death penalty for shareholders and bank heads?

I think we are going overboard here

Sanusi might be right. Shareholders might have lost their money. I think Sanusi should just publish the financial position of these troubled banks so that we see how much provision has been made for bad debt and how much shareholders' funds has been eroded by loan losses. We'll be able to know how much of those banks are still owned by current shareholders and how much is owned by CBN/Government.

Sanusi is pretty confusing! One moment he is saying CBN loan has not been converted to equity and Government has not taken ownership stake in the banks, another moment he is saying something else. One moment he is saying the troubled banks should be acquired by healthy ones, another time he is saying the opposite. Sanusi should stop the policy somersaults. Sanusi should think through his words before uttering them. His words are policy by virtue of his positon as the CBN Governor. He should come clean and just publish the policy position CBN is adopting with regards to credit risk management. He should also state the financial standard CBN will want the banks to use so that we'll all know what constitute a non-performing loan.

such comment about shooting somebody dead suggests that he (SLS) has done it before and is still capable of doing it either directly or indirectly. Its only a matter of time, nigerians will see the selfish agenda of mr cbn governor.
I rest my case.

Here's my earlier take posted on this Forum, i stand by it -


There are two cardinal aspects of this mess that the CBN Governor got disastrously wrong. You see, when laws, regulations and procedures are laid down, the purpose is to avert anarchy. If we continue to act with disregard for regulations, we will continue to be a disjointed and directionless society. That forms the plank for the emergence of a failed state.

The two critical bits that Sanusi got wrong: Regulatory Discretion & Procedure and Approprition of Public Funds.

If you are familiar with the Fundamentals of Regulatory Oversight in any industry, you will be aware that the cardinal function of the Regulator is to guarantee a healthy industry and in so doing, the Regulator has various tools of intervention. The tools are to be excercised progressively in such a manner that correction of anomalies is effected with minimal disruption to the system. The ultimate sanctions are only reserved for irreversible situations and even at that ONLY after the application of intermediary measures which have failed.

There are two cardinal aspects of this mess that the CBN Governor got disastrously wrong. You see, when laws, regulations and procedures are laid down, the purpose is to avert anarchy. If we continue to act with disregard for regulations, we will continue to be a disjointed and directionless society. That forms the plank for the emergence of a failed state.

The two critical bits that Sanusi got wrong: Regulatory Discretion & Procedure and Approprition of Public Funds.

If you are familiar with the Fundamentals of Regulatory Oversight in any industry, you will be aware that the cardinal function of the Regulator is to guarantee a healthy industry and in so doing, the Regulator has various tools of intervention. The tools are to be excercised progressively in such a manner that correction of anomalies is effected with minimal disruption to the system. The ultimate sanctions are only reserved for irreversible situations and even at that ONLY after the application of intermediary measures which have failed.

Sanusi did not apply any intermediary measures whatsoever before wielding the big stick and he failed to note the likely ripple effects of loss of local and international confidence and run on deposits that attend such public shows of regulatory might.

It is therefore clear that as a Regulator he acted hastily, and without discretion, which is scandalous considering that this is a post he has held for less than two months. Clear measures availed him in taking gradual steps to correct the anomalies.

Furthermore a Regulator must be impartial - and in this he has manifestly failed by implicitly giving the other banks more time to tidy up their books while dragging the first lot into the mud.

The Second major point is Appropriation of Public funds.

Under the Constitution of Nigeria ALL FUNDS - HOWEVER SOURCED, PRODUCED OR DERIVED, accrue FIRST, AND AUTOMATICALLY TO THE CONSOLIDATED FEDERATION ACCOUNT, AND NO FUNDS MAY BE WITHDRWAN THEREFROM WITHOUT APPROPRIATION FOR SUCH PURPOSE BY THE PARLIAMENT (NATIONAL ASSEMBLY).

Accordingly, once monies are printed (which is at all events a questionable approach to creating wealth) such monies accrue first to the Federation Account and must be appropriated before being touched at all.

Sanusi made two infantile arguments in his attempt to evade this. He stated that it was not an expenditure but a loan. This is irrelevant because the Constitution does not make a distinction. It states that ALL monies must be appropriated before being withdrawn. Thus it does not matter what you are withdrawing the money for: it must be appropriated before being withdrawn. Secondly he stated that the money was not from the Federation Account. What a laugh - the law states that ALL monies should go to that account!

His action sets a very dangerous precedent: In future the CBN Governor may print trillions of naira and disburse as he pleases since in his argument, its a loan. So perhaps he can print 100 trillion naira and give out as loans without the proper process of legislative approval? Also, if the other banks he is still auditing are found to need help, what will he do? Go back to his back yard and print more billions?

Aside from the illegality pointed out above, as an economist he should be aware that such reckless printing of monies is a key cause of inflationary trends within the economy.

Recall that both the US and UK effected similar bail-outs last year at the height of the recession. It may interest you to know that in both societies the actions were carried out by the Central Banks through Acts of Parliament.

We cannot carry on with our scattered, gra-gra approach to doing things just any how in this country.

Crap

@ chuckvyl :

You are muddling the issue and trvializing the seriousness of the crime committed by the CEO and the billionare loan defaulters.  You are the one that needs to use your brain for a second.  Is it the North that cause these CEOs to give loan without collateral or just give loans outrightly to themselves with a clear intention of not paying the money back?.  What does a tribe have to do with this.  They fail to follow their own policy and business practices and yet you are tribalizing and trivializing the import of thier crim.  It is the thought process of people like you that got the banking and Nigeria in a situation that they are today.  Bankers now are the worst looters of mony - bank depositors money.

For the avoidance of doubt or confusion, if the CEOs of the Banks that were bailed out in the USA gave out loans without a collateral or loans to themselves, they will end up in Jail - upward of 20-years.  Please do not be ignorant for ignorance is a disease for which there is no cure other than knowledge, hence intentionally seek knowledge to cure yourself.

@Timmy
You make me laugh.Listen.Do you know that there is something called court of law?I hope you know.I am not saying that giving out loans without collateral is acceptable.But the CBN has to prove it in the court of law.That is the way it is done.The courts have to find them guilty and culpable first before you start saying what you do not know.Why rush to take the bank from the shareholders when the case is still been challenged in the courts.That is called theft.It doesn't make any sense.
If you do not believe in the politics of tribe as it is obtained in Nigeria then i guess you must be 13 or 14 years old.Tribalism drives Nigeria's politics and you better accept that.
So bankers are looters but the likes of Ibori and Lucky igbinideion are not right?
Why is it taking donkey years to convict Ibori and all the known PDP looters in politics?
But in a matter of days those banks CEOs were arrested and charged to court and there investments taking away from them and you people are busy shouting 'thief,thief' when you know nothing about Nigerian politics.
Keep dreaming my brother.
But you did not make any comment about shareholders losing there money.The CBN governoor has no power to take banks from there owners.There are laid down procedures to folllow.The government is just stealing what belongs to you and me and are about to give it out to whom they wish and you fail to read in between the lines.
Maybe in all ur knowledge you do not know the laws of bankruptcy.How can the same man that said 2 months ago that the loans were Tier 2 capital and that the banks are not being essentially nationalised turn back to say the opposite and you guys are keeping quiet?How can you be so daft my brother?

Deep Sight:

Here's my earlier take posted on this Forum, i stand by it -


There are two cardinal aspects of this mess that the CBN Governor got disastrously wrong. You see, when laws, regulations and procedures are laid down, the purpose is to avert anarchy. If we continue to act with disregard for regulations, we will continue to be a disjointed and directionless society. That forms the plank for the emergence of a failed state.

The two critical bits that Sanusi got wrong: Regulatory Discretion & Procedure and Approprition of Public Funds.

If you are familiar with the Fundamentals of Regulatory Oversight in any industry, you will be aware that the cardinal function of the Regulator is to guarantee a healthy industry and in so doing, the Regulator has various tools of intervention. The tools are to be excercised progressively in such a manner that correction of anomalies is effected with minimal disruption to the system. The ultimate sanctions are only reserved for irreversible situations and even at that ONLY after the application of intermediary measures which have failed.

There are two cardinal aspects of this mess that the CBN Governor got disastrously wrong. You see, when laws, regulations and procedures are laid down, the purpose is to avert anarchy. If we continue to act with disregard for regulations, we will continue to be a disjointed and directionless society. That forms the plank for the emergence of a failed state.

The two critical bits that Sanusi got wrong: Regulatory Discretion & Procedure and Approprition of Public Funds.

If you are familiar with the Fundamentals of Regulatory Oversight in any industry, you will be aware that the cardinal function of the Regulator is to guarantee a healthy industry and in so doing, the Regulator has various tools of intervention. The tools are to be excercised progressively in such a manner that correction of anomalies is effected with minimal disruption to the system. The ultimate sanctions are only reserved for irreversible situations and even at that ONLY after the application of intermediary measures which have failed.

[b]Sanusi did not apply any intermediary measures whatsoever before wielding the big stick and he failed to note the likely ripple effects of loss of local and international confidence and run on deposits that attend such public shows of regulatory might.

It is therefore clear that as a Regulator he acted hastily, and without discretion, which is scandalous considering that this is a post he has held for less than two months. Clear measures availed him in taking gradual steps to correct the anomalies.

Furthermore a Regulator must be impartial - and in this he has manifestly failed by implicitly giving the other banks more time to tidy up their books while dragging the first lot into the mud.

The Second major point is Appropriation of Public funds.

Under the Constitution of Nigeria ALL FUNDS - HOWEVER SOURCED, PRODUCED OR DERIVED, accrue FIRST, AND AUTOMATICALLY TO THE CONSOLIDATED FEDERATION ACCOUNT, AND NO FUNDS MAY BE WITHDRWAN THEREFROM WITHOUT APPROPRIATION FOR SUCH PURPOSE BY THE PARLIAMENT (NATIONAL ASSEMBLY). [/b]

Accordingly, once monies are printed (which is at all events a questionable approach to creating wealth) such monies accrue first to the Federation Account and must be appropriated before being touched at all.

Sanusi made two infantile arguments in his attempt to evade this. He stated that it was not an expenditure but a loan. This is irrelevant because the Constitution does not make a distinction. It states that ALL monies must be appropriated before being withdrawn. Thus it does not matter what you are withdrawing the money for: it must be appropriated before being withdrawn. Secondly he stated that the money was not from the Federation Account. What a laugh - the law states that ALL monies should go to that account!

His action sets a very dangerous precedent: In future the CBN Governor may print trillions of naira and disburse as he pleases since in his argument, its a loan. So perhaps he can print 100 trillion naira and give out as loans without the proper process of legislative approval? Also, if the other banks he is still auditing are found to need help, what will he do? Go back to his back yard and print more billions?

Aside from the illegality pointed out above, as an economist he should be aware that such reckless printing of monies is a key cause of inflationary trends within the economy.

Recall that both the US and UK effected similar bail-outs last year at the height of the recession. It may interest you to know that in both societies the actions were carried out by the Central Banks through Acts of Parliament.

We cannot carry on with our scattered, gra-gra approach to doing things just any how in this country.

I have to agree!

@Chuckvyl
Quote
Those banks never filed for bankruptcy and everything happening today have been orchestrated by the North.Believe it or not.Just use your mind.

You are right everything happening today even including the fact that Atiku a notherner is involved. Sorry I will use my brains no matter how insignificant they are not my mind.

Quote
It is because people like you are in that country that those people in power can do whatever they do and get away with it.Can you use your brain for just one minute?Just one minute use that brain in your head and ask questions about finance and get answers.Those banks never filed for bankruptcy


Are you serious? some of these banks were massaging their books and some Newspapers were just awarding this or that Award. Please if I am sinking and you saw me would you wait still I write a on a paper signed that I was sinking?

Yes I am using my brain sir but you are smarter than me sir.

As for the money I put there even if it is one naira I deserve to have it back. Imaigine if one million account holders loose just 500,000.

Sorry dear.
What brings Atiku into this matter.Has he done any wrong in borrowing money.In your narrow thinking all people that borrow billions must be looters.Right?
Did Atiku take his loan without collateral?Have you and your CBN governor proven that?
So what crime has Atiku commited in regards to the banks mentioned.It is not a criminal offence if your loan is performing.Get that into your head please.There are laid down rules to follow when a loan goes bad.It does not call for calling them criminals.You think they have commited a crime because you know little about finance i guess.

If you say that they cook there books.How have you proved that?
The CBN has refused to make public the report from the probe and you are there shouting that they have done wrong.
Get some sense into your head.Understand that there are courts and regulations to follow.Let CBN come clean and take them to court and prove that the books were cooked as you claim.Until they do that there is nothing different from this act to maybe Abacha forcefully taking these banks away from there owners.Rethink you make me laugh.Use your head.So you think that Nigeria does not play tribal politics?
Go and learn.I guess you are from Benin and Ghana.

Please I think this is more than meet the eyes.

Sanusi said to the national assembly that what he did was not a bailout and he has no plan to sell these banks. He said he did not need appropriation/ approval from national assembly because there is no law that says he need to do that before he lends money to bank. Simply put…that is his job.

Now, saying the shareholders have lost their funds in these banks means these banks now belong to CBN, which means CBN has bought over these banks. So what will happen next is that some people will now buy back these banks from CBN, and these people are likely to be Northerners…So those claiming he is acting a script may have a point because I am beginning to believe it too.

I hate to say "I told you so", but I'm still waiting for the blind Sanusi supporter of this World to say something about this issue now. Where are the jarus, Ibimes, and ndu_chucks of this World

First, it was the CEOs, now it's the shareholders. If Sanusi is not a criminal, why not let any acquiring bank buy the shares, assest, and liabilities of these banks? Why does he have to rob shareholders inorder to make the banks easier or cheaper for anybody(his fellow northerners) to buy?

We have all heard about At&T buying Cingular for $12billion, or about $10/share, why not do same in Nigeria and be honest for once He doesn't have to intefer with basic share prices as a way of reducing the value of these banks---- this where it become clear that he's either criminally minded, or just an economic fool.

Oh, by the way, the long term effect of this action is going to affect not just these banks, but all publicly quoted companies on the long run.
Who would want to go buy shares in Nigeria companies when you don't know the type of CBN governor that would be appointed tomorrow?

This whole banking fiasco has been long in the making, how can a bank or financial institution give out billions of naira in loans and not require any collateral from the debtors!!! I remember early last year I spoke to an uncle who was visiting from the UK and asked him what he though about the nigerian banks because he deals venture capital. He replied that a lot of the banks were in trouble and he especially made mention of oceanic bank saying that a vast sum of money had been given out to a particular individual as loan and it wasn't performing and it was just a matter of time before an implosion occurred in the nigerian banking sector.

achinu:

This whole banking fiasco has been long in the making, how can a bank or financial institution give out billions of naira in loans and not require any collateral from the debtors!!! I remember early last year I spoke to an uncle who was visiting from the UK and asked him what he though about the nigerian banks because he deals venture capital. He replied that a lot of the banks were in trouble and he especially made mention of oceanic bank saying that a vast sum of money had been given out to a particular individual as loan and it wasn't performing and it was just a matter of time before an implosion occurred in the nigerian banking sector.

These are the same lines used by Sanusi over and over again. If there's corruption in the banks, we can still clean up the industry without ruining the whole financial and investment future of Nigeria.
Most of these cases are currently before the courts, and are bound by court rules, yet Sanusi goes around and around town making statements designed to influence and support his case. He has already accused these people, let him give them their day in court. I don't think he should be the judge, jury, prosecutor, and excutioner all in one. Why don't reasonable Nigerians see beyond his antics

achinu:

This whole banking fiasco has been long in the making, how can a bank or financial institution give out billions of naira in loans and not require any collateral from the debtors!!!

That is, if you believe the story CBN is peddling. If you carefully read between the lines, you would have observed that most of those loan were secured loans whose collaterals had lost value thereby exposing the banks. Granted, a few of the loans (with substantial amounts) especially the ones to the CEO's fronts were not either secured or adequately secured.

I remember early last year I spoke to an uncle who was visiting from the UK and asked him what he though about the nigerian banks because he deals venture capital. He replied that a lot of the banks were in trouble and he especially made mention of oceanic bank saying that a vast sum of money had been given out to a particular individual as loan and it wasn't performing and it was just a matter of time before an implosion occurred in the nigerian banking sector.

Do you know what informed his opinion that the loans in Oceanic bank were not performing early last year? What was his basis of the statement? I'm curious to know the premise(s) of his conclusion.

i dont care if a northern or southern is there,my own is that sanusi is not be reasonable.the measures he used as penalty was 2hard,common give it 2them,these people made this banks wat dey re 2day!
sanusi should remember he was once 1 of them.he can't tell me honestly that he never did anything in first bank!!!!!
people should use their powers wisely

We are quick to talk about US banks receiving government bailout, but not quick to point out how many of those US bank CEO's gave out huge loans to themselves, families friends, or paid stockbrokers to fix their share prices on the stock market.

We are quick to forget things in this country. For too long, many families have been suffering from bank failures in Nigeria.
Previously, signs of an impending bank failure is that they start rationing money and imposing conditions on how much you can withdraw. Voila!, before you know it, they shut their doors and nothing will happen. Of recent memory was All States Trust Bank. What happened to the MD? Nada!, What happened to the shareholders? Nada! Did they file for bankruptcy as some people are mentioning on here? For where!

though these people jeopardized the industry we cannot ignore the fact that the banking industry is what it it today because of these new generation banks. they have created employment for several nigerians and they have spread their tentacles all over africa and even in the Uk- which other african banks have actually done all of these without partnering with foreign banks?

the executives should be punished for their wrong-doing but sanusi should not kill the banking industry along with them with all his gra-gra and insensitivity creating panic all over the country.

agreed,my point exactly

Rebarobyn:

though these people jeopardized the industry we cannot ignore the fact that the banking industry is what it it today because of these new generation banks. they have created employment for several nigerians and they have spread their tentacles all over africa and even in the Uk- which other african banks have actually done all of these without partnering with foreign banks?

the executives should be punished for their wrong-doing but sanusi should not kill the banking industry along with them with all his gra-gra and insensitivity creating panic all over the country.

naijaking1:

I hate to say "I told you so", but I'm still waiting for the blind Sanusi supporter of this World to say something about this issue now. Where are the jarus, Ibimes, and ndu_chucks of this World

First, it was the CEOs, now it's the shareholders. If Sanusi is not a criminal, why not let any acquiring bank buy the shares, assest, and liabilities of these banks? Why does he have to rob shareholders inorder to make the banks easier or cheaper for anybody(his fellow northerners) to buy?

We have all heard about At&T buying Cingular for $12billion, or about $10/share, why not do same in Nigeria and be honest for once He doesn't have to intefer with basic share prices as a way of reducing the value of these banks---- this where it become clear that he's either criminally minded, or just an economic fool.

Oh, by the way, the long term effect of this action is going to affect not just these banks, but all publicly quoted companies on the long run.
Who would want to go buy shares in Nigeria companies when you don't know the type of CBN governor that would be appointed tomorrow?

I agree wholeheartedly with you here. It would be difficult to make the equities market stable with this type of intervention. If government must interfere, they must do so in a manner that still gives confidence to investors. What is the point of buying shares for the long-term if policy can change in 4 years time and then you are di-vested of your shares? If government injects funds into these banks, then the government becomes a shareholder but not at the expense of existing shareholders. The share capital becomes diluted or the government acquires the shares of existing shareholders.

While I agree that corrupt bank chiefs should be brought to book, you must follow the rule of law. What is the point of sanitising the sector but destroying investor confidence. We always had a problem with foreigners investing in Nigeria but we always had Nigerians investing in the country; with this short-sighted moves, Nigerians will equally stop investing in their economy.

I ve always said it, Sanusi is obviously confused and unreliable,he can't be trusted,he keeps saying one thing and coming back to say another .I hope Sanusi's supporters are starting to see the real Sanusi and his real intentions and stupid antics.
Sanusi keeps telling lies to the public which is largely illeterate about NPL,Bad loans,colateral,lending and debt.when ppl make arguement about banks having NPLs,i always ask them of their definition of NPLs,in conclusion after their explanation one discovers the nonsense lies sanusi has been spewing on them.
Non Performing Loans are loans whose borrowers have defaulted to pay the principal or servicing interest(due to several reasons) as at when due which is usually a period of 90 days or 3months.However,our CBN governor keeps erronously clumping NPLs and bad loans together.Bad loans are loans whose borrowers can no longer meet their financial obligations or pay back the principal,every bank has some money earmarked in the event that some NPLs become bad loans,these are common banking business practices,ours is no different.It does't make any sense faulting every bank on the basis of NPLs and classifying every NPL as bad debt.Sanusi keeps talking like borrowing huge sum of money is a crime or that defaulting on payment as at when due is criminal or not part of the banking business.He claims that many of the CEO lent money without adequate colateral,well,let the court of law be the arbiter of what constitutes an 'adequate colateral' and not his gutz feelings and stupid outburst.
Sanusi may have been a risk manager for years but he obviously lacks the catholic experience of a CBN governor,he is too concentrated on one place that the rest suffer.
Also,events have shown that Sanusi is an unrelible person,he's always saying one thing and doing another thing,take for instance the issue of ownership of these banks,when he was accused of having an agenda and plans to nationalize these banks he claimed the funds where not bail out funds per say but some 2nd tier watever which would be recovered from the banks with time but now he has come to tell us that shareholders of such banks will be sidelined,what a joke.
Anyone that is not seeing the hand writing on the wall is in delusion,the fact is there is a grand plan to redistribute both ownership and shareholdings of banks in Nigeria and the north have made it clear their displeasure of the dominance of the South in the finance industry.A notable northern leader has been quoted as saying that the present status quo of southern dominance is not acceptable by the North. Sanusi is surely doing the northerners' bid,4get all the rhetorics and powerful oratory,there is a lot going on than meet the eyez,this is high tribal politics of dominance and not some stupid reform. May God help this country.

@CVIBE
Obviously,U are not convasant with what actually caused the financial problem in the US.In case U did't know,it was sth similar to nigeria's.Banks where giving mortgage to ppl who obviously couldn't pay back,there way cases of ppl who had a lot of mortgage debt hanging over their head that had also lost their job and could not pay back same as a biz man who borrowed money from the bank only for the biz to fail and as a result, he defaults,all still boil down to the dwindling economy and not the bank CEOs.The US government did't choose to go on rampage and start mass sacking,sidelining shareholders,creating uneccessary panic,hounding the ceos or even illegally using public funds to nationalize private banks in the name of 'we don't want these banks to fail'.

rhymz:

@CVIBE
Obviously,U are not convasant with what actually caused the financial problem in the US.In case U did't know,it was sth similar to nigeria's.Banks where giving mortgage to ppl who obviously couldn't pay back,there way cases of ppl who had a lot of mortgage debt hanging over their head that had also lost their job and could not pay back same as a biz man who borrowed money from the bank only for the biz to fail and as a result, he defaults,all still boil down to the dwindling economy and not the bank CEOs.The US government did't choose to go on rampage and start mass sacking,sidelining shareholders,creating uneccessary panic,hounding the ceos or even illegally using public funds to nationalize private banks in the name of 'we don't want these banks to fail'.

While what you say is true, you however, fail to take into consideration the insidious manner in which bank CEOs have been granting loans to their friends and families. Like you said, mortgage companies in the US gave mortgages to many people with bad credit. The problem with that was that, as soon as the economy started to shrink, many citizens who had been PAYING their mortgages, lost their jobs and started to default. That is not the same as Ibru giving a 15 billion naira loan to her nanny or Dangote, Ololo, Otedola collecting huge sums as loans and not servicing those loans.

@DuduKnight
We are saying thesame thing but differently.Most of what we have read or head is not true,Oceanic bank problem started after the management gave a whooping 42billiön naira loans to it's workers and subsidiaries to buy it's own shares,however,after the Cap Market crash all these banks started feeling the strains of their overexposure to the Cap mrk and oil industry.Let's face it,the røot of the problem is not the CEOs,these guyz also have stakes in these banks too,don't 4get that they are like the ownerz of these banks since they founded them,why will they want to destroy what they ve laboured for.The fact is that our economy is structured in such a way that for these banks to raise money for expansion project they have to always be in the cap Mrkt or for them to make profit and ensure good returns to shareholders,they have to fiercly invest in the oil sector which is about the only vibrant sector of our economy.Even the debtors that defaulted on thier debt did so as a result of the dwindling oil fortunes from falling prices to war in the Niger delta.
And pls don't be decieved by sensationalism,it's not possible that the CEOs lent out huge sum of money without colateral,it's either Sanusi is lying or he has been misquoted,i think he said 'inadequate colateral' and like i always say he will have to prove to the court what is his own definition of adequate colateral is,if it rhymz with the law then fine,if it does't,God help him.Even that story of ibru giving her nanny 12bil is a rumour,lacks substance,no intelligent person will believe that.As for the Debtors not servicing thier debts,it's very controversial as many have come out to debunk Mr Sanusi's list.The CEOs may have made bad decisions in the way and manner they granted loans but NPLs are inevitable and it does't mean the debtors won't pay back again,it's just that they have defaulted to pay as at when agreed.Sanusi is no better than the CEOs with his shoot before U aim approach.From his zigzag style U know the man has no serious plan besides talking,talking and talking and causing scare.

Yeah, why does Sanusi rely on sensationalism to convict these bank CEOs in the court of public opinion?

So the same Nairalanders that whine 24/7 about the 'Rawlings solution' and 'killing all our corrupt politicians' are the ones now complaining when Sanusi uses harsh words to elaborate on the gravity of the situation?

Also funny is the repeated analogy of the US banks and the bailouts that followed. The question is, how many of those CEOs were involved in serious shady financial deals?

Only a fool will deny that those 5 banks were in trouble and were in some level of distress. And this distress should have been spotted by an observant or competent supervisory body. In other words, Soludo should have taken steps to curb this hydra when signs and symptoms of distress started to emerge. So instead of asking what script Sanusi is acting, why is no one wondering what script Soludo was acting out when he silently stood aside while the bank CEOs were running the banks aground and diminishing shareholders' value?

I repeat for clarity - Why is no one asking what script Soludo was acting out? Is it because he's a southerner and deep down most of us are just tribalists?

Some remarks here point to the heart of the problems that plague Nigeria and, Nigerians. Every decision must have an ethnic connotation. What does a “Northern Script” got to do with bank managers that stole and, mismanage their client’s deposits? At what point are we going to grow up as a people and, support people that actually do the job for which they have been assigned creditably.
Yes, he can say the shareholders of the insolvent banks shave lost their investment in those banks because that is the truth. Banks, unlike other business does not necessarily file for bankruptcy; they get taking over by the regulatory bodies all over the world. The depositors are the ones that are protected and, not the shareholders. If the banks are able to meet their financial obligations, there is nothing the Central Bank can do even if the central bank governor has a regional agenda.
One thing that should be said clearly is that it is very difficult to do what Sanusi is doing. It is much easier to follow the path of indolence and, pretend all is well as is customary with Nigerian system. The fact though is, if the house is burning and, you ignore it, the inferno will sooner than later engulf you. No, he is not perfect and, neither is any of us. But ascribing ethnic agenda to him without credible evidence is myopic and, counterproductive.
To those who keep referring to the court of law, yes indeed, these officers will have their days in court and, nothing will happen to them unless they are found guilty by a court of competent jurisdiction. That is the guarantee afforded all of us by the constitution. But, you are confusing legal process for malfeasance with public chastisement by a person in the position of Sanusi. Talking against people that wreck this king of havoc against the heart of our economic system is part of his job.
It is getting clearer by that day that the problem with Nigeria is not that entirely that of leader but to a significant degree that of the led as well.

Kola

Stated below is what Sanusi said as reported in the Vanguard - word-for-word:

"The shareholders need to understand what we are doing and we are merely being charitable when we talk about shareholders. Look, you’ve lost your money. If your capital is zero or negative, you no longer have a bank. That is the truth people do not want to hear. Somebody says he’s speaking on behalf of shareholders. If we publish what we have, they will see; there is no capital, it’s been gambled away – that is the truth. But we’re trying to have discussions so that the shareholders would still have something."

People, you need to learn to read things in context. Within that contect, what Sanusi implied is that "if you capital is zero or negative, " then the shareholder's equity is also zero or negative. Try to read things and reason it iut for yourself and do not base your judgement on the opinions of others. These bank MDs are nothing but a highway robbers and they deserve to be lined up and killed for stealing the shareholders' money.

I wonder. . .
Is Sanusi not guilty of quite a few crimes now? It will be really interesting when and how he leaves office.

The man says one thing today and the opposite tomorrow; he prints 420 billion big ones without asking anybody; he unilaterally declares that shareholders have lost their money without a word from any legal body; then he wants to summarily shoot ex bank CEO's. . .

We are witnessing illiteracy of gargantuan proportions. Yes, a graduate "scholar" can be an illiterate!

Timmi:

Stated below is what Sanusi said as reported in the Vanguard - word-for-word:

"The shareholders need to understand what we are doing and we are merely being charitable when we talk about shareholders. Look, you’ve lost your money. If your capital is zero or negative, you no longer have a bank. That is the truth people do not want to hear. Somebody says he’s speaking on behalf of shareholders. If we publish what we have, they will see; there is no capital, it’s been gambled away – that is the truth. But we’re trying to have discussions so that the shareholders would still have something."

People, you need to learn to read things in context. Within that contect, what Sanusi implied is that "if you capital is zero or negative, " then the shareholder's equity is also zero or negative. Try to read things and reason it iut for yourself and do not base your judgement on the opinions of others. These bank MDs are nothing but a highway robbers and they deserve to be lined up and killed for stealing the shareholders' money.

Really? What context will that be? You are castigating others for not reasoning yet you concluded the bank MDs are highway robbers and need to be shot. On what basis did you reach that conclusion? From the propaganda being peddled by CBN or do you have the 'correct' financial statements of these banks?

It is interesting you asked people to reason within context. Under what context was the CBN governor making such unguarded statement? Do you realize that none of those 5 banks is trading below 3 naira per share as at Friday? Do you presuppose that any reputable bank has adjusted financial leverage ratio that's less than or equal to 1? Why would CBN governor make such a statement if his interest is for those banks to become viable? There can only be two reasons for such unguarded statement, either he wants their share value to get to 0 to allow cheap take-over or he is completely inept and over his head with his job. So, what happens to people that were buying those 5 banks shares on the premise that CBN governor had said (just a month ago) the banks only need to recapitalize to become very viable again.

By the way, how do you know their shareholders fund is negative or 0? That's what the CBN governor said. Is there any evidence of that? how many of those loans are outright loss and what portion is not covered under general and specific loan loss provision? Or do you think the man with the biggest megaphone is the person with all the truths? It is obvious the MDs were involved in at least mismanagement and bad business decision but it is equally obvious now that CBN over-exaggerated what was wrong with the banks to buy public support and sympathy with their unnecessary over the top approach.

I think he should talk less and be purposeful and constructive in his public speeches if he has any interest in preserving the jobs of about 100,000 nigerians working in those 8 banks.

This issue will surely come to an end and by then, we shall know who is right.

Sanusi has to watch the way he talks, in public