Shareholders of the eight banks recently taken over by the Central Bank of Nigeria have automatically lost their investments in the banks.
The CBN governor, Lamido Sanusi disclosed this yesterday in Lagos while speaking at a policy dialogue organised by the Nigerian Economic Summit Group.
The banks - Union Bank of Nigeria Plc, Oceanic Bank Plc, Intercontinental Bank Plc, Afribank Plc, FinBank Plc, Bank PHB plc, Spring Bank Plc and Equatorial Trust Bank Limited – were found to be in a grave condition after the CBN’s audit of the 24 banks in the country, prompting the injection of N620 billion into the affected institutions by the Reserve Bank.
He pointed out that the result of the audit in the eight banks indicated that the non-performing loans of most of them exceeded their share capital, which resulted in a situation whereby their balance sheets had a negative networth.
“Their shareholders’ funds were eroded from the provisioning for loan losses, leading to an erosion of their investments in the banks,” the governor explained.
He said the sacked bank executives and shareholders that went to court challenging their removal and alleged take-over of the banks, failed to realise they are no longer shareholders of the banks going by the books of accounts of the institutions.
“It is the government (or rather, the CBN) that has provided the bailout that has a claim on the investments. But any other shareholder can emerge after the debts of the banks have been recovered.
“That is what the aggrieved shareholders and former CEOs don’t seem to understand, which is why they even kicked against our debt recovery efforts that ordinarily will favour them,” he explained.
He said the other set of people with claims on the banks are depositors and creditors, whose interest he said the CBN was doing everything to protect by not allowing the banks to fail.
“As far as I know, the so called key shareholders and bank executives that ruined these banks do not deserve a place again in the institutions but should find their place in jail or even be shot dead,” said Sanusi in an emotionally laden voice.
He pointed out that the shareholders have been affected by the grave situation the banks were plunged into.
Sanusi said for some of the banks, the percentage of non-performing loans to total loans was nearing 50 per cent and that these represented loans tied to the capital market that has lost about 70 per cent of its value.
The CBN governor disclosed that one of the banks had non-performing loans of over N300 billion and that the CEO of a particular bank wired £13 million to himself without any transaction to back it.
He however, regretted that the audit was belated, adding that because of it the economy has been deeply affected by the negative consequences that has manifested in an acute credit crunch.
“The problem started as far back as October last year when some banks became permanent customers of the Expanded Discount Window, which was a symptom of a deeper problem.
“Any risk manager that didn’t see that as a sign of a big problem is not worth being called a risk manager.
“The situation necessitated the audit of the banks when I became governor, and it was discovered that five banks accounted for 90 per cent of the borrowings from the expanded discount window. The rest is now history.
“What the CBN is after now is how to make the banks recover and perform their role of financial intermediation for economic growth and development,” said Sanusi.
On inflation, Sanusi said: “Inflation has been reducing, likewise interest rates, but if 20 per cent of the budget is not spent and the economy grinds to a halt, it is not CBN’s problem but that of the government.”
He said government has to work for the economy to move forward, adding that part of the problems of the banking system is that the banks have taken an undue burden of economic growth.
The director general of NESG, Frank Nweke Jr, said the group conveyed the policy dialogue to get first hand information on the objectives of the CBN’s intervention in the banks and to enable the private sector make their input to the reforms.
The chairman of the occasion, Fola Adeola, co-founder and former managing director of Guaranty Trust Bank Plc, enjoined banks to always heed regulations for the stability of the financial system.
The chairman of the NESG, Mazi Sam Ohuabunwa, urged the CBN to fast-track the second phase of the reforms to return the financial system to stability and restore confidence in the system and the economy.

http://www.thisdayonline.com/nview.php?id=157894

Chei, e don be.
So my money is gone.

awhh! poor minor shareholders, I hope those fraudsters lose their personal assets to the national treasury and spend a long time (without pardon) behind maximum security bars.

I am not racist.But Nigeria's problem has always been the North.Imagine a CBN governor prescribing death penalty for the CEOs.Nigerians are too daft in their thinking.All the people that were singing the praise of the governor.The whole picture was designed to take the banks from Southerners and hand them over to the North via private placements.
Nigeria is due for a revolution.That's what i am calling for.

I :oHOPE THIS IS A JOKE?

The death prescription was primitive.

I have to think this over before i give a response!!!

sandee575:

The death prescription was primitive.

Not only that, but more worryingly, attributable to the governor of a central bank.

chuckvyl:

I am not racist.But Nigeria's problem has always been the North.Imagine a CBN governor prescribing death penalty for the CEOs.Nigerians are too daft in their thinking.All the people that were singing the praise of the governor.The whole picture was designed to take the banks from Southerners and hand them over to the North via private placements.
Nigeria is due for a revolution.That's what i am calling for.

Oga, Oga Chuckvyl, don't stereotype the North, they have contributed to the deterioration of the national economy like other geographical zones have. Cyril Chukwumah , G.O. Folayan, Mrs. Sola Ayodele dont sound like northern names.
As for the death penalty, he was only expressing the gravity of their offense, he is not the judge. It is the publics money involved, do u know how many citizens would suffer a set back (strokes, closed businesses etc.).
It will be nice if fraudsters lose all their money and go for 20years behind bars, and those on National assignment should go for life.

Duduknight:

Not only that, but more worryingly, attributable to the governor of a central bank.

It obvious the guy is acting a scripted drama. The northern/hidden agenda is beginning to manifest with every passing day. Look at someone that calls himself central bank governor telling shareholders to their face that their hard earned money is gone. Gone to where? to the northerners?

He must be joking!!!

Not only that, but more worryingly, attributable to the governor of a central bank.

its worrisome

tobiecxs:

Oga, Oga Chuckvyl, don't stereotype the North, they have contributed to the deterioration of the national economy like other geographical zones have. Cyril Chukwumah , G.O. Folayan, Mrs. Sola Ayodele dont sound like northern names.
As for the death penalty, he was only expressing the gravity of their offense, he is not the judge. It is the publics money involved, do u know how many citizens would suffer a set back (strokes, closed businesses etc.).
It will be nice if fraudsters lose all their money and go for 20years behind bars, and those on National assignment should go for life.

I agree with what you are saying but a public figure should not make such unguarded comments. He is free to think in this way or share his opinion in private but not through a medium where it can get to the public domain. Like some people have said, he seems to have an agenda.

Oga, Oga Chuckvyl, don't stereotype the North, they have contributed to the deterioration of the national economy like other geographical zones have. Cyril Chukwumah , G.O. Folayan, Mrs. Sola Ayodele dont sound like northern names.
As for the death penalty, he was only expressing the gravity of their offense, he is not the judge. It is the publics money involved, do u know how many citizens would suffer a set back (strokes, closed businesses etc.).
It will be nice if fraudsters lose all their money and go for 20years behind bars, and those on National assignment should go for life.

@Tobiecxs
This people you mentioned have not been convicted of any crime.Why not leave it to the courts to their jobs?A CBN governor should not be making utterances like a motor park tout.He is so unguarded in his speeches.It's a shame.The reason why this happens is because Nigeria is a lawless land.He should be educated enough to know that even if they were convicted of those crimes,that the constitution only prescribes death penalty if you took or planned to take the live of another person.The people concerned have a right to sue the governor to court for planning to assassinate them.How safe can you be when someone is wishing you death?

chosen04:


It obvious the guy is acting a scripted drama. The northern/hidden agenda is beginning to manifest with every passing day. Look at someone that calls himself central bank governor telling shareholders to their face that their hard earned money is gone. Gone to where? to the northerners?

He must be joking!!!

Am beginning to reason likewise.

Hmmn, I think its true there are hidden agenda, anywayz soon enough it will be obvious

The fellow Sanusi is full of CRAP!

The Banks need to die first before the shareholder loose their investment!

Those banks are still intact with same name!

They have not file for Bankruptcy or insolvency!

Nigerians should rise up against this rubbish; back door TAKE OVER of other people's sweat!

At worst, the shares are being held in custody by FG for the shareholders and when situation improves FG has to sell back the shares if they have acquired it in the first instance!

What a banana country.

It sounds a bit disgusting to see some people trying to put the blame on Sanusi. These people have been accused of grave financial crime and we should leave it for the court to decide. Sanusi sounds so confident because he is privy to some information that is not available to us now that can ultimately lead to the conviction of these guys in court.

I guess we should all rise up to support Sanusi that is trying to save people of their hard-earned money, rather than sounding unnecessarily tribalistic.

it is either We are foolish followers or some people think we dont have sense. You can tribalize for all I care I will be happy with a man that defends me wether he speaks my language or not.

I know how much money I have in shares in banks in Nigeria I might have lost it but I dont give a damn if a man from Afghanistan catches a man stealing me I dont care If that guy was my mothers son.

If Sanusi is doing is job and people have failed in their cooperate governance and even committed crime they should be dealt with Period. I dont care if it is a Turban wearing and Knife wearing muslim from the Caliphate that solve the problem.

Which Script?

These Elite with their machinery of the media. People are going to die because of the crimes committed allegedly by these people in big suits. Some kids will die before their time. The CEO have destroyed Generations. The bank is like a country if this was yaradua or our president you will see our Elite shooting all kinds of news.

You know there was a time I sat with some one and he was telling me that he will never become minister that he was ok with the contracts he got from the government of his country. He told me that when a contract is executed the minister is held responsible.

We have a governance problem and why because some at post tend to look at their pockets first.

Sanusi has finally gone mad. What a primitive style of thinking!
So all along, his plan was really to steal those banks? Well, its being confirmed.

“As far as I know, the so called key shareholders and bank executives that ruined these banks do not deserve a place again in the institutions but should find their place in jail or even be shot dead,”said Sanusi in an emotionally laden voice.

it is either We are foolish followers or some people think we dont have sense. You can tribalize for all I care I will be happy with a man that defends me wether he speaks my language or not.

I know how much money I have in shares in banks in Nigeria I might have lost it but I dont give a damn if a man from Afghanistan catches a man stealing me I dont care If that guy was my mothers son.

If Sanusi is doing is job and people have failed in their cooperate governance and even committed crime they should be dealt with Period. I dont care if it is a Turban wearing and Knife wearing muslim from the Caliphate that solve the problem.

Which Script?

These Elite with their machinery of the media. People are going to die because of the crimes committed allegedly by these people in big suits. Some kids will die before their time. The CEO have destroyed Generations. The bank is like a country if this was yaradua or our president you will see our Elite shooting all kinds of news.

You know there was a time I sat with some one and he was telling me that he will never become minister that he was ok with the contracts he got from the government of his country. He told me that when a contract is executed the minister is held responsible.

We have a governance problem and why because some at post tend to look at their pockets first.

@Rethink
I'm very surprised to hear that from you.What do you know about corporate governance and finance?Citigroup,AIG,RBS that nearly went bankrupt and were bailed out by their separate governments never made such comments about the CEOs of the companies.And the shareholders were never pushed out.Shareholders lose the stake once a company goes bankrupt,That is the way it is done.The banks in Nigeria concerned are not bankrupt.Forget whatever CBN is telling you.It is the banks that determine how much help they need.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 and everything happening today have been orchestrated by the North.Believe it or not.Just use your mind.The North has used you people for years in that country.Maybe u invested 10,000 naira in stocks thats why you don't give a damn.Rethink please rethink.Until the courts determine that they have commited crime they are innocent before the law.I understand that decades of millitary rule has eroded every ounce of democratic sense we have.

As a shareholder in some of these banks, I totally agree with Lamido - the CEOs and the billionares who borrowed the money with no intention of paying back do not deserve to live.  They should all be shot dead at Bar Beach.  They are nothing but armed robbers and thieves of the highest order.

Seriously, I dont seee why minoroty shareholders should take the fall and why you dont want the CEOs killed.
Think of how many people have planned against their earnings from d investments and now have no hope.
What am actually gonna ask is why they v withheld the name of the CEO that wired £13m to his account. Them don start wuruwuru again ooooooooo!!!!!!!!!!!!

@ 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.

@Chuckvyl

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.

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.

We southerners are becoming very discrminatory

1) Bokom Harram killed off in 2 days Militants rewarded with money Masob leader freed.
2) Northern governors thrown in Jail but touch southern governors they dealt with Ribadu

OOh I can now see how you intend to use me to see that the problem is not just the theiving Elite but the North. I think we should Ethnically cleanse these cow chasing second class citizen dont you think? We should kill them all


I have lived in a democrasy for 14 years.

@ Timmi

You couldnt have put it better. Bravo !

I do not understand why people are taking the "shoot them" out of context. Sanusi was just trying to harp on the gravity of the financial crime committed by these CEOs.

Let's concentrate on the real issue (which is the CEO corruption case) rather than engage in unneccessary distraction._{afterall obama called someone jackass, and heaven never fall}

I hope this is a joke. I invested in Oceanic bank, don't believe this nonsense

Lucky me. Bank PHB is the only bank that I have an investment in that was affected; the rest of my investments are in the unaffected banks. Thank God I did not listen to friend who almost persuaded me to invest in Inter continental and Union Banks. I wonder how folks who have investments in many, if not all, of the failed banks would do now?

chuckvyl:

I am not racist.But Nigeria's problem has always been the North.Imagine a CBN governor prescribing death penalty for the CEOs.Nigerians are too daft in their thinking.All the people that were singing the praise of the governor.The whole picture was designed to take the banks from Southerners and hand them over to the North via private placements.

hahahahahahaha. I have now officially seen it all, heard it all. OH, the irony!!

Quite a reckless comment, coming from CBN governor. Sometimes i wonder if Sanusi has not been overpromoted
into incompetence. From a unit head to FBN governor to CBN governor within a very short space of time. Yaradua should
check this aboki who does not seen to realise the weight of his task as CBN governor.

this guy is trying to get the Nigerian community angry at the bank executives so that he can push for stiffer punishments for them. I understand his move to sanitize the banking industry but he is going overboard. the stock market relies solely on the faith of buyers in order for it to survive and this guy is killing the Nigerian stock market with his very reckless statements. many people have already started investing their money in foreign stock markets because of his insensitivity. this man is killing the non-oil industries that are supporting our economy.