Nigeria: Mofe-Damijo calls for private sector investment in film industry

Mofe-Damijo calls for private sector investment in film industry Please sir, temper justice with mercy – convict pleads Court cases ‘ll not stop rescued banks’ recapitalisation – CBN

LAGOS— The Central Bank of Nigeria, CBN, yesterday, said court cases by shareholders of rescued banks would not affect the recapitalisation programme of the affected banks.

Deputy Governor, Financial System Stability of the CBN, Dr. Kingsley Moghalu, at a lecture delivered to the capital market committee of The Securities and Exchange Commission, SEC, said the apex bank would ensure that all the rescued banks conclude their merger/acquisition arrangement by December 2011.

The rescued banks are Intercontinental Bank Plc, Equitorial Trust Bank Limited, Spring Bank Plc, Union Bank of Nigeria Plc, Bank PHB Plc, Afribank Plc, Finbank Plc and Oceanic Bank International Plc.

According to him, “it is the responsibility of the CBN to promote financial stability as it contributes to a healthy economy and sustainable growth. The CBN discharges the responsibility for promoting a sound and efficient financial system by preserving the soundness of financial institutions and the resilience of the financial system to withstand adverse shocks, thereby preventing confidence in the financial system.”

To this extent, he cautioned, the shareholders who had instituted cases against the CBN for its intervention in the eight rescued banks to stop such case and allow the banks’ board and management to conclude plans for their recapitalisation.

According to him, “There is no where in the world that shareholders partake in a merger./acquisition process of a company, it is the responsibility of the Board and management to enter into negotiations with affected parties and thereafter report to the shareholders who will finally give their consent at an Extra Ordinary General Meeting.

We have no plans to sell the banks, rather we want to ensure that the banks are healthy and prevent systemic disturbances. So it is in the interest of shareholders to stop those court cases and allow its Board to conclude the merger/acquisition as we remain committed to the December deadline.”

While, recalling the incidence that led to the CBN’s intervention on the eight rescued banks, Magholu said, “Available data indicated that the net financial cost of stabilizing the Nigerian financial system sequel to the crisis was estimated at N1,725 billion, which represented 5.85 per cent of Nigeria’s GDP as at end December 2010.

This figure is relatively lower than the financial resolution costs expended in other jurisdictions such as the UK (28.6 per cent of GDP), France (19 per cent of GDP), Spain (14.30 per cent of GDP) and Germany (19.8 per cent of GDP). Meanwhile, the net financial cost of stabilizing the global crisis was estimated at $12 trillion.”

He further explained that the CBN will not manage the rescued banks in perpetuity, as it is doing everything possible to ensure that the banks return to their owners on a clean note.

He said that the apex bank has designed a new model banking model for banks, thereby l reversing the universal banking policy, aimed at restricting commercial banks to core banking business and ring-fencing depositors’ funds from proprietary trading.

He explained that the CBN’s reforms have been able to bring a new mindset to the industry as banks have begun to put in place best practices of corporate governance and risk management.

According to him, “A number of banks have returned to profit making path and improved their balance sheets as, the recent results of their financial statements have shown. Unlike the case of previous banking crises in Nigeria, the banking system remains largely stable. But there is still more to do to bring the banks to a clean note as their safety are guaranteed.”

Anthony-Claret Onwutalobi
Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC and CEO of Portia Web Solutions. Mr. Claret publishes and manages the content on Codewit Word News website and associated websits. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.

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