Court orders Akingbola to return N164 billion to Access Bank

A High Court in London has found the former chief executive officer of Intercontinental Bank, Erastus Akingbola guilty of misappropriating the bank’s funds and diverting the money for his personal use.

Delivering the judgement in a fraud lawsuit filed by Access Bank  against Mr Akingbola, presiding judge Michael Burton ruled comprehensively in favour of the bank in respect of all aspects of its claims against the defendant.

In his ruling, Judge Burton said Mr Akingbola is responsible for directing the bank to buy its own shares at a loss of about N145 billion, siphoning money to companies controlled by him or his family and using Intercontinental bank’s funds to buy real estate in the U.K.

According to the judgment, Mr Akingbola wrongfully caused the bank to acquire 3.7 billion of its own shares between 2007 and 2009, and that he directed about 68 million pounds to a group of companies in which he had an interest in order to help them pay off “substantial debts”.

Intercontinental Bank one of eight lenders bailed out by the Central Bank of Nigeria (CBN) in 2009 after a debt crisis caused in part by loans to speculators in equities was later acquired by Access Bank.

The CBN had asked the U.K. to extradite Mr Akingbola after the bailout, though he later returned voluntarily to Nigeria in July 2010 to face the criminal case.

A trial in that matter is still ongoing.

Judgement delivered by Justice Michael Burton on the case: Access Bank Plc vs Erastus Bankole Oladipo Akingbola.

Excess crude reserve falls by 1.4% to $36.4 billion

The Excess crude reserve fell 1.4 per cent month-on-month to $36.40 billion at July 25, from $36.93 billion a month before, hit by falling oil prices and strong dollar demand, latest figures from the Central bank of Nigeria (CBN) showed on Tuesday.

The Foreign reserves stood at $36.71 billion at the end of June, higher from $33.45 billion a year before.

AMCON boss says capital market probe report is sloppy

The Managing Director of the Asset Management Company of Nigeria (AMCON), Mustafa Chike-Obi on Thursday said that the report presented to the House of Representatives by the Chairman of the ad-hoc committee that probed the near collapse of the Nigerian capital market is “extremely ill done” and “extremely sloppy”.

Mr Chike-Obi, who disclosed this while responding to questions on Channels Television’s breakfast show, Sunrise Daily, said he disagree with most of the observations the committee listed in the report.

He said: “For example he (the chairman of the probe committee, Ibrahim Tukur El-Sudi) said that AMCON is a time-bomb waiting to happen. This he concludes after one hour interaction with AMCON MD. We’ve had visits from the IMF (International Monetary Fund) to look into the AMCON module. I spent eight hours with them in Abuja and I was on the phone with them for an additional eight hours when they went back to Washington, asking me questions, details of what we are doing. And in their report about Nigeria they cited AMCON as one of the good things Nigeria has done.”

CBN leaves interest rate at 12 percent, moves to support naira

The Central Bank of Nigeria (CBN) left its benchmark interest rate on hold at 12 percent on Tuesday as expected but took measures to tighten liquidity to support the weakening local naira currency.

The CBN’s Monetary Policy Committee (MPC) chose to raise banks’ cash reserve requirement to 12 percent from 8 percent and reduce net open foreign exchange positions to one percent from three percent to support the naira.

Eleven analysts polled by Reuters last week had expected the MPC to keep its benchmark rate unchanged for a fifth meeting running.

The naira has been hit by a fall in the price of oil, the country’s main export, and global risk aversion and has weakened by almost 3 percent against the dollar since April. The naira closed at N160.7 against the U.S. dollar on Tuesday, outside the CBN’s N150-N160 target trading band.
Currency weakness is aggravating inflation as the country imports 80 percent of what it consumes.

Consumer inflation rose to 12.9 percent year-on-year in June, up from 12.7 percent in May. The CBN expects it to peak around 14 percent later this year.

The CBN Governor Lamido Sanusi said on Tuesday there were serious risks to growth in Nigeria due to weaker global economic growth, lower oil output, a worsening security environment and high government spending.

Mr Sanusi also said Nigeria was unprepared for a potential oil price slump because government was spending the country’s savings, which are stored in the excess crude account.

Nigeria’s economy grew 6.17 percent in the first quarter this year, down from 7.68 percent in the fourth quarter last year. The economy is projected to grow at 6.5 percent this year, down from 7.4 percent in 2011.

The CBN has kept rates on hold since November, after six successive hikes last year, including a 275 basis point rise in October to 12 percent, to ward off speculation on the naira. The naira fell 4.5 percent against the dollar last year.

REUTERS

Funke Osibodu to step down as Union Bank’s MD

The Group Managing Director of Union Bank of Nigeria PLC, Mrs. Funke Osibodu, is set to step down after four years at the helm of affairs.

The bank’s core investor, Union Global partners, is currently reorganizing the board and management of the lender.

According to sources at the Central Bank of Nigeria (CBN), Mrs Osibodu would be replaced by Mr. Emeka Emuwa, who is currently the Managing Director of Citibank Nigeria Limited.

Four executive directors that were appointed with Mrs Osibosu will also take their leave, while the new CEO, subject to regulatory approval, will come along with a new team.

The outgoing CEO was appointed on August the 14th, 2009 following the CBN’s intervention in the nation’s banking sector.

Mrs Osibodu is the only remaining Managing Director of the eight bank CEO’s that were appointed by the CBN following the overhaul.

Consumer Inflation rises to 12.9 percent

Nigeria’s Consumer Price Inflation for the month of June rose marginally by 0.2 percent to 12.9 percent on persistent increase in the prices of some farm produce and an increase in electricity tariff.

The vibrant Bodija Market before the violence.

Statistics from the National Bureau of Statistics on Wednesday showed consumer price inflation rose from 12.7 percent in May, while food price inflation eased to 12 percent.

Core inflation, which excludes volatile agricultural produce, remained high, rising to 15.2 percent from 14.9 percent in May.

Analysts expect the Central Bank of Nigeria (CBN) to hold interest rates steady at 12 percent as it holds its Monetary Policy Committee meeting next week since the regulator wants consumer price inflation in single digits even though it expects headline figure to peak at around 14 percent later this year.

Islamic Banking: Lawyer speaks on his bitter/sweet victory over CBN

Godwin Sunday Ugboji, the Lawyer, who instituted a suit challenging the Central Bank of Nigeria (CBN)’s move to establish Islamic banking system in Nigeria, said that the apex bank does not have the constitutional backing to establish such system.

A Federal High Court sitting in Abuja had last month declared the non-interest financial institution operating under the principles of Islamic jurisprudence as illegal and unconstitutional.

Delivering judgement, in the suit filed by Mr Ugboji, challenging the licence issued to Jaiz Bank by the CBN, Justice Gabriel Kolawole, held that had it not been that the plaintiff lacked the locus standi to institute the action, he would have nullified the licence issued to the Jaiz International Bank Plc to carry out Islamic banking in the country.

“There are no provisions in the CBN Act and the banks provided for in the Banks and other Financial Institutions Act (BOFIA) that empowers the CBN Governor, Sanusi Lamido Sanusi, to issue license for non-interest financial institution to operate under the principles of Islamic jurisprudence without the approval of the Head of State through the Minister of Finance.

Watch video below for more debates on Islamic banking:

Bankers committee to release a new guideline for bank charges

Members of the Bankers Committee have announced plans to release a new guideline for bank charges in the country.

Addressing journalists after the Bankers Committee meeting in Abuja on Tuesday, the Deputy Director in charge of Banking Supervision at the Central Bank of Nigeria (CBN), Mr Markus Zakariya said that the initiative will help address issues of arbitrary charges currently experienced by some customers.

He also noted that the charges will enable the customers to know what charges will be deducted for services offered by respective banks.

Other members of the committee spoke on the need to ensure that the rights of consumers are protected and also bore their minds on the universal banking model as initiated by the apex bank.

AMCON may list nationalised banks

The Asset Management Company of Nigeria (AMCON) on Tuesday said it may list three banks that were nationalised as part of a bailout in 2009, instead of selling them to rivals, as it seeks to determine fair value for the banks.

The Chief Executive Officer of the Asset Management Company of Nigeria (AMCON), Mustapha Chike-Obi

Mustapha Chike-Obi, the chief executive of AMCON, said the AMCON will need to find financial advisers before finalising its decision on whether to list directly or sell to competitors.

“AMCON is appointing an adviser that will evaluate and determine the value of the banks, evaluate all the options available to AMCON,” he said.

“We expect our eventual adviser to consider this (listing) among other options,” Chike-Obi said. He said in April that all three rescued banks were now profitable.

Previously, AMCON said that more than 20 firms — banks and private equity investors — had expressed interest in acquiring the nationalised lenders, but AMCON is keen to have them valued before starting any negotiations.

It may opt to take them public if it can get a better deal.

The Central Bank of Nigeria (CBN) nationalised three banks changed their names to Mainstreet Bank from Afribank; Enterprise Bank from Spring Bank; Keystone Bank from Bank PHB, for failing to find new investors before a recapitalisation deadline.

The CBN then injected N620 billion into nine banks in 2009, judging that they were dangerously undercapitalised.

My colleagues persuaded me to come to office in chieftaincy regalia – Sanusi

The governor of the Central Bank of Nigeria (CBN), Lamido Sanusi on Thursday explained his unusual appearance in the office in chieftaincy attire.

Speaking through the CBN spokesperson, Ugo Okoroafor, Mr Sanusi said that it was his colleagues in the bank that persuaded him to come to the office in his chieftaincy garb

On Friday last week, Mr Sanusi was turbaned the Dan Maje Kano by the Emir of Kano, Ado Bayero.
According to the CBN spokesman, Mr Sanusi was “not on duty” the day he appeared in office in the regalia.

“For the avoidance of doubt we want to use this medium to state that the CBN Governor was on a short break, and was not on duty on the said day.

“Malam Sanusi flew into Abuja after the ceremony and when staff got wind of his presence they persuaded him to pass through the office so that they could see the new Dan Maje.”

The CBN governor on Wednesday caused a commotion at the apex bank’s headquarters in Abuja when he appeared in his traditional chieftaincy attire.

Members of staff ran for dear life when the usual smart looking governor stormed the office in a long regalia, with face almost covered, hardly before they could recognize their boss.

Sanusi resumes office with chieftancy regalia

The Central Bank Governor, Lamido Sanusi, on Wednesday caused a commotion at the apex bank’s headquarters in Abuja when he appeared in his traditional chieftaincy attire.

Members of staff ran for dear life when the usual smart looking  governor stormed the office in a long regalia, with face almost covered, hardly before  they  could recognize their boss.

It was reported last Sunday in a local media that Mr Sanusi was installed as the Dan Majen of Kano by the Emir of Kano Ado Bayero on Saturday.

Mr Sanusi who had been mourning the death of his staff who died in the ill-fated Dana plane that crashed in Lagos state had gone to Kano on Saturday for the installation from where he had attended another event in Abuja on Wednesday, before breezing into the Apex Bank, probably to check one or two things before leaving.

The bank had since the Dana plane crash been in a mourning mood as it lost eight of its staff in the crash.

Don’t void CBN’s autonomy, IMF advices National Assembly

The Country Director of the International Monetary Fund (IMF), Scott Rogers on Thursday faulted the call by members of the National Assembly for the removal of the autonomy of the Central Bank.

The Country Director of the International Monetary Fund, Scott Rogers

Mr Scott, who spoke during the presentation of the IMF’s report on sub Saharan Africa in Abuja, said that the sustenance of financial system stable in the country will be truncated if the institution is not allowed to function independently.

“Without an independent Central Bank, you do not have an independent monetary policy,” he said.

Mr Scott said it was primarily because the CBN was able to tighten monetary policies that Nigeria’s reserves are raising again.

“It’s important that the Central Bank has the autonomy to hire the people they need, to remunerate them competitively, to be able to undertake the modernization they need to be able to manage payments and financial supervision effectively,” he said.

Mr Scott further said that the CBN should be able to perform its duties without fears of being penalised “because they took an unpleasant decision on interest rate policy or because they decided that they needed to close a bank.”

The IMF representative who suggested the tightening of fiscal policies to control the rise in inflation rate also said that all hands must be on deck to achieve structural reforms in the country.

According to him, the federal government’s petroleum subsidy and the millennium development goal of 2015 may not be achieved owing to the volatility of the oil market and lack of political will.

The immediate past Governor of the CBN, Chukwuma Soludo last weekend also warned against any move that could curtail the autonomy of the CBN as guaranteed by the CBN Act 2007.

According to him, such a move could jeopardize the effectiveness of monetary policy and management of the macro-economic framework in Nigeria.
“The survival of CBN as an institution is at the heart of the survival of the Nigerian economy,” he had declared.

A bill to amend the Act establishing the Central Bank of Nigeria recently passed the first the reading in the Senate while a similar move is on-going in the House of Representatives.

The CBN was embroiled in a controversy with the lawmakers, when it failed to present its budget to the national assembly.

The CBN Act allows it ruin as an independent body without the scrutiny of the national assembly.