STATE OF BANKS IN NIGERIA AND THEIR FUTURE

STATE OF BANKS IN NIGERIA AND THEIR FUTURE.
I cannot express the level of insensitivity by the CEO’s of banks in Nigeria to shareholders and depositors funds, we taught when the their capital base was raised to N50 bn and these banks have come stay for good till eternity and for development, but instead the CEO’s became frivolous with funds put in their custodies as personal monies for their ostentatious life style with their cronies and so called “BIG Fish or the untouchables” in the society.
The wind has now blown to expose fowl asshole; they lived a false life that is to those five that have been exposed and sacked by CBN and some others yet to be exposed.
Their wrongs:
1. Though they helped in creating temporary jobs for Nigerians that will discharge them back to labour market very soon and this is their only right.

2. They have succeeded in circulating or spreading massively shareholders funds in the hands the big fishes and their hands again e.g . Aig and Herbert Wigwe of UNITED ALLIANCE COMPANY OF NIG. LTD. and Access bank using their position to obtain 16.2 billion Naira loan in Intercontinental bank Plc.

3. Year after year they were bagging both national and international awards, all in falsehood and deceit.

4. Instead of creating an effective retail banking that will also provide soft loans for unemployed graduates that will easily pay back the loans for SME’s but they choose to make the “bigs” get bigger perhaps to buy shares in transcorp or acquire NITEL etc, import our Petroleum as products, run elections etc. and personal wealth aggrandizement in staggering billions of Naira by CEO’s of banks.

5. Prof. Soludo former CBN Governor did not also help matters he also helped in the deceit till it got to this stage by giving the impression that all is well in the banking sector..

6. l thought these banks have good risk management or managers/officers, maybe they only exit on ground but not active or perhaps they are rubber stamps receiving fat salaries at the end of each months.

7. Too much money lying fallow their vaults and they were misused by the CEO’s of these banks, we taught after the so called big banks acquired the smaller ones e.g. Access bank PLC they right and downsized or sacked all the staff of the two other banks without entitlements paid and even those that actually received something, were short paid, overtaxed and money recollected for clearance. We taught new life and fresh ideals have come to the banking sector but instead they are worst, spoilers and vampires.
LESSONS AND SUGGESSTIONS
- Thank God CBN has woken up to live to their expectation by this present CBN governor.
- Is good, CBN stand up and put all regulatory bodies like strict yearly audit, correct annual reports, and effective risk management on grounds in banks.
- After the bank’s annual reports, CBN should always scrutinize it before the banks give out either their so called “all is well” dividends or bonuses.
- The ongoing CBN probe should continue and more culprits fired e.g. irresponsible Aig and Herbert Wigwe of Access bank Plc with N16.2 billion “kangaroo loan” obtain with positions. And as a young entrepreneur, experienced or young unemployed graduates even with either Bill Gates or Warren Buffet brilliant ideas, you do not stand the chance of obtaining loans of production in Nigeria after reconsolidation in the sector because of personality problem rather than brilliant ideals.
- The irresponsible acts of the CEO’s will surely led to job lose in the banking sector.
- I believe there are many Nigerian brilliant personnel’s got into these banks as a result of brain gain from good universities both England and USA in management level s talking big everyday in CNBC when analyzing, WHERE UNA DEY NOW?
- There should be transparence in both in CBN and the banks concerning information dispersing in the sector, going forward.
- (CBN) has a major blame for the misconduct and current crisis in the banking arising from ongoing special examinations which has resulted to the sacking of the executives of five banks and called on the apex bank to investigate itself. Under the umbrella of Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI), labour specifically asked the CBN to investigate the auditors being sent to the banks to look into their accounts who after spending close to six months in the banks would give the banks clean bill of health

- Injection of fresh capital to the affected banks: This is to allow the banks continue normal operation without loosing market share due to capital inadequacy or a perceived loss of confidence.

- Making cash available in all branches of CBN to meet all withdrawal requests, honouring all cheques issued on funded accounts and asking State and MDAs to leave deposits unmoved. By this action, the CBN envisaged that there may be depositor flight to safety. Again, these provisions are meant to accommodate a possible run on the banks.

- Soliciting the support of security agents in the recovery efforts of delinquent debtors: This is another measure aimed at assuring depositors and investors of the safety of their monies. By enhancing the debt recovery drive of the banks, the Federal Government is keeping to its promise of not allowing any bank to fail. The recovery of the debts will boost the banks’ liquidity and ultimately, profitability.

- Appointment of a new Deputy Governor in charge of Financial Surveillance Services: The appointment of Dr. Kingsley Moghalu, a risk management specialist based in Switzerland as the new Deputy Governor (Financial Surveillance Services) will add more teeth to the ongoing reform and strengthening of the regulatory capacity of the CBN. With his wide experience in Nigeria and abroad, Moghalu will be able to ensure the implementation of proper risk management policies and full disclosure by banks.

- Evident collaboration with NSE and SEC to guard against adverse trading of these (listed) banks’ shares. Public statements by the CBN have revealed support for the defensive actions taken by Capital Market authorities in suspending price movement and trading in the stock of the banks.

In the final analysis, we believe the measures are adequate to cushion whatever negative impact this action might have on the monetary system. The CBN has quite boldly moved to assure that depositors’ monies remain safe. When the dust settles, we are of the opinion that the pre-emptive actions will be correctly lauded. We also feel that in the short-to-medium term, the new managers will be able to turn around these significantly-sized banking firms and aid the CBN’s stated plans to exit its forced investment in private concerns. However, the short term will see remarkable movement in capital market activity as banks – which account for 51% of total market value, and which, crucially, rose to 58% of total value during the upsurge that led to 2009’s value high of early June - are priced in accordance to the shocks.

In the longer term, there will be significant curbs in lending activities amongst banks and this (coupled with extant Federal Government policy prevarication) will slow economic growth. On the other hand, remarkable opportunities exists for value investors who will take advantage of “distressed” prices and wait out the short-term turmoil for longer-term profits. We also expect some asset-swapping of stocks to bring price appreciation to shares in Food & Beverages, Breweries, Real Estate and the like. On the Primary Market side, we think there will be renewed appetite for bond issuances by well-regarded (or rated) companies and states.

BY ALEX UMUKORO- BANKER