The audit result of the remaining 14 banks has been released with the Central Bank of Nigeria (CBN) sacking the managing directors/chief executive officers and all executive and non-executive directors of three banks. Also to improve the liquidity position of the affected banks, the apex bank injected N200 billion bailout into them.
The CBN, in a press statement released on Friday in Abuja, announced the sacking of the managing directors of Platinum Habib Bank (BankPHB), Equitorial Trust Bank and Spring Bank, stating that these banks were in danger. The sacked managing directors are Francis Atuche (BankPHB), Ike Oraekwuotu (Equitorial Trust Bank) and Charles Ojo (Spring Bank).
To arrest the situation in these banks, the apex bank took a number of measures which included the removal of the managing directors and the appointment of new ones for the banks and the order to the board of Wema Bank Plc to recapitalise by June 30, 2010. Mr. Cyril Chukwumah was appointed the new Managing Director for Bank PHB Plc, Mr. G.O. Folayan (Equitorial Trust Bank Plc) and Mrs. Sola Ayodele (Spring Bank Plc). Dr. Mike Adenuga, jnr., was removed as a non-executive director of Equitorial Trust Bank Plc.
According to the CBN, it was noted that Wema Bank Plc, which came under new ownership and management in June 2009, is in a grave situation and added that the new owners should not be held responsible for the present condition of the bank. It said it would work with the bank to ensure a successful completion of the recapitalisation.
The provision of N200 billion as liquidity support and long term loans for the four banks adjudged to be in a grave situation, the apex bank said, was to enable them continue normal business while pursuing recapitalisation options. The CBN also ordered the board of Unity Bank Plc to recapitalise by June 30, 2010.
It noted that Unity Bank Plc was adjudged to have insufficient capital for its current level of operations, but was adjudged to have a healthy liquidity position and with no indication of poor corporate governance practices.
“The CBN has, therefore, exercised its powers under Section 13.3 of BOFIA to order the board of Unity Bank Plc to recapitalise by the said date and the CBN will continue to monitor this situation,” the statement said.
It added that “the CBN will assist the five banks with insufficient capital in their loan recovery efforts, just as it did with the previous five. The CBN is happy to report that as at 25 September 2009, the five banks had recovered more than N110 billion of previously non-performing loans.
“The CBN reiterates its commitment to stand by all Nigerian banks and work with their respective boards, management and other stakeholders to restore the stability of the financial system and, thus, ensure that our banks are able to effectively play their role in economic growth and development.”
It is not a totally bad situation for nine banks, however, as the CBN found them to have adequate capital and liquidity to support the level of their current operations and future growth.
They are Access Bank Plc, Citibank Nigeria Limited, Ecobank Nigeria Plc, Fidelity Bank Plc, First City Monument Bank Plc, Skye Bank Plc, Stanbic IBTC Bank Plc, Standard Chartered Bank Limited and Zenith Bank Plc.
However, the CBN said the 10th bank — Unity Bank — was adjudged to have insufficient capital but not in grave situation because it had a healthy liquidity position.
As a long term measure, the CBN said in furtherance of the commitment of the Federal Government to the growth and stability of the financial system, President Umaru Yar’Adua had directed the Minister of Finance and the Central Bank governor to liaise with the Attorney-General of the Federation and Minister of Justice, the National Assembly and other relevant stakeholders with a view to fast-tracking the process of establishing an asset management company.
The formation of this company should facilitate an improvement in banking sector liquidity, protection of the earnings of banks from further erosion and a reduction of the debt overhang on the capital market and its participants.
‘’With the conclusion of the bank audit exercise, we have come to the end of the first phase of the process of restoring financial sector stability. Ongoing action will focus on building capacity within the regulatory regime; fast-tracking the implementation of risk-based, consolidated and cross border supervision frameworks; easing the flow of credit, particularly to the real sector of the economy; improving governance structures and practices in the financial services sector; and improving confidence in the economy in general,” the apex bank said.
Meanwhile, the Economic and Financial Crimes Commission (EFCC) has reportedly placed the management teams of the banks indicted for insider abuse in the fresh audit by the CBN under surveillance.
A source within the commission disclosed that the commission had started working on the areas that concerned it since the final audit report got into the possession of the commission’s leadership. The surveillance mounted on the indicted bank chiefs, according to the source, was to prevent those who were recommended for trial in the audit report from fleeing the country.
The former Group Managing Director of Intercontinental Bank Plc, Erastus Akingbola, who was sacked alongside the five bank bosses earlier indicted for insider abuse, fled the country in the wake of the arrest of others and had been declared wanted by the commission.
Fourteen indicted bank chiefs are being prosecuted by the commission. It was further gathered that the commission’s operatives, who worked on the initial five troubled banks, had been drafted to the fresh case.
Apart from the indicted bank chiefs, debtors of non-performing loans are also said to be on the radar of the commission. The commission had assisted the initial five troubled banks to recover about N108 billion out of about N747 billion non-performing loans said to have been owed them.
Both the bank chiefs fingered in the first round of the audit and some high-profile loan defaulters were arrested by the commission. It was further gathered that the commission’s operatives might move in next week for the arrest of the defaulters and the indicted bank chiefs mentioned in the last audit.
Meanwhile, some of the former bank chiefs who are being prosecuted by the commission made an appearance at its headquarters in Abuja on Friday.
They were there in fulfillment of one of their bail conditions, which compelled their appearance at the commission’s office every first Friday of the month till the end of their trial.
Those that appeared yesterday included former Chairman of Intercontinental Bank Plc, Chief Raymond Obieri; former Group Managing Director of Afribank Plc, Sebastian Adigwe; former Group Managing Director of Union Bank, Barth Ebong; four former directors of Intercontinental Bank, among others.
In another development, to avoid his removal from office, on Friday, before the CBN announced his sack along with two others, the Group Managing Director and Chief Executive Officer of Platinum Habib Bank (BankPHB), Mr. Francis Atuche, resigned from his position.
Sources within the bank said Atuche threw in the towel in the morning after it was established that his bank was one of the three that had been found culpable in the audit report.
The sources said that Atuche, after his resignation as the bank’s helmsman, sent an email to most of the staff of the bank thanking them for their support while he was in the office and also bidding them goodbye.
“The news just reached us this morning that he has resigned and he also sent email to some us thanking us for our support and bidding us goodbye,” one of the sources said.
Confirming the development, Director-General and Chief Executive Officer of the Nigerian Stock Exchange (NSE), Professor (Mrs.) Ndi Okereke-Onyuike, said that two of the three companies involved in the crisis were quoted on the Exchange.
She said that any action taken on the two affected companies would be decided on Monday, adding that all the actions would be made known on the same day
No comments:
Post a Comment