papa giddy:

i bought 20,000 Units of oceanic bank shares at N29  plus 13,000 brokers commission last year April. if i had know i would have used it to buy a land.  see me now !!!!

the truth is,these banks and everything abt them i.e staff and co have always been `false`.last yr,they posted billions as profit and they are now laying off their workers.they started by paying silly wages even though they hardly made profit.imagine when u have to spend money u dont have-pple`s money.as for the sacked staff,they shld look elsewhere.they shld have known that all that glitters isnt gold.i could have been a victim if not that i listened to my dad who warned me dat the banks were just fronting.

debts pre tax debt
bankphb 439bn
union bank 223bn
finbank 94
springbnk 23bn

saw these on friday.almost all the banks are in huge debt.

desktop:

Can we all now see where the aboki has led us to?
Everything happening now i can bet you he never envisaged. This is just a repeat of the failed banks era.
Soon customers will cease to deal with these banks then what happens?
Total closure, even those who dont make the list will only in a matter of time be exd!

How do you sack ppl cos their accounts are in red?
Is it now against the law to be broke?

God abeg O!

Meldrick:

But is it really wrong to sanitize an industry that was at the verge of collapsing. Don't you think something worse would have happened but for the timely intervention of Lamido. A bank that declared a huge profit last year only to run into a loss worth billions of Naira this year. Doesn't it strike your mind that there were lots of fraudulent and dubious practices. Figures were manufactured to decieve the public and profits were declared on the floors of the Nigerian Stock Exchange. Notable audit firms cheaply sold their integrity and connived with these banks to give them a pass mark. Public offer was made. Students, young graduates, and others who sweated hardly for their money bought these shares only to realize they have been decieved (permit me to use the word duped). Are these bank chiefs or thieves not worse than the robbers on the street. Even the public who bought sshares from them find it difficult getting loans from the banks.

My there friend what is happening is inevitable. If it didn't happen now, it would have happened some day.
My prayer is that God should punish all those at the corridor of power who make life miserable for the masses. God should punish those bank chiefs that have put these bankers out of their jobs and May God provide better jobs for them. Amen

A bank that declared a huge profit last year only to run into a loss worth billions of Naira this year. Doesn't it strike your mind that there were lots of fraudulent and dubious practices

Notable audit firms cheaply sold their integrity and connived with these banks to give them a pass mark.

desktop:

Can we all now see where the aboki has led us to?
Everything happening now i can bet you he never envisaged. This is just a repeat of the failed banks era.
Soon customers will cease to deal with these banks then what happens?
Total closure, even those who dont make the list will only in a matter of time be exd!

How do you sack ppl cos their accounts are in red?
Is it now against the law to be broke?
God abeg O!

Meldrick:

[b]But is it really wrong to sanitize an industry that was at the verge of collapsing. Don't you think something worse would have happened but for the timely intervention of Lamido. A bank that declared a huge profit last year only to run into a loss worth billions of Naira this year. Doesn't it strike your mind that there were lots of fraudulent and dubious practices. Figures were manufactured to decieve the public and profits were declared on the floors of the Nigerian Stock Exchange. Notable audit firms cheaply sold their integrity and connived with these banks to give them a pass mark. Public offer was made. Students, young graduates, and others who sweated hardly for their money bought these shares only to realize they have been decieved (permit me to use the word duped). Are these bank chiefs or thieves not worse than the robbers on the street. Even the public who bought sshares from them find it difficult getting loans from the banks.

My there friend what is happening is inevitable. If it didn't happen now, it would have happened some day.
My prayer is that God should punish all those at the corridor of power who make life miserable for the masses. God should punish those bank chiefs that have put these bankers out of their jobs and May God provide better jobs for them. Amen
[/b]

Your explanation of the current situation is far too simple. The CBN Governor as a position wields tremendous power. That is the reason why you want them to talk little and work behind the curtain. Do you realize some CEO's had been removed under his predecessor with little razzmatazz including at the bank where the current CBN Governor worked as GM before moving to FB as Executive Director? I do not want to impugn his motive but his method leaves considerable number of knowledgeable people scratching their heads for a rationale that the upside outweighs the downside. Even a few of his supporters are no longer at ease.

Now to address your points. One, the industry was not at verge of collapsing. Most of the banks were over-exposed to concentration risk which was serious but did not rise to the point of collapse. The stock price decline caused many assets to be impaired which was a contributory factor. They could have weathered the storm. So the notion it would have been worse had it not been for timely intervention of CBN Governor is at best preposterous. He actually exacerbated the situation with the methods he employed, maybe unintentionally.

Declaring a large profit last year and then large losses this year. This is not a misnomer. The problem here is clear misunderstanding. In a downturn, interest bearing assets tend to migrate down to loss status faster within the prudential guidelines and banks are forced to make 100% provision. So, you can turn from one quarter of profits to another quarter of big losses as customers stop making repayments because of cash crunch. It even becomes more rampant with a total credit squeeze as is prevalent now. So banks are going to make even more provisions. While it is possible that fraudulent practices can cause that but it is equally possible the write has nothing to do with fraudulent practices particularly in the current environment. I would even argue that the case here is assets deteriorating to loss status and hence the banks have to make 100% provision. Maybe you might take time to study the financial statements and see that some of them had fairly good earnings and others even had a positive earnings growth. Let me leave it here for another day.

Notable audit firms sold their integrity and connived with the banks. Is this really the truth? If it were, how come CBN Governor appointed the same "notable audit firms" to be advisers to the same banks in the ongoing reform. Again, my view is that the problem is misunderstanding of the responsibilities of chartered accounting firms.  The auditors give unqualified opinion based on "reasonable assurances" and not based on absolute assurances. The management is ultimately responsible for the fairness of the presentation of the financial statements and not the auditing firms. Unless anyone can prove any case of connivance, i think your statement is inaccurate.

Students, young graduates and others who sweated hard were duped. It is not true. First of all, you did not put your money in a deposit. If you did, the CBN Governor has guaranteed the money. What you did was to make an investment. Every investment is a risk and people make these investments based on their risk appetite. Investments in stock is no different. Stock prices go 'highs' and 'lows', so even though the prices are very low today, it does not mean they would not go up to 10, 20, 30 or 40 naira in the next year or two depending on the particular bank. So the notion that it is a loss is comical. This is called extreme wealth decline and not a total loss unless the bank goes under.    

My there friend what is happening is inevitable. I disagree. There is nothing inevitable about the current situation. In my opinion, it is a case of taking a bad situation and making it worse. A more careful CBN Governor could have achieved the same purpose (sanitizing the rot) with little or no damage to the credibility of the institutions or stripping the institutions bare.

To make a quick comment on the extraordinary losses published by the 8 banks last week. Those losses are not a true reflection of those banks financial position. They were instructed to make 100% provision on substandard and doubtful loans. That meant they were making provisions over and above the existing prudential guidelines while the other 'healthy' banks are left to make 100% provision only on loans that are outright loss. Why should this worry you? Because even the new CEOs appointed by CBN Governor told him that the instruction will damage the trust they have been building over the few months and apparently the CBN Governor agreed, only to call the CEOs several hours after the meeting and insisted they publish the interim F/S. While there are many downsides to this decision, there is a noteworthy upside. The upside is that the banks will return to profitability by early 2010, possibly first or second quarter.

Finally, substantial blame for all these should go to the former bank executives and their board of directors. There was just unnecessary display of wealth, greed, poor corporate governance, low management quality and in some cases, some of them do not have the experience and vision to run and manage the behemoth they are building or built. Really i do not have sympathy for most of them but i'll let the court pronounce them guilty or otherwise.

elowa:

In red means being in debit and not just being broke. Its like giving yourself an unauthorised loan because you are a staff. I was with FirstBank till 2008 and we have it like an unwritten rule, any staff that has his or her account goes into debit will be summoned to face a panel at the head office