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Problems With Consolidated Banks: Was Soludo A Failure?

Does That Mean Soludo Was A Failure?

If it took the new Helms man at the CBN only 2 months to uncover the gross deceit in our banks, the efficacy and functionality of Soludo has not only be compromised it has been greatly undermined. His ingenuity which has been at the foreshore of the acclaimed excellence in our financial institution was built on stilt and sand and the reality was a crash that was not only inevitable but a certainty that would have consumed the whole nation in despire and bring down the government.  I think the CBN’s pre-emptive move getting rid of those greedy, bent Bank executives should be seen as exemplary and a first in sub Sahara Africa of the Government carrying out her duty of care to her citizenry. The Government and the board of Directors of the CBN must be commended for this historical feat. 

I think one of the main problem Soludo had was he (Souldo ) was not a banker he was an Economics Lecturer from UNN Nsukka. The post of the Governor of CBN of Nigeria was not only an overwhelming proposition for Soludo, considering the calibre of people in banking it was a case of hypnotic admiration of the Bank executives like Jim Ovia, Eratus Akingbola, Madame Ibru e.t.c   These are individuals of obscene wealth and power in their organisations and will intimidate even the most discerning person. Soludo was like a kid in candy shop, he was hoodwinked by these individuals they called the shot throughout his tenure.

Sanusi on the other hand , knew these guys where just putting up appearance and cooking the books, he was a seasoned banker with a strong emphasis on risk management, he knew all the tricks in the book. He also knew the money been splashed around by these bank executives were not profits the bank made but the share-holders equity. Obliviously the chicken came home to roost on Friday when it was revealed the extent of exposure that some of the banks have let themselves into. He even used the dreaded word Insolvency when describing the dire state of one of the supposed high flying banks.

When Chief executives of firms, company’s or Government departments are change you will expect minor window dressings, but when you have a major shift in policy, a clampdown, or announcement it simply means only one thing the past Chief executive has either failed in its totality or does not have a clue what he is doing I believe it is both the former and the latter.

One good thing positive or should I say negative that came out of all these saga is that the only people who are star-struck and hood-winked are the Nigeria masses at the tremendous wealth soludo has acquired for himself  within the last 8 years not bad for a former lecturer from UNN.

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While I think that Soludo should be questioned if need be, But you've got the bank MDs, the bank debtors, and as been emerging of late, the Federal and state governments ( which if you are conversant enough, posses the ugly habit of owing private businesses without recourse) which is a huge factor in most of these debts. Last time I checked the FG was connected to 40% of these debts.

Be patient my friend, a lot of light still needs to be shed before bringing Soludo into it.

By the way I want to hear from you personally if you find any of the events in the Nigerian banking sector as unusual.

I think this has been an will still be the general practice for years to come.

A bank is not a public institution like NNPC, Nitel etc A bank is a private company which engages in various levels of risks as far as it is deemed as acceptable by the board of directors.

I want to know if you are educated enough on the issues you and a lot of seemingly ignorant people are talking about.

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It is amazing 46% people wants EFCC to question Mr Soludo and 51% don’t. But yet 78% says Soludo’s Stewardship as the helms man of the CBN was not a failure. Those 2 figures don’t reflect the true position of things.

Is it a case that a lot of people have not had the time to change their initial stance in the light of more revelation that Soludo was not only deeply involved in the bad debt scandal rocking the financial sector but issues of conflict of interest has also arisen as the boss of a regulatory body is seen to borrow from the institution he is supposed to regulate.

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pity you. You are insulting someone online, you haven't figured out how much the person has achieved. You better learn to say yessir to me. Calling me plagiarizer and running your mouth.

Despite all this you are using spurious logic to support your arguments, and like most nigerians, using extremely supercilious language to buttress your point. I am just advising you to be less wordy and flamboyant when writing, because the purpose of writing is conveying your meaning immediately. To show you, i dont plagiarize, let me write a little ditty for you:

Mr Know all is an , who lived in the house of idiots and served in the house of . He worked as an , drove to his job as an . Infact he is an . .

Ok now applaud my brilliance. I have successfully called you an without using very verbose grammar. .

Report to 

A simple word of advise for you Mr foul language it is evident that going on the internet and trading insults is one of your favourite past time, I will not start now nor descent to that level of childish immaturity. You almost if not de-rail the thread by your incivility and insensitivity, in a time and hour,  our dear country needs positive contribution from supposedly enlightened expat,  you  decide to show and remind them that some expats are even a bigger than those running the country, knowing that it is common and established knowledge that our leaders come on to the Internet not only to gain, formulate and introduce new government initiative but to learn about how things are done in other climes.

Your antics and language is not only un-aspiring it is bad for the younger members of our community.

I think I made a mistake responding to your comment, normally I don’t respond to such postings because, one has to ask one’s self for how long do one want to continue to trade what can only be described as an uneventful, unproductive and a demeaning way of communicating. Since I am not skilled in the dark art of insulting and abusing people on the net, I can only submit to your superior prowess in it, knowing fully well our parts will not cross again.

If for any reason you answer any of my future postings as you did with your opening statement I will not only ignore it  in its totality I would also view it as something that has to be overlooked and seen as the ranting of a mad, bored and frustrated man.

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I pity you. You are insulting someone online, you haven't figured out how much the person has achieved. You better learn to say yessir to me. Calling me plagiarizer and running your mouth.

Despite all this you are using spurious logic to support your arguments, and like most nigerians, using extremely supercilious language to buttress your point. I am just advising you to be less wordy and flamboyant when writing, because the purpose of writing is conveying your meaning immediately. To show you, i dont plagiarize, let me write a little ditty for you:

Mr Know all is an , who lived in the house of idiots and served in the house of . He worked as an , drove to his job as an . Infact he is an . .

Ok now applaud my brilliance. I have successfully called you an without using very verbose grammar. .

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a word v a phrase

is no more a word in english it is now a phrase, who are u to criticise my writing style.

the sarrengenti for your information is a huge spanse of savannah within the rift valley ecosystem in east africa strecting from northern kenya to the borders of southern Tanzania and then into malawi, to paraphase my write up is an unnessceery gesture thank you.

I know your type master plagarist write your own original article and let us read it.

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By the way mate your post was riddled with shitty grammar, I have helped you perform some corrections. Also stop using a lot of lofty words, be simple and concise it makes life easier:

To use such a phrase as displayed above as the opening gambit to an argument shows the depth of your intellect, equating your IQ with humans  will be a disservice to the wild animals roaming the kenyan wild. It is apparent that the animalistic instinct in man that was hitherto in extinction for centuries is quite intact in your mind. I just hope that the culture, courtesy, and civility of the host nation you are living at will rub on you with time. You can beg to differ but to call people names is uncalled for.

Also read the irony in your statement--you go on a name calling spree while admonishing me for s smaller case of name calling. Also by the way everything you used as an insult could be paraphrased into just one phrase 'You are a beast of no nation." Stop being overly wordy. Man by the way learn how to insult concisely , this is a public forum and it is a requisite skill  .

This is not an essay or grammer contest it is all about communication, if you grasped the message then every other thing is secondary. No human has the perogative  use of the english language it is a language that is evolving, if a mordern english speaker were to write to a 17th century scribe, the latter will be lost he will be convinced that what is written is greek or latin.

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The end of a matter is better than the beginning. Soludo started well but in the end they got him cheap and we are now seeing the reality of the situation. Sanusi has started well as usual but how will his end be?

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Soludo undertook the most courageous step in nigeria's central bank history.Sanusi has started on a good and courageous note as well.Hope he goes far and conclusive.Comparism should be an issue here.Sanusi,s case may just be another bravado that heralds new appointments in this part of the globe.He doesn't seem to have a grasp of the dimension of what has stired up.He either contains it or it consumes him.Na naija we de, vodoo economy holdsway.

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Man my IQ is doing great. From standardized testing I have taken its supposed to be in the top 1-2%. I reiterate "you are an "

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Rome was not built in a day. Neither was it built by one man.

Nigerians should learn to appreciate good things.

Soludo did a good job before he left. Sanusi cannot be a copy of Soludo. There are differences in human reasoning and ideas.

The fact that Sanusi took the decision he took is in no way relevant to the tenure of Soludo.

Soludo did his best and left. We also expect Sanusi to do his best. Soludo and Sanusi are not in competition.

If everyone in Nigeria will put in their best in any work they are doing, Nigeria will be a better place for all of us. And there will be no need for our best Nigerian brains to serve the foreign countries they now call home.

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Sanusi has already failed. His action has damaged and not restored consumer confidence in the banks, instead it will encourage people to withdraw their money.

What he should have done is introduced a deposit guarantee scheme - for example the first 12 million naira in every account is guaranteed even if the banks fail. Anything above that amount you leave there at your own risk. The UK has a similar scheme, that and smart policy making has helped them get through their banking crisis

Sanusi has already promised these banks to foreign investors, hence the speed of his actions. This govt has never moved so fast for anything.

Nigerians were buying shares left right and centre, forgetting that what goes up must come down. Now their share certificates are worthless, they are looking for scapegoats.

Why is the Minister of Finance, Dr. Mansur Muhtar silent on this matter?

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mr know all, you obviously don't know what you are saying, if soludo had not consolidated banks there would be no MD to sack. this thread is not necessary, every person has a role to play.

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sanusi got it all wrong. even if d md r found wantingi don't xpect him 2 make d sack a public knowlege considering d parnic it will generate

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The essence of change in tenures is for different people to come contribute their own quota to the development of the country. Soludo has done his part by attacking the most pressing issues during his time. It is now left for his successor to do more, that does not mean Soludo failed at all.

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Can someone please teach Mr. KnowAll how to insert quotes, so that he doesn't have to type the whole thing in his reply?

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He is not a failure - he had the authority but not the power to do so many things. If you recall Yaradua recalled some of his policies

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cnt say soludo z an outrite failure. before the recapitilasation exercise, banks wer built on shadows. the capital base of most of them wer merely less than a billion naira(£4bn), this is  wat some british banks post as annual PBT!!!. the recapitalisation exercise raised the bar to 25bn(£100m). aldou we havnt gotten der yet(standard chartered's capital base is wel wel ova £1bn), were getn sumwer.IF SOLUDO DINT ENGINEER THE RECAPITALISATION, WE WOULDNT BE CRYING OVA 5 SACKED M.D'S, SOME PPL LL NEARLY COMMIT SUICIDE AFTA THE FALL OF OVA 50 BANKS IN DIS GLOBAL ECONOMIC CRISES.

There is noting but hollow before capitalisation as far as I am concerned,  Nigeria history b4 capitalisation was known existent since the untimely death of democracy in 1983. The country was run by illegitimate people who appointed illegitimate Governors where all kinds of thing under the sun is allowable and possible to compare Soludo’s stewardship to this era in our history will not be fair on Soludo himself. I can remember the Naira been pegged at 80 to 1 to the dollar throughout Abacha’s regime.

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please lets b objective ere. on papa, d facts are these:

*some banks av bn exposed to margin loans(these r loans issued 2 buy stoks)

*The CBN removd the executives in order 2 alow othas manage d 400bn loan granted.

@knowall, u cnt say soludo z an outrite failure. before the recapitilasation exercise, banks wer built on shadows. the capital base of most of them wer merely less than a billion naira(£4bn), this is wat some british banks post as annual PBT!!!. the recapitalisation exercise raised the bar to 25bn(£100m). aldou we havnt gotten der yet(standard chartered's capital base is wel wel ova £1bn), were getn sumwer.IF SOLUDO DINT ENGINEER THE RECAPITALISATION, WE WOULDNT BE CRYING OVA 5 SACKED M.D'S, SOME PPL LL NEARLY COMMIT SUICIDE AFTA THE FALL OF OVA 50 BANKS IN DIS GLOBAL ECONOMIC CRISES.

@ EVRY1, der is indiscipline in d banking sector no doubt, i mean hw wud u xplain the N1trn loan given 2 dangote(ds is jus a point nt d begining of anoda argument). C.E.O's nid 2 b more diligent. dey shud run banks lyk d international org's dat dey r and nt lyk beerparlours. a cleanup 4 bank's mgtmnt is gud, bt it shud b folowd up objectiveli. if naija is goin 4rwrd, we nid well didciplined managers dt knw der onoins(take d likes of T.Boone Pickens and d japanese)

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hmmmmmmm, we must hold every public officer suspect until he/she ends her service to the nation and that service is reevaluated after that officer leaves public service. The case of el-Rufai and Soludo should be an example.

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You know and read "reliably" in the papers that Oceanic just passed an audit and heard "unreliably" from the CBN Governor that Oceanic Bank just failed a stress test/audit.

Please help me understand how and why you chose to believe the reliable newspapers, also maybe you want to tell us who you and what you know. Did you by any chance conduct the audit?

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Yesterday, I listened to one of my friends for 20 minutes analyse banking and policies. He did so well that a mere observer would think he was guru in financial analysis. It was very disgusting because had no points and at best turned the points upside down. Just now every in Nigeria calls people names in the guise of financial/ policy analysis. I thought replying to this post was a waste of time. Maybe I still think so

By not heeding to that inner voice that stop u from posting yesterday, only to be lead by that loud voice that made u post today, has not only exposed your lack of view but it has clearly shown u are someone that regurgitate and panders second hand information as a past time. You lack substance tell your friend to post his views.

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On a final note, Mr. KnowAll, i want to honour you with another name today. By the power conferED on me today by nairalanders, i hereby give you another name, MR. PUBLIC TAP (make u continue to dey run ya mouth on Nigeria Public Servants that have credibly served us well against all odds and yet seems to be in ya own black book).

Did i hear say congratulations to him?

The internet is a good thing, with the stroke of our key boards we will bring down corrupt officials in our country, modern day revolution is not won in the battle field it is won at the stroke of a key on the key boards. The earlier you embrace this technology the better for you because you cannot hold it back it has come to stay.

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Soludo was not a failure. I agree with many posters here, he did a lot, but could he have done more? yes. Let's wait and see what Lamido will do. Just like any institution, banks need more oversight, which has not been tackled yet

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Other CBN Governors before him were seasoned bankers. What was their achievements? Soludo tried his bit to salvage the banking sector from total collapse. Sanusi will equally peform his magic. Let us see how it works out. This attitude of castigating former chief executives on the ground of non pereformance is unhealthy

Those were not proper Governors, they were men under a lot of duress with a gun at their temple, if the Head of state tell them to sleep with their mothers they will gladly do it, to compare Soludo to this “Yes men”, is belittling Soludo.

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Trying to discredit the immediate past CBN Governor on the premise that he was not a banker does not hold water. Other CBN Governors before him were seasoned bankers. What was their achievements? Soludo tried his bit to salvage the banking sector from total collapse. Sanusi will equally peform his magic. Let us see how it works out. This attitude of castigating former chief executives on the ground of non pereformance is unhealthy.

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It has been long since I last contributed on this forum, but I have been faithful in following up on such topics as this. I will like to break my silence now.

I will be a bit bias here, because I'm with a school of thought that Nigeria is still an ongoing experiment,   This is indicated by the fact that no individual is considered without reference to his tribe, godfathers and religion. People seldom get accessed by what their rationale thinking patterns are.

To this topic,  I will like to look at the whole matter "out of a nut shell" and view from the perspective of a layman, how such move translates to food on my table, children’s education, health care and provision of basic amenities. Believe it or not we do not have a president that seems not to have an agenda nor has any focus on any solution to deal with any issue.

In my opinion, I see this as a wrong move at a very wrong time and it does not appear it was well thought through, just like any other policies by this PDP led government.

This event quickly drew my mind back to the era of Babagida when he closed down National Bank for almost the same reasons, reasons yet to be proven and I see we are making the same mistakes here.

There is no how you want to relate to this but we first have to admit that the disposed CEO’s have loyalist with funds in these affected banks, what do we think will happen if they all decide to move their funds –please try and relate this to what happened to the American economy and subsequently the world economy when the Persians started withdrawing their funds from American banks,  what will happen to the innocent investors and customers of these banks when this happens, what will subsequently happened to the employees and their families of these banks and what will be the consequence of these on the economy as a whole. Don't we think that the 400bn will go down the drain. I would have prefered the 400bn be invested into Agriculture, healthcare, infracstructure and power.

What investor would want to bring money to an economy where a faulty political policy has such grave consequences on his/her investment? And how do we grow when even the indigenes do not trust there is enough or any security to his investment. Who then would not rather invest in Ghana or elsewhere that politicians do not have such powers.

I would have almost been forced to think that these were such considerations that made Soludo trying constantly to be having intelligent dialogue with these CEO’s rather than taking such economic suicidal move as we have just witnessed.

It is not a matter of how many books either of the CBN governors read or what their prior experiences where, I have seen an esu su/aro/a jo moderator/governor with little or no education do a better job than either of them.

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So who is the real enemy of this nation now, Soludo, Sanusi, Yar'dau  or you guys fighting each other?

Lets call a spade a spade Soludo is to blame you don’t ignore what is blatantly gross mis-management it is like a football referee not blowing the whistle in what is a clear cut penalty. If a blind man can see it is a penalty then it is penalty, I am afraid Soludo has no leg to stand. No point massaging the truth with unecessary spin.

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www.pdbraide.blogspot.com

Monday, August 17, 2009

Naija Bank Brouhaha

When Nigerians discuss what is wrong with their country (a beloved National pastime) bad leaders are usually manipulated as the main cancer.

If any naive person asks why we choose to accept these bad leaders the answer is simple; we didn’t vote them in so they aren’t accountable to us. They won’t listen. Nothing can change. Only God can save this country.

So we offer support either passively through silence or actively working the “man know man” network to redistribute some survival cash in the green white green jungle. There is even a wily breed that vociferously attacks any leader(even girls scouts) preferably on TV, in widely cc’d emails to potential NGO donors and in the pages of papers for recognition and eventual settlement as consultants to any side with the deepest pockets. We all agree on what we would like but not on how to get there.

What has this got to do with banks? Well everyone is in shock over Sanusi Lamido of the CBN’s (Central Bank of Nigeria) [url=http://cleansing of the commercial banking Aegean stables]cleansing of the commercial banking Aegean stables[/url] where not less than 5 bank CEO’s where sacked over reckless management style that has eroded shareholders funds while actively concealing their weak state over time. Apparently risky investments in the downstream oil and gas sector in a market where oil prices tumbled and Naira value sommersaulted have contributed to the sack of the CEO's. Does CBN have the power to do this? Yes.

My question is why did it take Sanusi Lamido of the CBN to do what shareholders and boards should have done for themselves?

I think we have a peculiar concept of what leadership is. For many Nigerians leadership is simply a position. A position which when attained has little to do with responsibilities or functions. Once divorced from systems or institutions the “Big oga” personality cult is the next logical focus. From our leaders we demand favours, praise sing, eulogize, or envy instead of demanding service and according respect based on exemplary performance and honour.

So if you accept bad leadership because leaders are rigged in through fraudulent elections how do you accept bad leadership in an institution THAT YOU WILLINGLY INVESTED YOUR MONEY IN? I can hear the chorus of “but we didn’t know”. Did you want to know?

It is obvious that the board members either lacked the courage to blow the whistle and or profited from insider deals at the expense of shareholders. The shareholder association leaders must all be scrutinized thoroughly as well.

Let us not delve into why this escaped CBN’s hammer for this long. The point is there is a structure and there are processes within the system that should prevent this sort of corporate fraud from occurring, which will never work if we Nigerians continue to apply our feudal passive notions of leader and follower to business investments.

This hasn’t only happened in Nigeria. People world over have been fooled by slickly presented and economical with the truth financial organizations that are little more than private business funds for an incestuous elite whose greed ignored the principles of prudent investment instead choosing high risk high yield ones.

I agree this is so, but I could not help noticing that our refusal to play active roles in governance structures corporate or otherwise, the culture of blame, refusal to take responsibility for better outcomes and an inability to sustain collective action affect our progress as a Nation in every sector.

In summary let’s turn to some good ole African proverbs. A lizard in Calabar cannot become an alligator in China. What is bad is bad. No amount of awards, CNN ads, Chieftaincy titles, honorary degrees, newspaper inches, conflicting financial ratings, or shameless ethnic conspiracy theories should substitute for un-doctored balance sheets or an answer to the question; what is happening to my money?

Advice to Ms/Mr/Mrs shareholder/depositor

• You have rights. Use them.

• Sue all those 419 foreign financial “thingamajigs” that gave fake ratings to these banks.

• Harass the boards. They owe shareholders with 1 share an explanation as to how this happened.

• Do the same to your shareholder association leaders

• Remember leaders have jobs and it’s part of your job to ensure they do it.

Extra rant,

Banks, wouldnt you rather fund manufacturing and businesses that provide jobs, instead of supporting the self destructive mad irony of the 5th largest producer of crude in the world importing fuel for domestic use?

Extra reading

The Big Rot http://www.234next.com/csp/cms/sites/Next/Home/5444696-146/story.csp

The fall of Erastus Akingbola http://dayocoker.wordpress.com/2009/08/14/the-fall-of-erastus-akingbola/

Saving Depositors

http://www.234next.com/csp/cms/sites/Next/Money/Finance/5444751-147/Saving_depositors_from_flamboyant_bankers.csp?CSPCHD=00000001000036vwi2Yp000000SSLbCKGQ4oGuiGMurGZyvg--

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So who is the real enemy of this nation now, Soludo, Sanusi, Yar'dau or you guys fighting each other?

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I think is still too early to judge if Soludo administration was a failure or not, because it takes time for the impact of any policy to manifest and it doesnt have anything to do with the fact that he's an economist.

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What is presently happening might not attach to wether soludo was effective or not.

wether we like it or not Soludo achieved a lot for this country nigeria. say in the areas of banking, pension scheme or even the stock market.

The removal of the MD's of the five banks is just the begining. out of the ten banks, five MD removed and we ave 11 banks to go. with a bank like oceanic bank and inter mentioned its really a suprise. oceanic bank PLC release their audited financail approved by CBN just last month and there position showed they had bad debt due to margin facilities which is the trend all over the world but still declared PAT of 9bil.Am sorry to say that sanusi is not just in this, cos the bank might ave bad debt aswell as other banks in other countries but there MD's were not removed when the bailout were issued. this action of his will kill the financail sector of this country cos this will cos panic to the heart of depositors and lack of trust in all the banks. I pray this is not a nothern agenda cos if it is , this will ave a bad image on the image of this country and Ya-ardua amnesty plan towards the south - south region.

It also suprises me that youth in this country rejioce over failure like we dont ave a stake atall, we dont even talk with facts. we not illitrate or are we? fact shuld be found in wat we a re sayor sharing cos nobody cares wether u were the first to say it or not (prophet of doom)

BAnks were said to ave liquidity problems and we concluded dat they are going down. it worries me where we are going to if our youth are not empowerd with imformation. we be realistic and sugest the way ahead and not rjoice dat nigerians are going to loose jobs. we ave a future and shuld question every decission our leaders make.

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Professionalism is creeping into our banking sector with what I read in the papers today, that is great news, I hope the NSE or Nigeria Stock Exchange also reforms. People like Dopkesi should not be allowed to run public quoted companies. We wait in eagerness for reforms in that sector, it would mean a full blood transfusion of the entire Financial sector.

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this is such a straitfrwrd issue, dt we dnt nid 2 hassl about. if sanusi was unfair to the C.E.O's(i.e they had capital of ova 1trlln and wer given 70bn), d courts r still alive. i feel wat the sector nids is more professionalism. u cant blame soludo outritly, coruption in banking happens evrywer(take the AIG's example for instance), bt the regulators jus have 2 b mor tightfisted. this is a corupt world, n wat we nid r disciplined ppl who are ready to take over. friday's case, is not an issue of soludo, its a moral issue of discipline

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i wonder what you want to achieve by this thread. but be that as it may, soludo was a grand success and i wonder where we would have been in terms of healthy banking system without him.

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know all

funny aka name!

I will make a note on what u said so far. my contribution will come at the end of the current governors tenure. because from ur submission its what a successor does that scores a predecessor's.

thanks for ur empty banter.

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We should also remember that what was changed was the management team (CEOs and Executive Directors + CFO) and not the entire board of directors or chairmen. So most definitely, while Akingbola has been knocked off his saddle since CBN would not trust him to manage their money, he still has his equity intact but diminished to the extent of CBNs bail-out money. That same impact would be felt by everyone who has shares in any of the five banks and the more banks that may join them. And while CBN has automatically become a part of the board of those banks, it does not have a power of veto!

So simply, assuming an Akingbola or Ibru owned about 10% of their banks and CBN has now shored up their capital by say 40% to keep them solvent and in business, it means that initial 10% equity is now only worth about 6% or less (and same would have happened to the holding of all the shareholders of the bank including you and myself). The bank CEOs while being high profile overlooked the most important aspect of their banks (and jobs) - Risk Management! It was sheer recklessness (pitiable though) on their part.

Do you still remember how NNPC lent money to AP and AP could not repay and the debt was converted to equity and ultimately sold to Okocha, then Jimoh Buraimoh, and now Otedola. This scenario would play out if the former owner-managers cannot get enough money to buy back their banks or get willing partners to merge with.

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This northern agenda argument is most ludicrous.

@volunteer, thank u 4 simplifying d issue for dem.

@beaf, it's a pity u still continue to call BOFIA a military decree after all d lecture we av given u in d various threads on ds topic. But to spoonfeed u again, it was originally Banking and other financial institutions decree(BOFID) when it came to existence in 1991, but was amended later In 2003 to become an act(BOFIA). All Soludo's powers were also drawn from ds BOFIA but now dat d punitive part is being invoked, you remember it is a 'decree'. How hypocritical can some people be.

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@mex

Great post! Sincerely I see lots of senses

in your contribution. Keep it up.

Soludo has done his job, any man that has

no flaw can continue abusing and lookindg

for his past error.

We are ALL subject to error!

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@naijaking u are a fool. the government is taking over the banks. they have to bring in new management because it is going to inject 400billion naira into the banks and it wants the 400billlion naira to be well managed. once owners of this banks return the money borrowed to it by cbn then their banks will be returned.so there is nothing like northern agenda and the banks are not up for sale.during obj regime cbn governor and minister of finance are not northerners so it is not a new thing. if any bank is up for obj is the only person whom can buy it, out of his power sector loot and he is not a northerner.

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@adigun101

Thank you very much. I cannot agree more.

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To attribute the problems in soludos consolidated banks as a failure has some flaws which I will want to highlight.

1. Soludo on no occassion guaranteed the elimination of problems from the backing sector with banking consolidation but aimed at reducing these problems by making the banks more resilient. Did he fail in this aim?

2. Soludo reported to the presidency earlier this year that while there were presently problems with various banks as a result of problems in the underlying Nigerian/global Economy they did not pose any serious problems in  to the wider economy. Can you then say that he did not identify these problems?

3. The only difference between soludo and sanusi is that he sought to go about fixing these problems different manner. He secretly and assessed banks,  shook up the management of these banks as in the cases of WEMA,and spring banks, managed the acquisition of weaker banks by stronger performing banks, Under Soludo, the CBN gave Oceanic bank N80 billion; Intercontinental bank, N72 billion; Skye Bank, N60 billion; and FinBank, N40 billion to stem the possible failure of these banks. Is that not what sanusi is doing at the moment ?

3. Problems with the global banking institution has been a trend for a couple of years now, did you think Nigeria would remain insulated from this?

4. Do you think its a good idea for a CBN governor to go whistle blowing crashing the Naira and the stock market and denting investor confidence  (which has taken years to build and might take years to recover )in our banking sector?

5. Does all this take away the fact that under soludo, Nigerias banking sector grew from a sub-saharan share of 16% to 48 %?

6. Will you judge soludo or sanusi based on their different management approaches or based on the advancements made by the banking sector?

7. Can you mention any other areas of the Nigerian economy in which these banks operate that can be said to be faring anywhere near as well as the banking sector ?

I am so happy we still have people like @volunteer around.

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Thanks for your 'expert opinion' about banking in Nigeria.

Let's get one thing straight, I, like majority of naija people support and advocate for reliable banking system. Nobody wants to have failed banks in Nigeria.

Note my tick on the dog analogy above, if the bankers, their CEO, and board of directors dispute the solvency of their institution as the reason for government take over, then it must raise the red flag in every well meaning Nigerian.

Do you really want to fill most banking board of directors with people from the Katsina/ Kaduna/ Kano mafia group when the President, Finance Minister, Minister of National Planning, and the CBN governor are all from the same area? If you do, then you would have simply sold out the rest of the nation for political exepediency, foolishness, or corruption.

Until it's proved that these banks were indeed actually insolvent beyond every doubt, everybody needs to remain watchful and skeptical about Sanusi's moves.

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Nigeria is a tribal country,before soludo how many banks do we have,and how many of them are healthy,soludo did magic to the banking sector,if other ministers,governors,etc did one-tenth of what soludo did in their various ministries,states,etc,then we will not be here,we would have gone far,do u know that banks started givig loans to civil servants during the advent of soludo.

@know all

pls leave soludo alone,he has done his bit and he did it so well.Soludo is a first class material and a prof. of economics b4 40.he was named as one of the best top ten economists in the world.

Well as for sanusi ,time will tell.

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the truth is that the past administration of obj was unable to put any institution into place rather he placed individuals in areas of institutions.

efcc, fct, banks, police, judiciary, excutive, elections are some of the areas where democratic govts establish institutions on which the economy and political systems of a country depends but that was not the case in nigeria.

nigeria since 1999 has been under a particular party and as such shld enjoy and display the benefits of 10 yrs but that is not the case here because individuals play strictly to the tone of that who appoints them specifically for the momentary political objectives.

the sins of obj will continue to hunt us until we get someone with a belief on institutionalization of this useless political arrows designed to bring down opositions.

i have never believed that our banks are stable because if they are, they will not be producers of official prostitutes in the name of marketers who do anything possible to meet up with banks inordinate targets.

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I will not even waste my time responding to this person called "Knowall" but I have to point out that he is a complete and an example of why Nigeria is in turmoil today.

Thanx

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I could not have said it better if I tried. You break it down so succintly.

This should clear things up for the morons shouting tribalism: people are entitled to their own opinion not their own facts!

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I think a good number of contributors on this thread suffer from either plain ignorance, ethnic biogotry, stupidity or a combination of those! I don't see an ethnic dimension to the issue at hand; while the 'bail-out' given to the banks would wittle down the equity of the owner-managers, if they can bring in new investors or raise additional funding to the tune of the bail-out, the CBN has promised to revert management to them. How they want to do that, I do not know. What I see happening is further consolidation within the sector. Spring Bank would have topped that list if not with the take-over by PHB.

On some banks passing the CBN audit: what does passing an audit mean? Let me help: If I audit you and you "pass", it simply means that the information provided to me in your (recent) report to me are a true reflection of fact! The issue at hand goes beyond that: what Mrs Ibru did not mention is the fact that Oceanic like all the other banks did not provision for all of their bad loans as required by the CBN (this is why their so-called profits were declared as phantom or paper profits in the first place). While Oceanic passed the CBN audit, providing for the bad loans meant a negative N42 billion in bad loans hitting their balance sheet aside other issues that were initially treated as off-balance sheet. Her cry, while painful even for me, is like a drowning man clutching to a floating straw.

Soludo was the best CBN governor we could have at the time he was governor, and he did turn around the banking sector immensely. Methinks he did compromise towards the end of his tenure by adopting a softer stance towards the banks as he had built close relationships with the bank CEOs. Consequently, rather than bringing down the hammer on the banks, he elected instead to pad them up through the Expanded Discount Window (EDW) with the hope that they'll recover quickly. I do not call that failure (my definition) looking at the quantum of achievement he has behind his name. If Soludo were still the governor, do you think he would wait for the banks to go under? As an advisor in financial services, I was aware Soludo was driving further consolidation in the industry albeit behind the scenes (talk about Spring Bank, Wema);

Sanusi's own approach is to drive an open and forceful consolidation in the industry (mark my words). And I think he is right as well. In terms of what is being achieved, it is no different from what Soludo was driving only that Sanusi instead chose a rather confrontational approach to it and let us hope that this does not erode the confidence of the banking public in the Nigerian banking industry. We should not move away from the facts and the new governor has made that clear, the capital base of the banks have been eroded and they need to capitalise. That is plain English for "banks should bring in new investors" but where is the money? The ultimate objective is for the banks to further consolidate and Sanusi had made that clear before he became governor that we shouldn't have more than 15 banks in Nigeria; remember Soludo's own consolidation programme had the same objective. What I see clearly is a difference in approach to dealing with this issue.

The banks really have messy risk management frameworks and corporate governance frameworks they do not adhere to. Let's remember that Soludo drove all the banks to put in place risk management frameworks including mandating that each bank had an executive director overseeing risk management (pls, check these facts); or how else did Sanusi end up as ED, Risk Management in First Bank in the very first place. I see what has happened as a process within a continuum. While Central/Reserve Bank governors are usually top notch economists but that does not mean we cannot have a governor who is not an economist at Phd level. Having worked with the CBN, I know that there are hoards of senior economists within the staff and board but Sanusi's background as a risk management professional will no doubt serve our needs at this time. I am particularly impressed with the fact that he is able to face up the issue at hand and stand up to the "sacred cows" in the banking industry.

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^Why is it that you govt pitbulls think that being rude and barbaric makes you seem clever? You just look foolish when people are logical and all you can do be childish and immature.

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These Nigerians are quick to attribute everything to tribe. You lot never let fact get in the way of your rants. Number 1: Nigerian banks are well known for declaring phantom figures. They declare numbers that defy calculus, so anybody who puts his/her fate in those figures clearly has no understanding as to how his/her fatherland operates. Number 2: You can pass a CBN audit when the basis of the audit is the declaration you’ve made.

Send their spreadsheets to forensic accountants and you’ll see the illusion. This is what Sanusi has seen. This is the reality. You lot can tap away from the comfort of your bedrooms and moan about the big, bad Hausa agenda, but the fact remains: your banks are Bottom, and they need bailing out. Anybody ever wondered why they run after deposits as forcefully as they do?

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You maybe the one on hard drugs here, for all I know and read from reliable Nigerian newspapers, banks such as Oceanic just recently passed their CBN audit, so before you join this silly talk about insolvency, please check with people in the know.

Igbos say that if you pull off a tick from a dog without showing it him, the dog would think you were just pinching him out of animosity

So, show me an insolvent bank, show me the hurried need to inject a paltry 400billion into private banks so that you can forcefully take them over in the name of the federal government of Yar'dua.

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