Doubts Over Integrity Of CBN Audit Persist

http://www.ngrguardiannews.com/news/article02//indexn2_html?pdate=181009&ptitle=Doubts Over Integrity Of CBN Audit Persist


Apex Bank Doesn't Know How Much 'Sanctioned' Banks Need

Says N200bn Offer Isn't Bailout

New CEOs Asked To Make Requisition

Anxiety Mounts As Oceanic Plans Massive Sack
By Marcel Mbamalu
MORE than two weeks after the sanctioning of additional bank chief executives, the Central Bank of Nigeria (CBN) is yet to release the N200 billion package it promised the affected banks.

The apex bank, however, said yesterday that the money was not a bailout for the banks - Equitorial Trust Bank (ETB), Bank PHB, Wema Bank and Springbank.

Rather, the managing directors of three banks, whose chief executives were recently removed, were asked to analyse the banks' records so as to determine the exact amount of fresh capital to be injected into the banks, and to present the figures to the CBN.

It is expected that the new managing directors would tomorrow convey their requirements, the total sum of which could be higher or lower than the N200 billion announced by the CBN.

Industry watchers say the failure of the CBN to determine the exact size of fresh capital required by the affected banks "has cast doubts on the integrity and transparency of the CBN audit exercise."

Former banker and Managing Consultant, Simeon and Rose Associates, Mr. Cliff Mbagwu, yesterday said the failure of the apex bank to release the funds, weeks after it announced the package, was ironical and contradicted its liquidity claims on the banks.

According to him: "Asking the new managing directors to analyse and determine how much the banks actually needed, after the CBN had announced a stipulated amount, cast doubts on the integrity of the overall audit process."

But explaining the development, the CBN said its decision on the last four banks was different from that of the first five sanctioned some months ago.

In a telephone chat with The Guardian, CBN's spokesman, Mohammed Abdullahi, said the funds would come when the banks demand for it. "As they demand, they get," he said.

"This time around, we did not use the word, 'injected'. We said we are giving them liquidity support. So, if they ask, they get it. That is why injection is different from providing liquidity support," he added.

Meanwhile, sources in some of the first five banks that got N420 billion from the CBN, said the new executive directors were subjecting marketers to unrealistic targets, an issue of worry to regulators before the current intervention by the Sanusi-led CBN.

Certainly, anxiety is reportedly mounting in Oceanic Bank Plc as the new management plans massive sack over what the workers regard as frivolous excuses such as staff indebtedness to the bank and failure to meet unrealistic targets.

A source at the bank said the new leadership of the bank had indicated interest that it "wanted to get rid of some staff through what they called 'saving cost.' This is believed to be a way of cleaning up the bank's economic profile in preparation for certain foreign concerns said to be showing strong influence in acquiring the bank.

The source said the management had, last week, released a memo requesting that all staff "with debt in their account or record" would either be requested to pay up or be advised to leave the bank; and since many of the staff cannot repay such debt, the alternative would be for them to leave the bank."

It was gathered that the new CEOs are in consultation with the CBN Governor, Sanusi Lamido Sanusi and will, by tomorrow, come out with the actual figures to be injected in the troubled banks.

After the second phase of its audit of the 24 banks on October 2, the CBN had raised the red flag on another five banks, three of which were said to be in grave liquidity situation. It thus announced an immediate package of N200 billion to shore up their liquidity.

The action, which was sequel to an earlier intervention in five banks whose chief executives were removed, also saw the exit of three chief executives -Ike Oraekwuotu of ETB, Francis Atuche of Bank PHB and Charles Ojo of Springbank.

The monetary offer was to ensure that the banks were restored from the brink of failure, which was reportedly caused by high ratio of non-performing loans and poor corporate governance practices.

But authoritative sources in some of the affected banks said that contrary to its public position, the CBN had not injected any fund into the banks two weeks after.

The indication emerging is that the apex bank was at a loss regarding the exact size of fresh capital required by the affected banks, a development, which casts doubt on the integrity and transparency of the CBN audit exercise.

It is expected that the new managing directors would tomorrow convey their requirements, the total sum of which could be higher or lower than the N200 billion announced by the CBN.

Reacting to the new stand by the CBN, Mr. Mbagwu queried: "Could that not even mean that the banks may not really need the money? If they (CBN) did an audit and felt that those banks actually needed funds, and several weeks after, the funds are not released (and they are holding another meeting to know how much to release), that could either mean that the audit wasn't properly done or that the banks don't actually need the money after all. If they needed it, the action should have been immediate."

He continued: "The actual amount needed by the so-called troubled banks should have been determined by the auditors that examined the banks.

"They should have been able to know what the shortfall is in each of the areas that caused the problem. They don't need the input of the banks again to determine what is needed."

Mbagwu said the questions to ask are: What are the recommendations of the auditors in terms of what is needed to bring the banks back to life? Are the new managing directors doing another audit to determine the level of needed input by the CBN?

He said with the foregoing indications, the banks' situation is nowhere as grave as the CBN alleged. "It would have immediately provided the banks the funds to survive else they would have run into trouble," he added.

After the first phase of its audit on August 14, the CBN had sacked the five chief executives of Oceanic Bank, Intercontinental Bank, Union Bank, Finbank and Afribank and injected N420 billion into the banks.

But indications later suggested that the banks did not actually need the size and volume of the bailout to stabilise their operations.

According to reports, out of the N420 billion, the banks had barely used N100 billion on the whole, with Oceanic using N50 billion, Intercontinental N32 billion and Union N16 billion.

This, analysts say, could have necessitated the current measure applied by the CBN on the reported health of the recently declared troubled banks.

As it did with the first five banks, the CBN appears to have perfected moves aimed at reassuring foreign investors and correspondent banks of positive liquidity status of the embattled banks.

Checks by The Guardian revealed that the new chief executives of the affected banks had been briefed on proper response to queries concerning the apex bank's intervention.

A statement reportedly sent last Wednesday to officials of the banks reads in part: "Our bank is strong and has enough capital and liquidity. Provision of N200bn by the CBN as liquidity support and long-term loans for the four newly affected banks has enabled them to continue normal business while pursuing recapitalisation plans.

"The Special Examination was undertaken by the CBN. All questions about it should be addressed to their advisers, but the CBN has announced that our bank is strong and has enough capital and liquidity to support itself now and in the future.

"We are continuing to work normally and we have benefited from the successful actions of the CBN to maintain stability in the banking sector.

"The first phase of the process of restoring financial sector stability is complete, with ongoing action to focus on: building capacity within the regulatory regime, improving risk management framework, easing the flow of credit, particularly to the real sector of the economy, improving governance structures and practices in the financial services industry, and improving confidence in the economy in general."

No comment, Still waiting

Drama can never end. The fact still remains that the sacked CEOs were not straight forward bankers

they are all guilty

I pledge to Nigeria my country

To be faithful, loyal and honest.

, ,

So help me God.

Which way Nigeria?

Who owns Guardian?

^haha, I thot so, it is the ibrus right.

naijatoday:

Who owns Guardian?

LOL

vislabraye:

Drama can never end. The fact still remains that the sacked CEOs were not straight forward bankers

The fact rather is that there is no straight forward bank CEO in Nigeria. Yes even amongst the ones that scaled the CBN hurdle. You may want to prove me wrong by naming ANY bank MD in Nigeria that is clean.

the question isnt who owns guardian? rememeber vanguard was the first to leak the planned invasion of banks by CBN in march.no body took it serious.they even talked about islamic bank and sanusi hasnt hidden is plan for such.

am not saying ex-CEOs have done right by issuing loans without collateral but all banks are culprit in these act.

the way CBN auditted some first and allowed others to clean up b4 auditing theirs is questionable.

CBN scared the whole of nigeria and international communities by injecting 420billion but only less 100b was used by the banks.

why wasnt UNITY bank axed? just last year CBN injected 70billion into it and stil CBN claim there isnt fund for them now to operate.where is the 70Billion?(northern agenda?)am not being tribalistic but why was UNITY allowed to go free despite been given 70bilion last year with nothing to show for it and they stil more money now?

why was ETB axed when its non performing loan is just less 40billion and not even an inch close to that of firstbank,access and zenith?

out 8trillion naira loan,only 1trillion are owned by the 8 axed banks,who owns the remaining 7trillion naira loan(FG-3trillion)?

my people many question begging for answers.

in my own opinion,i think CBN should have given the banks some time to recover these laons,axing the CEO isnt the way forward.

a bank in USA (the 99th bank to record such)lost over $3billion dollars to loans last week and the CEO wanst axed by their apex bank

lastly we nigerians should keep our fingers crossed and lets see how the drama goes. i see the whole thing as nollywood film

very soon,we shall see the victors and the losers.

The truth is yet to be said. Those CEO's were handpicked for execution. Tell me which CEO is innocent of corruption. Its all a political thing.

Am sorry for Naija. That senseless CBN Sanusi should return to cow rearing cos he knows NOTHING about banking.

SAnusi only has a Degree in Risk Management and Sharia Law

He has NO knowledge in Banking.

Tell me when it will end!

just incase you dont know.his next agenda is to bring down the dollars(lets pray it favour the poor)

by this time next year $1 - N100. if u doubt what am saying here,pls save this page and remind me in 12months time if naira doest get to that rate.

just last week,he injected $2billion dollars into the economy and that marks the begining. my top notch stockbrokers have been rallyin round to stop this but they havent

temmytanny:

the question isnt who owns guardian? rememeber vanguard was the first to leak the planned invasion of banks by CBN in march.no body took it serious.they even talked about islamic bank and sanusi hasnt hidden is plan for such.

am not saying ex-CEOs have done right by issuing loans without collateral but all banks are culprit in these act.

the way CBN auditted some first and allowed others to clean up b4 auditing theirs is questionable.

CBN scared the whole of nigeria and international communities by injecting 420billion but only less 100b was used by the banks.

why wasnt UNITY bank axed? just last year CBN injected 70billion into it and stil CBN claim there isnt fund for them now to operate.where is the 70Billion?(northern agenda?)am not being tribalistic but why was UNITY allowed to go free despite been given 70bilion last year with nothing to show for it and they stil more money now?

why was ETB axed when its non performing loan is just less 40billion and not even an inch close to that of firstbank,access and zenith?

out 8trillion naira loan,only 1trillion are owned by the 8 axed banks,who owns the remaining 7trillion naira loan(FG-3trillion)?

my people many question begging for answers.

in my own opinion,i think CBN should have given the banks some time to recover these laons,axing the CEO isnt the way forward.

a bank in USA (the 99th bank to record such)lost over $3billion dollars to loans last week and the CEO wanst axed by their apex bank

lastly we nigerians should keep our fingers crossed and lets see how the drama goes. i see the whole thing as nollywood film

very soon,we shall see the victors and the losers.

The answers to many of your questions are out there, but you're too lazy to go find them out. You'd rather they were presented to you in the Vanguard newspapers, preferrably with big cartoons so you can understand.

holy cow!!!

GUARDIAN IS GUARDING/GUIDING IBRU. GOD DEY, COW WEY NO GET TAIL NA GOD DEY DRIVE AM FLY.

CBN,should contiue to sanitize the banking industy,protection of depositors and shareholders money is very important to the economy our country is a cash society.
if we have 10 banks that is very sound in liquidity and coperate governance the better for our econcmy.

There is another news that the CBN Governor will soon investigate the closure of Wonder banks(NOSPETCO, Treasureline, Wealthgate and the rest)

somebody posted the topic in http://www.naijaopinion..com/ and investors are giving responses that seem to give hope.

texazzpete:

The answers to many of your questions are out there, but you're too lazy to go find them out. You'd rather they were presented to you in the Vanguard newspapers, preferrably with big cartoons so you can understand.

mr. BIG MOUTH,why not provide answers to my question.if you do,i would give you chin chin,aproko

Dr Dada:

There is another news that the CBN Governor will soon investigate the closure of Wonder banks(NOSPETCO, Treasureline, Wealthgate and the rest)

somebody posted the topic in http://www.naijaopinion..com/ and investors are giving responses that seem to give hope.

Keep on dreaming.

So the ibrus have taken the fight to their newspaper, the guardian, right?

temmytanny:

the question isnt who owns guardian? rememeber vanguard was the first to leak the planned invasion of banks by CBN in march.no body took it serious.they even talked about islamic bank and sanusi hasnt hidden is plan for such.

am not saying ex-CEOs have done right by issuing loans without collateral but all banks are culprit in these act.

the way CBN auditted some first and allowed others to clean up b4 auditing theirs is questionable.

CBN scared the whole of nigeria and international communities by injecting 420billion but only less 100b was used by the banks.

why wasnt UNITY bank axed? just last year CBN injected 70billion into it and stil CBN claim there isnt fund for them now to operate.where is the 70Billion?(northern agenda?)am not being tribalistic but why was UNITY allowed to go free despite been given 70bilion last year with nothing to show for it and they stil more money now?

why was ETB axed when its non performing loan is just less 40billion and not even an inch close to that of firstbank,access and zenith?

out 8trillion naira loan,only 1trillion are owned by the 8 axed banks,who owns the remaining  7trillion naira loan(FG-3trillion)?

my people many question begging for answers.

in my own opinion,i think CBN should have given the banks some time to recover these laons,axing the CEO isnt the way forward.

a bank in USA (the 99th bank to record such)lost over $3billion dollars to loans last week and the CEO wanst axed by their apex bank

lastly we nigerians should keep our fingers crossed and lets see how the drama goes. i see the whole thing as nollywood film

very soon,we shall see the victors and the losers.

Vanguard was not the only one that received the email of the Northern Agenda story, it was received by other newspapers. The only difference was that Vanguard published the story (even though they made it look as if the did some kind of research).

It funny a lot of this Nigeria newspaper do copy and paste. This very story is similar to what Vanguard had two day ago the only difference is quote from people.

Please provide prove that Unity received N70 billion. How can Soludo give money to Unity bank without the approval of the board of the CBN?

To the person that said Sanusi only has a degree in Risk Management, that is not true he has a degree in Economics not Risk Management.

And is Vanguard and ThisDay not the newspaper that sell bank awards to the highest bidder?

Ms Zee:

The truth is yet to be said. Those CEO's were handpicked for execution. Tell me which CEO is innocent of corruption. Its all a political thing.

Am sorry for Naija. That senseless CBN Sanusi should return to cow rearing cos he knows NOTHING about banking.

SAnusi only has a Degree in Risk Management and Sharia Law

He has NO knowledge in Banking.

Tell me when it will end!

He was the last MD/CEO of First bank, one of the most reliable and stable banks in Nigeria.

naijatoday:

Vanguard was not the only one that received the email of the Northern Agenda story, it was received by other newspapers. The only difference was that Vanguard published the story (even though they made it look as if the did some kind of research).

It funny a lot of this Nigeria newspaper do copy and paste. This very story is similar to what Vanguard had two day ago the only difference is quote from people.

Please provide prove that Unity received N70 billion. How can Soludo give money to Unity bank without the approval of the board of the CBN?

To the person that said Sanusi only has a degree in Risk Management, that is not true he has a degree in Economics not Risk Management.

And is Vanguard and ThisDay not the newspaper that sell bank awards to the highest bidder?

thanks for ur reply to my post on UNITY bank.i may not have proven evidence here cos am not a banker i dont keep news letters in my house.

CBN said it itself when they axed ETB,PHB and co that though UNITY bank is stressed but their problem isnt as a result of non performing but an issue with capital.If you can the report on why these new banks were axed u would see what am saying there.Soludo gave 70 billion to UNITY bank last to run.

am not reporting based on paper say but from close financial analsyt and even a pal in mine in CBN itself.

my brother, all these banks have one problem or the other but politickin made some scale through.

i dont think the report of dollar goin down to 100naira in future is out yet but wait till next one year and see what happens.Mind you i never surpport the wrong doings of these CEOs but my arguement is why dint CBN audit all banks at the same time and sack at the same time.
why gave 400billion when they only needed 100billion?

what did ETB do that Jim ovia of zenith or elumelu of UBA isnt doin?

temmytanny:

thanks for your reply to my post on UNITY bank.i may not have proven evidence here cos am not a banker i dont keep news letters in my house.

CBN said it itself when they axed ETB,PHB and co that though UNITY bank is stressed but their problem isnt as a result of non performing but an issue with capital.If you can the report on why these new banks were axed u would see what am saying there.Soludo gave 70 billion to UNITY bank last to run.

am not reporting based on paper say but from close financial analsyt and even a pal in mine in CBN itself.

my brother, all these banks have one problem or the other but politickin made some scale through.

i dont think the report of dollar goin down to 100naira in future is out yet but wait till next one year and see what happens.Mind you i never surpport the wrong doings of these CEOs but my arguement is why dint CBN audit all banks at the same time and sack at the same time.
why gave 400billion when they only needed 100billion?

what did ETB do that Jim ovia of zenith or elumelu of UBA isnt doin?

Your 1st post said Sanusi is pursuing a Northern Agenda, this one suggests Jim Ovia and Tony Elumelu were unfairly spared by the same Sanusi that is pursuing a northern agenda. I guess you are telling us Elumelu is from kano and Jim Ovia is from Zamfara states. When are we going to stop all these unfair criticism and suspicion? If somebody is not deemed to be supporting a tribe, it must be a religion or a particular geo-political zone being persecuted.

God will neither come down nor send angels to govern this country, it will be human being like you and me. The earlier we stopped this suspicion and hate mindset, the better for the future of this country.

temmytanny:

the question isnt who owns guardian? rememeber vanguard was the first to leak the planned invasion of banks by CBN in march.no body took it serious.they even talked about islamic bank and sanusi hasnt hidden is plan for such.

am not saying ex-CEOs have done right by issuing loans without collateral but all banks are culprit in these act.

the way CBN auditted some first and allowed others to clean up b4 auditing theirs is questionable.

CBN scared the whole of nigeria and international communities by injecting 420billion but only less 100b was used by the banks.

why wasnt UNITY bank axed? just last year CBN injected 70billion into it and stil CBN claim there isnt fund for them now to operate.where is the 70Billion?(northern agenda?)am not being tribalistic but why was UNITY allowed to go free despite been given 70bilion last year with nothing to show for it and they stil more money now?

why was ETB axed when its non performing loan is just less 40billion and not even an inch close to that of firstbank,access and zenith?

out 8trillion naira loan,only 1trillion are owned by the 8 axed banks,who owns the remaining 7trillion naira loan(FG-3trillion)?

my people many question begging for answers.

in my own opinion,i think CBN should have given the banks some time to recover these laons,axing the CEO isnt the way forward.

a bank in USA (the 99th bank to record such)lost over $3billion dollars to loans last week and the CEO wanst axed by their apex bank

lastly we nigerians should keep our fingers crossed and lets see how the drama goes. i see the whole thing as nollywood film

very soon,we shall see the victors and the losers.

Thank God say i don see somebody wey dey reason along the same line as I do. I was opportuned to read BOFIA ACT sometimes ago and saw that the only reason why a CBN Governor can remove the MD of a bank is if the bank is in a grave condition. sanusi said the banks were in a grave condition knowing fully well that is the only way he could remove them, and he removed them. He said the condition was so bad that they needed 420bn but we discovered that the banks used only 100bn or so. That means the banks were not in a grave condition as the IMMAM had said. So what does this mean? Either sanusi is so dull that he could not estimate the amount the bank he audited needed or he was just trying to paint the banks'condition as so bad that they needed 420bn (of course Nigerians and other obsevers were scared). Either way, it means the man is not fit to run the organisation. This country does not need a dullard , oops, or Vindictive fella as our CBN Goverenor.

Like I have been saying before on this respected forum, Sanusi had beef with these people when he was MD first bank. Most of these banks snathed his customers as a result of better customer service. He envied what they had achieved as individuals. He tried to win the customers back, and he could not. So he tried to achieve it through a means of setting target for his staff(of course , an act that is strange to first bankers). The staff found it very strange and prayed for his exit. Ask any first bank staff that has spent a year in first bank, he/she would tell you they had to pray for him to go. They did not like him.
Just think about it, Intercontinental bank that CBN gave less than 100bn as bailout has lost over 300bn deposit to competitors since these saga, (most of them went to first bank) and they are still standing. Likewise oceanic, they lost more than they were given. He is now using CCFE to pursue debtors to gain Nigerians confidence in him.

God help us in this country, we need good willed leaders.

naijatoday:

Vanguard was not the only one that received the email of the Northern Agenda story, it was received by other newspapers. The only difference was that Vanguard published the story (even though they made it look as if the did some kind of research).

It funny a lot of this Nigeria newspaper do copy and paste. This very story is similar to what Vanguard had two day ago the only difference is quote from people.

Please provide prove that Unity received N70 billion. How can Soludo give money to Unity bank without the approval of the board of the CBN?

To the person that said Sanusi only has a degree in Risk Management, that is not true he has a degree in Economics not Risk Management.

And is Vanguard and ThisDay not the newspaper that sell bank awards to the highest bidder?

Sun= Kalu's mouth piece
Independent- Ibori's foot soldier
Guardian =- Guards Ibru
Thisday- sells bank award
Vanguard sells bank award
Ok na only punch and champion remain. lol

Why do we accept anything at all from these newsprints if we feel that they compromised? Or are they only compromised when they do not swing your way?

saworoide:

Your 1st post said Sanusi is pursuing a Northern Agenda, this one suggests Jim Ovia and Tony Elumelu were unfairly spared by the same Sanusi that is pursuing a northern agenda. I guess you are telling us Elumelu is from kano and Jim Ovia is from Zamfara states. When are we going to stop all these unfair criticism and suspicion? If somebody is not deemed to be supporting a tribe, it must be a religion or a particular geo-political zone being persecuted.

God will neither come down nor send angels to govern this country, it will be human being like you and me. The earlier we stopped this suspicion and hate mindset, the better for the future of this country.

Bros, check zenith and UBA board and top management whether no be mallams full there

saworoide:

Your 1st post said Sanusi is pursuing a Northern Agenda, this one suggests Jim Ovia and Tony Elumelu were unfairly spared by the same Sanusi that is pursuing a northern agenda. I guess you are telling us Elumelu is from kano and Jim Ovia is from Zamfara states. When are we going to stop all these unfair criticism and suspicion? If somebody is not deemed to be supporting a tribe, it must be a religion or a particular geo-political zone being persecuted.

God will neither come down nor send angels to govern this country, it will be human being like you and me. The earlier we stopped this suspicion and hate mindset, the better for the future of this country.

i would advice you read my post very well before passing comment or judgement.

the northern agenda i made mention of was with a (?) mark.
pls what agenda is ISLAMIC BANKING?WHY INTRODUCE SUCH IN A BANK IN SOCIETY LIKE OURS WHERE WE HAVE MULTI RELIGOUS SET UP?

all am trying to say is that is he baised with the auditting and i also want u to give me a good reason why all the banks werent auditted at the same time.

why was there delay in the 2nd face of sacking?

why is CBN keep dropping wrong defaulters name?(only to later apologise)

pls pls and pls, i will keep sayin it.some of his actions were okay but some are partial and there are enough evidence for us to see

if not for him,i wouldnt have known that banks give out loans to people with out collateral.

if not for him,i would believe dat very soon cars will run on water

but pls lets try and see what happens at the end.just as peopl say END JUSTIFY THE MEANS

Lets watch the drama,time will tell.

he who has no sin should cast the first stone,
trust nigerians,when this regime passes over we shall hear more tales and the angels of today will become the next devils.
Our politicians are jus too crazy and our mentality is at their mercy.
Men in the corridors of power,

No matter how right SLS can be today, we'l hear the other side very soon.

Lets pray for our dear nation.

This is party time, after the party comes the hang over.
This is what the CBN and the banks are doing now

Well i know that CBN people are really unsincere , See where they have taken us to
Problems everywhere as Banks that are able to pay salaries are now havings issue
was there any need for the Money in the First instance
Well,Sanusi, Your FADA OOO!!!
Your Own go meet u ooo
Na so ego be, Ase oooo!!!