2 November 2009
Lagos — THE major shareholders, investors and other stakeholders in the eight troubled banks are making moves to reclaim them, vowing to co-operate with the Central Bank installed managements there.
They also pledged to seek new investors and recapitalise the banks if CBN will accept the proposal.
A top official of the Central Bank who wished anonymity told Vanguard that the Board of Governors of the apex bank "will consider all proposals and do what is best for each of the institutions in question. Usually, this will take shareholders' support and preference into consideration."
At the weekend, one of the major actors in the banking reform told Vanguard through his aide, "It will be a wise thing for government to call other shareholders of banks to work with new investors to recapitalise their banks within the CBN deadline.
"This is no time to point fingers anymore; a good General knows when to retreat. Since some of the 14 banks are worse than those that were punished, equity demands that the banks should be returned to the boards and management.
"The N620 billion CBN has injected into the eight troubled banks should be left with the banks for 18 months due to the disruption it has caused.
"The minimum capital for banks is N25billion. Any bank that after provision for losses has N25bn or can upgrade their capital to N25bn should be allowed to operate at that level.
"The banks should be allowed to raise fresh capital like the other ones are doing now, raising bonds of about N1.4 trillion.
"Alternatively, they should be allowed to work with foreign partners of their choice. This will provide a level playing field for all operators in the banking sector," he added.
Other stakeholders urged President Umaru Yar'Adua to allow shareholders recapitalise their banks. This, they argued, will bring the banking reform to a middle-point conclusion that will garner the support of all.
CBN's Governor, Mr. Lamido Sanusi, had told Vanguard that shareholders in the eight troubled banks "need to understand what we are doing and we are merely being charitable when we talk about shareholders. Look, you have lost your money. If your capital is zero or negative, you no longer have a bank. That is the truth people do not want to hear.
"Somebody says he is speaking on behalf of shareholders. If we publish what we have, they will see; there is no capital, it's been gambled away - that is the truth. But we're trying to have discussions so that the shareholders would still have something," he stressed.
According to Sanusi: "For me, far more important than who owns the bank is that a bank performs its functions and performs the functions well.
"If a Nigerian is going to own a bank and at the end of the day, your money is not safe or if he is going to take your money and deploy that money to areas that would not benefit the economy, I would rather have a foreigner who would build the economy.
"Look, this banking problem may cost us as much as N500bn or N700bn, I do not know yet.
"For me, if there is a foreign institution that is determined to set up shop and promote economic development in Nigeria, I would support it. That was the essence of amending the law to allow for foreign ownership. That is very different from saying I have gone to look for foreigners to buy the troubled banks," he added.
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What has happened to the Banking Industry again in 2009 is a repeated disaster, and the reactions of CBN is commendable and appropriate, to put it mildly. However, I believe the baby and the dirty water should not be thrown away.
Like in any other system, We are in continuous learning. In the current scenario, it is the stakeholders/shareholders who are learning most. To keep them totally off by making them loose all they put in into the Banks is like throwing away the baby away with the dirty water...
I explain with the story of a shrewd Business man in US... His personal assistant in a contract caused the company to loose about 5 million USD. The assistant felt very awkwardly out of place, and offered to resign his position. What did the shrewd Business man say? He said his assistant could not resign because he needed him more then...because, according to his interpretation, "the company has just invested 5 million USD educating the assistant"
In other words, the N620 billion used to bail out the 8 Banks should be seen as training Bill of Nigerian Economic Stakeholders/Shareholders. To sack them is to deny then the application of the training. The next thing will be to recruit fresh 'UNTRAINED' Partners.
If Sanusi Lamido Sanusi is smart at anything, it is in skill in PROPAGANDA. He uses many words to confuse the gullible. He and other Jihadist oppressors are presently pointing fingers elsewhere while parading themselves as apostles of transparency and corporate governance. Meanwhile the looting and stealing go on and are perpetrated, not by the people they are pointing at but by the same Hausa-Fulani corrupt criminal oligarchs. Like Nero of Roman empire, Sanusi Lamido Sanusi is playing fiddle while Nigeria burns.
Let's briefly look at the indices of his success. The entire industry is gripped with fear, disenchantment and panic. The Naira exchange rate which stood at N120 = 1 USD when he came is now 153 = 1USD. Similarly, the Euro exchange was N170 = 1 Euro but now is N223 = 1 Euro. Except for the oil industry, foreign investors stopped coming when he embarked on his present QUIXOTIC adventure. International business transaction is more difficult. Nigerians are not investing in the stock market. Nigerian banks are not lending. Ordinary Nigerians are suffering even more. Retrenchment is ongoing silently in the industry as panic and loss of confidence in the banking system in Nigeria begins to take its toll. The list goes on.
So, after listening to Sanusi Lamido Sanusi's PROPAGANDA please come back here and see if anything has improved. I believe he makes it easier for those who still have any doubts to understand that we have an urgent need to get rid of the Hausa-Fulani criminal Jihadist oppressors - to excise them to their natural country.
excisionist@gmx.com