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More Banks Have 'Large Volumes Of Non-Performing Loans' - Business - Nairaland

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More Banks Have 'Large Volumes Of Non-Performing Loans' by Pappyshoes(m): 9:06am On Sep 09, 2009
Confusion over release of audit report of 14 banks
The release of the audited report of the remaining 14 banks is now an issue of controversy within the rank of top management of  Central Bank of Nigeria (CBN. While some move for a similar treatment with the first five bank chief executives, others kick against it.   

But Daily Sun’s source revealed that the CBN Governor, Mallam Sanusi Lamido Sanusi,  is now cautious of his actions following the uproar that greeted his sacking of the five bank chief executives and the injection of N420 billion into the ailing banks.

According to the source, although the remaining 14 banks are not terminally ill like the first five, large volumes of non-performing loans were discovered.

The 14 banks whose audited accounts are now awaiting publication include,   Skye Bank, PHB, Ecobank, Zenith Bank, First City Merchant Bank (FCMB), Fidelity Bank, IBTC, Unity Bank, Citi Bank, Standard Chartered Bank, Spring Bank, Access Bank, Wema Bank and Equatorial Trust Bank.

Sanusi had, at the last 210 Monetary Policy Committee (MPC) meeting  two weeks ago announced that the auditing of 11 banks had been concluded. But last week, Daily Sun’s  source revealed  that the auditing of the remaining  two banks had been done, wondering why the delay in publishing the names of the banks with large volumes of non-performing loans.

The hurried sacking of the chief executives of five banks and the injection of N420 billion in the economy  attracted some bashings from stakeholders in the industry who suggested that the powers of the apex bank be whittled down.

But CBN had argued that any move to amend the CBN Act would  prevent the CBN from playing its role as lender of last resort.

Besides, he said not only would it be counter-productive, it will also be  unprecedented in the history of central banking in the world as this would simply make it difficult for the Central Bank of Nigeria to perform its vital role of ensuring the safety and soundness of the financial system.   

The CBN Act empowers the CBN to manage money supply in the economy through different mechanisms.  The CBN, as banker to other banks, has been increasing money supply by lending money to the banks through the Expanded Discount Window (EDW) and the injection of the N420b into the five banks is similar to that function.

The money is not from the government treasury and the CBN does not require any appropriation by the National Assembly in order to perform this function which in any event, is not often foreseeable,” CBN insisted.

http://www.sunnewsonline.com/webpages/news/national/2009/sept/09/national-09-09-2009-001.htm
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by FBS: 9:08am On Sep 09, 2009
Oh Dear!
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by Seun(m): 10:43am On Sep 09, 2009
According to the source,
although the remaining 14 banks are not terminally ill like the first five,
large volumes of non-performing loans were discovered.
As far as I am concerned, all the CEOs giving huge bad loans should be treated the same way.
Either we arrest all of them, or we release all of them. Selective prosecution isn't right.

Otherwise it means Ibru et all are being punished because their banks needed to be bailed out
by the CBN. In other words, failure. The problem with that is that failure is not a criminal offence.
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by Ibime(m): 11:07am On Sep 09, 2009
They better release the finding of the audits quick cos banks will simply refuse to lend to each other until they know the financial situation of the counterparty.
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by utotomixxx(m): 11:20am On Sep 09, 2009
GET THEM!!! GET THEM!!!
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by PapaBrowne(m): 11:27am On Sep 09, 2009
When Sanusi's Charade is over, people will begin to ask why he did what he did in the first place.
People will realise all of a sudden that he had only five targets as exposed by the Vanguard report of March 23rd.
He has found himself in a huge dilemma.

If he sacks more MD's, the uproar will be sustained and it will further dissipate the economy. Plus he would have to inject more capital which he knows would only spell disaster.

If he doesn't sack the MD'S everyone will know that his intentions in the first place were to target the 5 banks and destroy them for his own selfish agenda.

If he chooses not to annouce the results, he will loose the minute credibility he has left. Asides, as Ibime said, there will be no trust between banks and they would stop interbank lending and I'm sure we all know the consequences.

Looking at it from any angle, It spells doom for the economy. One man, in a space of barely 3 months has single handedly destroyed an economy that even though it had its demerits, was budding and becoming attractive to foreign investments.
That is failure and if as Seun has said, failure is assumed to be criminal, then Sanusi should be on his way to Kirikiri anytime soon.
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by Oluschenco(m): 11:30am On Sep 09, 2009
utotomixxx:

GET THEM!!! GET THEM!!!

Either you get them or not, is my coins save with S, & W, Bank
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by rosepearl(f): 11:34am On Sep 09, 2009
Every bank is guilty of bad loans this is no news, AIG, Northern Rock and others were bailed by their various governments yet no executives were sacked and arrested, GM was given a huge bail out by the american govt and some weeks later gave out bonuses to their executives and i didnt see any body being arrested for that its only in Nigeria that making bad managerial decisions becomes a criminal offence. Sanusi has started with his victimization of execs let him finish it by naming the remaining banks and sacking their execs also
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by Ibime(m): 11:48am On Sep 09, 2009
I urge Sanusi to press on with applying the same rule of law to all execs as he did to the first 5.

Media uproar and the injection of tribalism into the debate should not stop him now.

PapaBrowne:

If he sacks more MD's, the uproar will be sustained and it will further dissipate the economy. Plus he would have to inject more capital which he knows would only spell disaster.

If he doesn't sack the MD'S everyone will know that his intentions in the first place were to target the 5 banks and destroy them for his own selfish agenda.

If he chooses not to annouce the results, he will loose the minute credibility he has left.

Is it not because of reactions of people like yourself that led to the catch-22 you so aptly described in the quoted post above?


PapaBrowne:

That is failure and if as Seun has said, failure is assumed to be criminal, then Sanusi should be on his way to Kirikiri anytime soon.

This statement lacks logic. Is Sanusi responsible for bringing criminal investigations or is that EFCC's remit? Seun's post applies only to EFCC and not CBN. Sanusi's remit ends with sacking malperforming execs and handing his findings over to the relevant authorities.

Sanusi should press on with clearing out all deadwood from the banking sector. Some who call for change would be the first to cry tribalism when change is manifested.
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by FBS: 12:14pm On Sep 09, 2009
There should be no basis for double standards. Lets see how far he (Sanusi) will go on this report.
Why the delay sef in publishing the report?
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by oluajana(m): 12:24pm On Sep 09, 2009
If others are guilty of the same offences, then they must bear the same consequences. If not, Sanusi will need to convince me that the sack of 5 CEO is not a vendetta.
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by Fhemmmy: 3:16pm On Sep 09, 2009
I hope sanusi is not having a cold feet oh.
he needs to get them all and deal with them all like they have done to others.
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by ilohim: 4:26pm On Sep 09, 2009
If the truth be told, the 'selected cleansing' of the banking sector was targeted at the five banks whose CEOS have been axed.

If not why would the CBN governor who feels he can do anything develop cold feet now? Having come this far in tarnishing the image & personalities of the CEOs of the first five banks,it would be totally wrong,unfair & devoid of justice to say the exact position of the remaining banks should not be shown to the whole world.
The CBN governor never followed the rule of law in the way & manner he went about this cleansing, why stop now?

I feel its too late for him to stop now; he should go the whole hog,besides these five CEOs remain incarcerated for allegations that have remained unproven against them, what injustice!
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by canuck(m): 5:49pm On Sep 09, 2009
ilohim:

If the truth be told, the 'selected cleansing' of the banking sector was targeted at the five banks whose CEOS have been axed.

Bang on! I think so too. Such a radical move should result in a system overhaul, not in spaced out doses.
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by SKYQUEST(m): 9:45pm On Sep 09, 2009
sanusi has plunged himself into this dilemma because he did the right thing in the completely wrong way. basic law of mathematics says positive against negative will give you a negative result. trust me, holistically i foresee more complication for both the CBN, EFCC and the Nigeria economy arising from the way the whole thing is been handled. Agenda or no agenda, i beleive the CBN governor took off an wholesome journey on a completely wrong foot. By the way, which sane investor will buy into an organisation where his continual ownership is not guarantee, just like it is not sure for the current owners of the five banks in question. this is just a food for thought.
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by DisGuy: 12:24pm On Sep 10, 2009
rosepearl:

Every bank is guilty of bad loans this is no news, AIG, Northern Rock and others were bailed by their various governments yet no executives were sacked and arrested, GM was given a huge bail out by the american govt and some weeks later gave out bonuses to their executives and i didnt see any body being arrested for that its only in Nigeria that making bad managerial decisions becomes a criminal offence. Sanusi has started with his victimization of execs let him finish it by naming the remaining banks and sacking their execs also


thats because those guys didnt lend depositors money to their nannies, friends and their friends company
and they didnt lend money to people who are well known as chronic debtors with other banks, those MD lent money to the general public and didnt exceed stipulated amounts for individuals!

theres a big difference between bad managerial decision and criminal decisions, what stops the banks from
lending as a group to individual ,what stops them from refusing politician and government officials loan
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by candylips(m): 12:30pm On Sep 10, 2009
this is serious o
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by wales7479(m): 1:01pm On Sep 10, 2009
Very soon the hunter will be hunted. I foresee a total collapse in the whole process. CBN, EFCC and Banks. Maybe Sanusi should make CBN a commercial bank and manage it for 1year and lets see the outcome if there won't be BAD LOANS / NON-PERFORMING LOANS.

This would make a good movie and I wonder how the whole script would end. Sanusi please let us have the name of the Writer and Editor,
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by DisGuy: 1:12pm On Sep 10, 2009
wales7479:

Very soon the hunter will be hunted. I foresee a total collapse in the whole process. CBN, EFCC and Banks. Maybe Sanusi should make CBN a commercial bank and manage it for 1year and lets see the outcome if there won't be BAD LOANS / NON-PERFORMING LOANS.

This would make a good movie and I wonder how the whole script would end. Sanusi please let us have the name of the Writer and Editor,


millions thought that same during the recapitalisation some years back

there will be bad loans but not at this scale and certainly not to chronice debtors
i mean who in the world borrow over 25% of their depositors money to play the stock market short term
(add speculators in the real estate and oil marketers)
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by sheriffman(m): 8:11pm On Sep 10, 2009
Sanusi!Sanusi!!Sanusi!!!
When are we going to hear the last about this man,it sure looks like he's the most hated /talked about Govt. Appointee @ the moment
but come to think of it,whether you call it developing cold feet,being cautious with the economy,tribalistic or whatever,one thing was sure from the very beginning of this and that is Sanusi could not and will never be able to sustain the tempo he begun with the sack of the bank execs.Some have said from the beginning that there was an ulterior motive behind his earlier moves and alot of us shouted them down.Since I read that Vanguard's piece about the plot I believed it. SANUSI CANNOT AND WILL NOT SACK ANY BANK EXECS AGAIN.He has dealt with his perceived enemies or maybe I should say his richer colleagues in the business.
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by felofelo: 3:15pm On Sep 13, 2009
As far as am concerned, there is no bank in Nigeria that is not guilty of giving out bad laon. I know one day the truth will come out. Believe it or not, these 5 banks are just being embarrased for political reasons. May God help us in this country
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by Nezan(m): 3:20pm On Sep 14, 2009
May God help us.
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by yommys01(m): 6:14pm On Sep 15, 2009
why the preferrial treatment? The first five banks were rightly disgraced and I expect them to do the same to the others and who the f*ck says First bank is free?

Sanusi needs to tell us exactly why First bank had to write of 26b when he was the CEO.
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by manny4life(m): 5:28am On Sep 16, 2009
When did the CBN governor reserve the right to sack 5 bank CEO's? Now that's some problem right there.
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by candylips(m): 9:14am On Sep 16, 2009
so whats the latest on this issue
Re: More Banks Have 'Large Volumes Of Non-Performing Loans' by NaijaPress: 1:14pm On Sep 11, 2019
Non-performing loans cannot be avoided, but it can be managed https://www.nigeriabusinessplan.com.ng/non-performing-loans-hinders-dividend-payment/

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