, such a step will cause a lull in an economy that is already in coma due to epileptic power supply among other things. Liquidating the banks means that unemployment will skyrocket and the tendency is that many jobless youths will take to crimes thereby worsening the already bad security situation in the country. What the CBN must consider before liquidation is what happened to Savanah Bank and Societe General Bank which the court reinstated after it was liquidated. As a banker who wishes anonymity said: “Liquidation is not a path that will benefit anybody least of all the economy.” Nonetheless, one thing that is clear from Sanusi’s actions, is that the rescued banks have not repaid the money they were given to safeguard depositors funds. Contrary to the claims of the rescued banks that they have started to record profits, some of them are actually running at a loss due largely to the ineffectiveness on the part of their management. The ineffectiveness is as a result of endless misunderstanding between the new managing directors of the banks namely Mahmud Lai Alabi of Intercontinental Bank, John Aboh of Oceanic Bank, Funke Osibodu, of Union Bank, Suzzanne Iroche of Finbank, and Nebolisa Arah of Afribank and their staff. Although the tenure of these managing director will expire soon, all of them have, at one time or the other, had issues bordering on corruption and management style among others with their staff. For instance, some members of staff have accused the new management of over-indulgence, corruption as well as poor corporate governance which contributed to the downfall of the sacked bank managing directors. Those affected were Erastus Akingbola, Intercontinental Bank Plc; Cecilia Ibru of Oceanic; Bartholomew Ebong, Union Bank; Okey Nwosu, Finbank PLC and Sebastine Adigwe, Afribank. Although the management of those banks have equally denied all the allegations of wrong doings some emerging facts from the banks have shown that even their successors are also guilty of the same sins. For instance, Afribank, has had a running battle with its staff, who complained of a lot of malfeasance on the part of the management. Right now, a whistleblower from the bank has petitioned the EFCC against the actions of some executive directors which are undermining the wellbeing of Afribank. The first petition, which was addressed to Farida Waziri, the chairman of the EFCC, is dated March 27, 2011. It was received and stamped April 11, 2011, by the office of Farida Waziri, the EFCC chairman. The petition alleged that the executive directors were involved in a N1.2 billion scam barely two years after they assumed office. Also, an addendum to the first petition dated April 17, 2011, and signed by the whistleblower, described how the scam in Afribank is perpetrated. According to the petition, “Christopher Anammah, executive director, institutional banking, instructs the group financial controller at regular intervals to make funds transfer to a designated branch Inter-Branch Account ostensibly with the tacit approval of the group managing director. When the money is transferred into the destined branch, Nimat Munir, a courier, who is an Afribank staff in Wealth Management Department based in Abuja, is instructed by the executive director to encash the monies and deliver same to the executive director at his hotel room in Abuja.” The petitioner said that prior to this, the executive director would have travelled to Abuja to await and collect the cash. “The lady is said to be a mere courier who was acting out instructions issued to her and completely innocent of the scam. Oftentimes, these monies are wired through Afribank Burean De Change, where the monies are converted to Dollars,” the petition said. “Your investigations should reveal how they have perpetrated these without infringing on the relevant Central Bank of Nigeria, Forex/Bureau De Change regulations. Whatever happened to these monies afterwards, your guess is as good as mine and I am convinced your investigation should reveal. “From every indication, my initial petition in which the amount salted away by these supposed “change executives” was estimated at N1.2 billion may be a child’s play after all, as my facts are limited to only two of the branches listed above, through which these nefarious activities have been perpetrated over the months.” The petition doubted that all the fraud could have been perpetrated without the group managing director’s approval. “It remains to be seen. But I have my doubts that the fraud could have been possible. Could the executive director, institutional banking, and the group managing director have been working in league towards the same end? I strongly suspect so, considering that the executive director, Mr. Nnamdi Christopher Anammah, is not just a long time acquaintance of Mr. Nebolisa Arah but, indeed, his nephew.” According to the petition, Anammah is the son of Nebolisa’s female relative and he sponsored his education. “Is there something about the executive director’s pedigree that could have sign-posted the danger he posed to Afribank? Yes, indeed! Nnamdi Anammah is known to owe Intercontinental Bank over N1 billion in loans he obtained to reposition his stock broking firm before the capital market went burst. This, ab-initio, is indeed a pre-disposing factor to fraudulent misdemeanour,” it said. The petition was copied to chairman, Independent Corrupt Practices and other related offences Commssion, ICPC, the inspector general of police, chairman, Senate Committee on Anti-corruption, chairman, House Committee on Anti- Corruption, director-general, State Security Service, and head of operations, Lagos, EFCC. Apart from the petition, other bank documents available to Newswatch showed that in one month in December, Afribank spent N200 million to woo state governments to deposit funds in the bank. Cumulatively, the total from 2009, when the executive directors took over the bank, stands at N1.2 billion. Ironically, public sector deposits coming into the bank did not, in any way, justify the huge amount paid out. As at April this year, the financial condition of Afribank worsened when it lost N1 billion from January to April. In 2010, the bank made a loss of N4 billion. Newswatch learnt that in 2009, when the new management took over, 70 to 80 branches were making profit compared to now when only 35 branches are profitable. Newswatch learnt that the CBN gave Arah, a free hand to pick his executive directors and that two of those he picked are members of his Baptist Church in Ikoyi. They are Joke Coker, and Stephen Adeji, both executive directors in charge of Corporate, Commercial and Retail Operations, and IT Human Capital procurement, respectively. Isaac Alofoje is in charge of Risk Management and Strategy while Christopher Anammah is in charge of institutional banking. Alofoje is an ex-colleague of Arah at the defunct International Merchant Bank. “The fact that the CBN allowed the managing director to pick his exco which is a crony arrangement, is bound to produce negative repercussions for effective corporate governance. Ever since they came, a number of the projects undertaken to turn around the bank, have not been faithfully implemented, and the management does not have the capacity to take effective decision that will bring about the desired impact,” a staff of the bank who wishes anonymity said. According to the official, the management “implements decisions taken hapharzardly. May be, it has to do with the fact that almost all the executive directors are mostly retirees.” Other sources close to Afribank told Newswatch that the EFCC is already investigating the Afribank scam and has interrogated some of its executive directors. When Newswatch contacted the EFCC to know how far the Commission has gone with its investigation, Femi Babafemi, the Commission’s spokesman, said he had sent information out and was still waiting for the officers who would be in charge of the case to brief him. Also, Newswatch called all the executive directors of Afribank on the phone to get their reactions on the allegations. Their phones rang but nobody picked except that of Isaac Alofoje whose phone was answered. When Newswatch told him what it was investigating, the voice curiously said he was not Alofoje and that he was out and immediately cut the line. Later in the night, the corporate affairs officer of Afribank called to enquire why Newswatch called his boss. After being told the purpose, he failed to react to the allegations. Instead, Afribank enlisted the services of public relations consultant and other emissaries to mount pressure on Newswatch to kill the story. However, Mohammed Abdulahi, head, CBN Corporate Affairs Department, said that the CBN did not approve any new board member for Africbank except the chairman after the removal of Osunde. Concerning the money the CBN gave Afribank and other banks in 2009, he pointed out that “AMCON has already started buying the non- performing loans of the banks, thereby providing liquidity. AMCON is expected to assist in the recapitalisation of the banks and as soon as the banks are recapitalised and adequately stabilised, they would be in a position to return the money the CBN injected to stabilise them. Reported by Dike Onwuamaeze and Ishaya Ibrahim |
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