ECOBANK AND ITS MISLEADING PUBLISHED FINACIAL REPORT FOR YEAR 2010
By Nenum

On May 5, Ecobank Nigeria Plc published its financial statements extract for the year ended December 31, 2009 in variance to year end  December 31, 2008 in four or five national dailies, which was audited by PriceWater House Coopers and signed by Olor’ogun (Dr.) Sonny Kuku, OFR (Chairman) and Jubril Aku (ED).
  The bank also published its unaudited result for the first quarter of 2010 (duration of January 1 to March 31, 2010) in variance to first quarter of 2009 (duration of January 1 to March 31, 2009) statements meant for the Nigerian Stock Exchange and shareholders.
  This was signed by the Company Secretary Nike Laoye by Order of the Board of Directors.
  The published financial statement (for the year ended December 31, 2010) was in accordance with Nigerian Statements of Accounting Standard (NSAS) and with the requirements of the Companies and Allied Matters Act and Banks and other Financial Institutions Acts.
  According to SAS 30 of the Nigerian Accounting Standard Board, interim financial reports are accounting information covering the operations of an organisation for a period less than a full financial year, developed at various points during the year. Such reports usually cover a period of three, six or nine months.
  These interim financial reports published by banks serve as key financial indicators especially to shareholders. That is why the Nigerian Stock Exchange was irked by the fact that some of the banks went ahead to publish their accounts without its approval sometimes in December 2009.
   According to a report in the Vanguard newspaper of  December 15, 2009, titled: “NSE queries banks for publishing unaudited accounts”, the newspaper said that it sighted one of the letters sent to one of the affected banks, in which the management of the Exchange said: “We have noted with dismay, a publication in the media where you published your unaudited financial statement for the period ended
September 30, 2009, without our approval”.
  Confirming the development, an official of the Exchange said the banks were being sanctioned for breaching post-listing requirements. He added that the post-listing requirement requires listed companies to inform the Exchange before they publish their results.
  This therefore emphasis the importance of banks publishing their interim financial reports from time to time.
  As a shareholder of Ecobank, little wonder I was beyond shock when I read the 2010 first quarter unaudited results published by Ecobank as approved by the board.
  The balance sheet for the first quarter ended March 31, 2009 (used for the variance analysis as against March 31, 2010) was directly lifted or should I say did not change with the position of the balance sheet when it was latter audited as at December 31, 2010 (a difference of nine months of continuous banking or three other financial quarters).
  Invariably, the report submitted by Ecobank indicated that the cash and balances, due from other banks and financial institutions, loans and advances and deposits stood at N9.52 billion, N73.49 billion, N183.71 billion and N 266.15 billion respectively for the same period, so also goes for the other entire assets, liabilities and shareholders’ funds. Therefore the total balance sheet side stood at N355.66 billion as at March 31, 2009 which was the same as at December 31, 2009 (meaning the books presented to PriceWater Coopers to audit as at December 31, 2009, was already known as at March 31, 2009).
  This is a clear case of distortion of account information, as I am aware that every bank is required as soon as practicable after the last working day of each month, to prepare a return on its assets and liabilities as at the close of business on the last day, or if the last day is a holiday, as at the close of business on the last preceding business day.
  Therefore, Ecobank inclusive, must have prepared its books on the last day of the past three months leading to the figure used for the quarterly report.
  My question then is, what was wrong with the collated final unaudited quarterly figure as at March 31, 2009 (which incidentally varies with the quarterly on the audited reports for the first quarter of 2010) or is the error in the audited financial figure as at December 31, 2009?
  Mildly put, there seems a clear case of mis-representation of the bank’s financial books.
  If this is the case, which I pray is not, it then means the entire audited financial report of the year ended December 31, 2009 is in error and the first quarter report for 2010 should also be looked into (based on the principle of going concern).
  Mr. Shafii Ndanusa in his article: “Beyond the camels’ ratings: A model for predicting banks’ failure in Nigeria”, September 18, 2009, while trying to analysis the impact of the N420 billion life line support through the Expanded Discount Window, he said: “Imagine the benefits that could have accrued to the entire Nigerian economy had the CBN correctly predicted the bank failures two years prior to now. Perhaps there would have been no need for the Expanded Discount Window and no need for the N420 billion bailout fund! Those funds could have been channeled to other critical needs of the economy”.
  But I would like to ask, why are financial books continuously being distorted so as not to present the true picture of the state of things? How do you then proffer remedy, when such financial reports are to serve as basis on which the investing public takes timely investment and other decisions?
  I would immediately call on the management and board of the bank to retract both the financial year end statement as at March 31, 2009 and the unuadited quarterly result for the first quarter of 2010 and a full and proper investigation done.
  I also call on the Nigerian Accounting Standard Board (NASB), the CBN and Nigerian Stock Exchange (NSE) to ensure that this is done and the proper book of accounts is rendered in the shortest possible time, so that the shareholders do not suffer as a result of this shocking misrepresentations of account statement.
  As earlier implied, a stitch in time they say saves nine. This must be nibbled in the bud immediately.