AMID fears of a crisis in the banking industry in Nigeria, the Central Bank of Nigeria (CBN) has invited all Chairmen and
Chief Executive Officers (CEOs) of all the banks for a meeting today in Lagos. And it was gathered the expectations are that decisive policy measures would be unveiled to stem the tide of turbulence currently assailing the nation's
financial institutions.
It was also reported that the inclusion of the chairmen along with the CEOs of the banks was viewed by many yesterday as a sign that a new landmark policy regime, that would signpost direction of money market management in the country, would be enthroned.
The meeting would be the second of its kind, in the annals of the country's financial sector's management. The first time took place in June 2004, when the immediate past CBN governor, Prof. Chukwuma Soludo announced the phenomenal consolidation agenda for the banking sector. It was pointed out tha the turmoil in the institutions came to a head recently with disclosures of huge bad debts, in the respective risk portfolios of the banks.
The
Guardian Newspaper exclusively reported a debt stock of N1.25 trillion being owed the banks by about some high profile individuals and the firms, with a significant percentage of the debts in foreign exchange currency.
As at yesterday the 13 August, 2009, further disclosures have increased the list of such high profile bad debtors to about 50, owing over N3.5 trillion.
Irked by this development, the banks decided to frontally confront the debtors publicly, as exemplified by Intercontinental Bank Plc, Access Bank Plc, Fidelity Bank Plc, among others.
Central Bank Nigeria had opted for full disclosures in this regard, while mandating the banks to make provisions for such debts in their accounts.
So far, over about N124 billion bad loans have been written off by six banks, under the provisioning agenda, with fears that funds of shareholders and customers would be compromised, given the size of the bad debt stock.
An inside source in CBN revealed to The Guardian that the apex bank viewed the unsavoury development with concern, blaming mismanagement for the saga.
The current audit exercise of the banks has even revealed further unprofessional practices among the bankers, which has prompted the CBN governor, Sanusi Lamido Sanusi, to summon the Chairmen and CEOs for the meeting today.
he stated and it was quoted "I will not be surprised if some boards of the banks are dissolved, with some CEOs eased out in the process", the source added. But analysts predicted that today's meeting would go further than board restructuring.
A top banker, who also discussed with The Guardian Newspaper on condition of anonymity, said the actualisation of a hidden agenda was in the offing, and which would bring about a new recapitalisation process, aimed at enlisting new investors, who lost out in the last consolidation exercise of the banks.
It was gathered that "It has been an open secret that some people, from a particular section of the country, felt they were edged out in the consolidation exercise consummated by the Soludo regime.
which was the reason why the provisioning exercise was being promoted, as shareholders' fund would have been significantly depleted.
"Under this main plan, it would be obvious that a new recapitalisation exercise would be necessary to reflate the banks. In the process, new investors would emerge definitely, subsequently upstaging some current board members. We are likely to have a new structure in the banks after today's meeting", the source added in the report.
One of the bank chairman, who also spoke with The Guardian Newspaper, did not, however foresee the meeting upstaging the apples' cart.
"I have got the invitation for (today's) meeting. I know it has to do with the current turmoil rocking the banking sector, especially the high bad debt stock saga of the banks. But I think the CBN merely wants to discuss the way forward with us. I do not see the meeting leading to restructuring of the boards, as factors on the ground cannot be used to blame the directors of the financial institutions at all.
"You know very well that contrary to earlier notion raised, the country was actually not immune to the global meltdown. The saga assailed all economies in the world. It would be more practical for a stimulus package to be initiated for the banks, as other countries have done for their respective financial institutions", the chairman said in his report.
Banks' senior workers have also absolved management of blame from the current crisis rocking the banking sector.
It was reported that thehe workers, under the aegis of Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI), said the government should be decisive in bringing to book, high profile bad debtors, especially those with perceived strong political links.