The following today, Thursday March 4, 2010, appeared in the public opinion section of our own The Guardian of Lagos, and I quote:

Stemming Northern marginalisation: In defence of Sanusi
By Shehu Abubakar

THERE is no sphere in Nigeria that clearly evidences the growing loss of relevance of Northern Nigeria as much as the banking sector. And it is a rude shock that many Nigerians of whatever persuasion - Christian or Muslim, southerner or northerner - do not appear to note the danger in this strange imbalance in a country in which all sections are supposed to develop at par. Even our "human rights activists" do not appear to be concerned with the fact that with ownership of banks and financial institutions so skewed to one section of the country, the associated long-run economic dis-empowerment of the other section is not only unjust but could spell economic doom for the entire country. In this regard, it is difficult not to see Charles Soludo's bank consolidation exercise as a deliberate ploy to marginalise the North.

There is a building in central Kano. Known as the Ahmadu Bello Building, it is, with about 12 storeys, the tallest building in all of Kano. That building used to be the head-office of Bank of the North. All of its floors were busy, occupied by executives rendering a core service to various sectors of the economy. If you visited the Ahmadu Bello Building in the '80s after its commissioning and even down to the last 10 years, it was a beehive of activities. You would see hordes of bank workers and customers.

Today, that building is nothing but a relic of the past. Only one or two floors are in use and close to 80 per cent of what ought to be prime property occupied by one of the most vibrant economic growth drivers of northern Nigeria is in a sorry state of decay. Indeed the building erected at great cost in 1980s is slowly coming to ruin. Its elevators when they manage to work are death traps and lack of maintenance is taking a serious toll on what used to be the pride of every resident of Kano, indeed every northerner. The Ahmadu Bello Building is only one victim of the recent banking consolidation exercise of former Central Bank of Nigeria Governor, Charles Soludo. Today, in forcefully merging Bank of North with several other strange bed-fellows, the CBN has deprived the people of Kano and by extension, northern Nigeria of the extensive benefits that this regional bank used to provide.

Bank of the North never aspired to be anything other than a regional bank. Its sphere of influence was very clearly defined and in our constitutional democracy was very legitimate. It existed clearly to help propel people from the northern part of our country from the fringe to the very mainstream of economic development. And all the state governors in the north subscribed to this and invested accordingly in this bank. Does it not amount to a breach of the rights of the people of the north for such a bank to be forcefully decreed out of existence as the CBN under Soludo did?

It is doubtful how much of its very clearly defined and articulated goals are understood by Unity Bank the quasi-national institution which Bank of the North was forced to metamorphose into. It is even more doubtful if in its efforts to demonstrate that it is a national bank, Unity Bank can connect anymore to the needs and aspirations of the peoples of northern Nigeria. Obviously just as it may be impossible for anyone who did not grow up in the creeks of the Nigeria Delta to fully appreciate the intricacies of life in that part of the country, so it is for those who have not truly experienced life in the core north to fully appreciate life in that part of Nigeria. And this is vital if a bank is to truly optimise its impact on the community. It is not only Bank of the North that lost out in this bizarre exercise of the CBN that headlined the leadership of Soludo. Intercity Bank also lost out. This predominantly northern bank no longer exists.

But if banks like Intercity and Bank of the North could be said to be regional banks focused on the north, Habib Bank was not. A clearly northern bank with professional and ethical tenets founded on the principles of Islam, Habib Bank even though a very successful northern-dominated bank, provided services on a national scale. With a presence across the country, it was a bank with which lots of northerners shared affiliation at various levels - commercial, cultural and spiritual. Consequently, it was common to see the Hausa or Fulani tailor in Ebute-Metta in Lagos for instance, go the extra mile to establish a banking relationship with a Habib Bank located all the way on Awolowo Road in Ikoyi. This was his own bank and banking with it was more than an ordinary transaction.

In the aftermath of Soludo's consolidation, Habib Bank simply disappeared. It was subsumed into a contraption that appeared confused as to who it was and what role it wanted to play in the economy. Rather, the new contraption appeared almost hell-bent on further emasculating the legacy of Habib completely out of existence. Otherwise, how does one explain the phenomenal growth of the legacy Platinum Bank in the new Bank PHB contraption? How does one explain its desperation to buy over first Afribank and later, Spring Bank if not part of the grand ploy to further dilute and completely annihilate the legacy of Habib?

It is in the light of these distortions in what ought to be a delicate economic balance in our country, that we must appreciate the interventions of Lamido Sanusi, our new CBN Governor. It does not need a professor of macro-economics to make us realise that the skewed nature of ownership of banks across the country could only have further spelt doom for us as it clearly worsened the economic disadvantage of Northern Nigeria. With more than 20 bank CEOs from the south of Nigeria, only Falalu Bello of Unity Bank is a Northerner. Indeed the only other northern bank CEO in the last six years was Sanusi himself and in all, he spent less than six months in office!

As Nigerians we must learn to begin to tell ourselves the truth. Soludo's banking consolidation may have benefitted the south but was a big disservice to the north and consequently may have been a disservice to the entire country. Sanusi's efforts to redress this situation should not be derided by elitist and self-seeking apostles of regional politics. Ultimately, the poor in Lafia, Gagagarawa, Zuru and Birnin Kebbi, need specialised banking and financial support like his counterpart in Koko, Uyo and Ogoni. This can, however, never happen if all the banks in Nigeria are southern banks, dressed in the self-deceptive toga of national banks.

Thankfully, the CBN has since systematically assumed control of Bank PHB and hopefully, should in due course extend its control to Unity Bank. Without prejudice to whatever misdemeanors by executives of the former that warranted the take-over, the CBN may wish to consider dismantling these unnecessary, fake and inefficient behemoths into the focused and efficient banking institutions which at least some of their components used to be. Let Habib Bank and Bank of the North re-emerge from these institutions as part of the new focus of the CBN to encourage regional and specialised banking. We can only further drive holistic economic growth and development if we empower every segment of our country to progress together.

    * Abubakar lives in Lagos

Unquote.

The link is at http://www.ngrguardiannews.com/editorial_opinion/article04//indexn2_html?pdate=040310&ptitle=Stemming%20Northern%20marginalisation:%20In%20defence%20of%20Sanusi

The article is food for thought, IMHO. I particularly find compelling the analogy by Abubakar, in paragraph five, to the dynamics of growing up in the creeks of the Niger Delta region, for example. With a national institution such as the banking sector and its regulators, such arguments hold quite some merit.

The article is BS. What stopped the bank of the north, intercity, and/or habib coming together to form a new 'northern' bank that would protect their interests?
The banks were given universal licenses and are structured accordingly. The author should carry his grievance to the defunct community banks

Sanusi’s First Bank: The Man’s Hypocrisy And Double Standards

Apr 6th, 2010 By Victor Shodipo


The statement below is an excerpt from an Equity Research Report of StanbicIBTC Plc (StanbicIBTC is a leading investment firm and deeply involved in CBN’s reforms as Adviser) published in ThisDay of Sunday, March 21, 2010, page 31.


“Given First Bank of Nigeria’s exposure to the oil and gas company SeaWolf, the bank faces risks of oil price volatility and instability in the oil and gas sector. The bank’s credit exposure to the company is currently about 29% of its shareholders’ funds. The CBN has instructed the bank to reduce its exposure to 20% by 31 March 2010. The bank intends to sell down its exposure to 15% but we do not believe this is likely because of the current low risk appetite in the (banking) industry”.


In July 2007, First Bank provided SeaWolf a US$260m bridge facility for the following:


• To acquire 100% of the equity of Mosvold Jack up Ltd (a publicly traded offshore drilling company quoted on the Norway Oslo Exchange)

• To make scheduled payments for two rigs under construction (MSV 104 and MSV, renamed Oristetimeyin and Onome)

• Make down payments for the purchase of West Titania (now Delta Queen) from Seadrill and;

• Meet operational and administrative expenses.

The global economic crisis, which resulted in a huge dip in oil prices, had a negative effect on the quality of the loan and the bank had to convert some of it to equity and also extend the duration due to low cash flows from the project.
Source: Thisday, Sunday March 21, 2010.


This loan to a single company is currently 29% of FBN shareholders’ funds according to the Stanbic IBTC Plc equity report. As at September 2009, First Bank’s Shareholders funds stood at N309 billion. 29% of this comes to N89 billion. This means First Bank’s current exposure to just a single loan is N89 billion well above the 20% limit set by the CBN!


It is important to note that this loan is not performing as expected hence the bank’s initiative to convert part of the loan to equity and sell a portion.The Daily Independent Newspapers, it will be recalled on January 20, 2010, had done an extensive report on the shady dealings that went into this facility which was given when Mallam Sanusi was the Chief Risk Officer of First Bank and later supervised as its MD/CEO.


Despite the fact that this loan is of doubtful recovery, the CBN under Mallam Sanusi turned a blind eye to this facility. First Bank’s total provision was N29 billion when it should not have been less than N118 billion if the provision for SeaWolf alone is added. This loan also raises more fundamental issues.

• What sort of ‘Risk Expert’ will approve the granting of an N89 billion loan to a single company that as at the time of collecting the loan was less than a year old?

• The Company was incorporated the same year (2007) it applied and got $260 million facility from First Bank of Nigeria Plc.

• Is it not hypocrisy that the same Mallam Sanusi that recommended the approval of this loan now turns round and refers to other bank MDs’ as reckless?

• What could be more reckless than risking 29% of your shareholders’ funds on a single obligor that has no track record in its industry of operation?

• Is it not the same global economic crises that torpedoed this business that also affected the Nigerian stock market for which reason Mallam Sanusi invaded the targeted banks?

The above report clearly further reveals the hypocrisy of the Mallam Sanusi’s largely personal attacks on the removed bank Managing Directors. This is a loan that has gone totally bad or at best has entered the stage of doubtful recovery.

While CBN forced its captured banks to make full and immediate provision for all facilities of doubtful recovery on its books, Mallam Sanusi has secretly given First Bank up to 31 March 2010, to “reduce its exposure to 20% of shareholders funds.”

Clearly, what is good for Sanusi at First Bank is not good for other banks.

MR. AG PRESIDENT, NIGERIANS COUNT ON YOU TO RESTORE ECONOMIC SANITY AND PROGRESS.

SIGNED



VICTOR SHODIPO

RENAISSANCE PROFESSIONALS

victorshodipo@renaissanceprofessionals.com

duwdu:

The following today, Thursday March 4, 2010, appeared in the public opinion section of our own The Guardian of Lagos, and I quote:

Stemming Northern marginalisation: In defence of Sanusi
By Shehu Abubakar

THERE is no sphere in Nigeria that clearly evidences the growing loss of relevance of Northern Nigeria as much as the banking sector. And it is a rude shock that many Nigerians of whatever persuasion - Christian or Muslim, southerner or northerner - do not appear to note the danger in this strange imbalance in a country in which all sections are supposed to develop at par. Even our "human rights activists" do not appear to be concerned with the fact that with ownership of banks and financial institutions so skewed to one section of the country, the associated long-run economic dis-empowerment of the other section is not only unjust but could spell economic doom for the entire country. In this regard, it is difficult not to see Charles Soludo's bank consolidation exercise as a deliberate ploy to marginalise the North.

If Sanusi's agend was to balance the skewed banking services in the country at the detriment of poor bankers, shareholders, and CEOs, he would have been bold enough to have said so.

There is a building in central Kano. Known as the Ahmadu Bello Building, it is, with about 12 storeys, the tallest building in all of Kano. That building used to be the head-office of Bank of the North. All of its floors were busy, occupied by executives rendering a core service to various sectors of the economy. If you visited the Ahmadu Bello Building in the '80s after its commissioning and even down to the last 10 years, it was a beehive of activities. You would see hordes of bank workers and customers.

Today, that building is nothing but a relic of the past. Only one or two floors are in use and close to 80 per cent of what ought to be prime property occupied by one of the most vibrant economic growth drivers of northern Nigeria is in a sorry state of decay. Indeed the building erected at great cost in 1980s is slowly coming to ruin. Its elevators when they manage to work are death traps and lack of maintenance is taking a serious toll on what used to be the pride of every resident of Kano, indeed every northerner. The Ahmadu Bello Building is only one victim of the recent banking consolidation exercise of former Central Bank of Nigeria Governor, Charles Soludo. Today, in forcefully merging Bank of North with several other strange bed-fellows, the CBN has deprived the people of Kano and by extension, northern Nigeria of the extensive benefits that this regional bank used to provide.

Nostalgia only serves a positive purpose when relieved honestly and truthfully. All over Nigeria, there're empty tall buildings of many other regional banks, check out the CCB building in Enugu for example

Bank of the North never aspired to be anything other than a regional bank. Its sphere of influence was very clearly defined and in our constitutional democracy was very legitimate. It existed clearly to help propel people from the northern part of our country from the fringe to the very mainstream of economic development. And all the state governors in the north subscribed to this and invested accordingly in this bank. Does it not amount to a breach of the rights of the people of the north for such a bank to be forcefully decreed out of existence as the CBN under Soludo did?

It is doubtful how much of its very clearly defined and articulated goals are understood by Unity Bank the quasi-national institution which Bank of the North was forced to metamorphose into. It is even more doubtful if in its efforts to demonstrate that it is a national bank, Unity Bank can connect anymore to the needs and aspirations of the peoples of northern Nigeria. Obviously just as it may be impossible for anyone who did not grow up in the creeks of the Nigeria Delta to fully appreciate the intricacies of life in that part of the country, so it is for those who have not truly experienced life in the core north to fully appreciate life in that part of Nigeria. And this is vital if a bank is to truly optimise its impact on the community. It is not only Bank of the North that lost out in this bizarre exercise of the CBN that headlined the leadership of Soludo. Intercity Bank also lost out. This predominantly northern bank no longer exists.

But if banks like Intercity and Bank of the North could be said to be regional banks focused on the north, Habib Bank was not. A clearly northern bank with professional and ethical tenets founded on the principles of Islam, Habib Bank even though a very successful northern-dominated bank, provided services on a national scale. With a presence across the country, it was a bank with which lots of northerners shared affiliation at various levels - commercial, cultural and spiritual. Consequently, it was common to see the Hausa or Fulani tailor in Ebute-Metta in Lagos for instance, go the extra mile to establish a banking relationship with a Habib Bank located all the way on Awolowo Road in Ikoyi. This was his own bank and banking with it was more than an ordinary transaction.

Bank of the North and Habib Bank were not the only regional banks, ever heard of Owena Bank, ACB, etc. They all disappeared or merged under the consolidation excersise that was carried out to strenghten the industry. If Sanusi was acting your script, it will be easy to see why he appears confused, and stupid: he is trying to enact a regional agend under the cover and disguise of a national agent of change.

In the aftermath of Soludo's consolidation, Habib Bank simply disappeared. It was subsumed into a contraption that appeared confused as to who it was and what role it wanted to play in the economy. Rather, the new contraption appeared almost hell-bent on further emasculating the legacy of Habib completely out of existence. Otherwise, how does one explain the phenomenal growth of the legacy Platinum Bank in the new Bank PHB contraption? How does one explain its desperation to buy over first Afribank and later, Spring Bank if not part of the grand ploy to further dilute and completely annihilate the legacy of Habib?

It is in the light of these distortions in what ought to be a delicate economic balance in our country, that we must appreciate the interventions of Lamido Sanusi, our new CBN Governor. It does not need a professor of macro-economics to make us realise that the skewed nature of ownership of banks across the country could only have further spelt doom for us as it clearly worsened the economic disadvantage of Northern Nigeria. With more than 20 bank CEOs from the south of Nigeria, only Falalu Bello of Unity Bank is a Northerner. Indeed the only other northern bank CEO in the last six years was Sanusi himself and in all, he spent less than six months in office!

Your example is the most outrageous use of federal character ever to be imagined in this place called Nigeria. So, the Ibrus, Akingbolas used their money to invest and build banks, while the northern billionaires like Danatata, Ishaq Rabiu, Dangote used their money in other types of venture. A few years later, you want to decry lack of northerners in banking industry? If balancing the the number of southern vs norhtern CEOs of the banks was Sanusi's motive, why didn't the idiot just say so, instead of making wild and unproven allegations of criminal practices against these hard working bank CEOs? More over the northern millionaires could easily buy and assume control of these banks if they had wanted to, no, that would have been hard work. Bringing in Sanusi was the direct shot to balance north vs south banking disequillibrium that had existed for more than 200 years? Fairness and honesty demands that you lazy ass, parasitic, good for nothing northern oligarchs can do better. Or, you can just ride your horses down south, collect as many slaves as you can, and make them work for your ass all day and all night---- just like Othman dan Fodio did.

As Nigerians we must learn to begin to tell ourselves the truth. Soludo's banking consolidation may have benefitted the south but was a big disservice to the north and consequently may have been a disservice to the entire country. Sanusi's efforts to redress this situation should not be derided by elitist and self-seeking apostles of regional politics. Ultimately, the poor in Lafia, Gagagarawa, Zuru and Birnin Kebbi, need specialised banking and financial support like his counterpart in Koko, Uyo and Ogoni. This can, however, never happen if all the banks in Nigeria are southern banks, dressed in the self-deceptive toga of national banks.

Thankfully, the CBN has since systematically assumed control of Bank PHB and hopefully, should in due course extend its control to Unity Bank. Without prejudice to whatever misdemeanors by executives of the former that warranted the take-over, the CBN may wish to consider dismantling these unnecessary, fake and inefficient behemoths into the focused and efficient banking institutions which at least some of their components used to be. Let Habib Bank and Bank of the North re-emerge from these institutions as part of the new focus of the CBN to encourage regional and specialised banking. We can only further drive holistic economic growth and development if we empower every segment of our country to progress together.

The article is food for thought, IMHO. I particularly find compelling the analogy by Abubakar, in paragraph five, to the dynamics of growing up in the creeks of the Niger Delta region, for example. With a national institution such as the banking sector and its regulators, such arguments hold quite some merit.

Truth is bitter, and I think the writer of this article is allergic to truth.
Unfortunately something deep and dark tells me he is reflecting the real position of the CBN governor in this article. So, the south has an advantage in banking, so what? Why didn't the author and Sanusi think about other areas, the north has advantages over the south? The states and regions will never be completely equal in all areas of human endevour, it's impossible. Are you going to rob and steal people's hard earned incomes, properties, and positions, just because you're on a mission to equalize north and south banking strenghts?
Sanusi and all those who defend him must refute this diabolical article fast and furiously, otherwise all their arguments of acting to protect and preserve the banking industry in Nigeria will come to naught.

@naijaking1
i dey gbadun u always.