A story in Nigeria's Vanguard gives the Alliance Bank side of the story, while another in the Sun tells of an influential pastor begging President Olusegun Obasanjo to intercede so that thousands of bank employees will not use their skills in the advance-fee fraud Nigeria is famous for. Both are below the Guardian piece.
The story may mark the end of an intensive effort to save the bank founded by ERHC Energy chairman Sir Emeka Offor, then known as African Express Bank and now as Afex Bank, which has apparently had only limited operations in the past two years but was besieged Tuesday by depositors demanding their money, according to ThisDay Online. Offor may have put upsome $22.7 million at the last minute on Friday, Dec. 30, to no avail.
Afex Bank was forgiven some $84 million in debts to the Central Bank under an industry-wide amnesty declared last year by the CNB, which is reforming the banking sector to create more stable and transparent financial institutions that can anchor the Nigerian economy. Only 25 of some 89n banks survived the ordered consolidation, in which licensed institutions must have at least $25 billion Naira in assets.
Here is the Guardian story:
CBN rejects Alliance Bank group's bid for waiver
By Jane-Francs Ajemba
THE Central Bank of Nigeria (CBN) yesterday foreclosed status review for the eight banks under the Alliance Group, affirming that they are bound for liquidation.
The banks are Fortune Bank, Liberty Bank, Triumph, AFEX, Eagle, Metropolitan Bank, City Express Bank and Gulf Bank.
They had earlier raised hopes of stakeholders that $250 million fresh funds would be injected into the group by their foreign partners.
But the CBN's new spokesman, Mr. Festus Odoko, told reporters in Lagos that since the group did not meet the December 31, 2005 deadline for N25 billion capitalisation, it stands bound for liquidation.
Odoko also disclosed, however, that ACB International Bank Plc is not among the banks under liquidation.
On the Alliance Bank group, he said: "Let's face reality, if a student did badly in a particular examination and now decides to read very well and take that same exam, it is not possible."
Odoko added that depositors in the 13 banks, which failed to meet the target, would receive their deposits from the Nigeria Deposit Insurance Corporation (NDIC) before March this year.
He disclosed that a verification process is currently going on.
At the expiration of the recapitalisation deadline, the CBN named 25 banks as scaling the hurdle. They include United Bank for Africa (UBA), First Bank, Union Bank, Guaranty Trust Bank, Zenith Bank, Intercontinental Bank, Standard Chartered Bank, Oceanic Bank, Access Bank, EcoBank, ETB and Sterling Bank.
Others are: NCIB/Citibank, Fidelity Bank, FCMB Group, Wema Bank Group, IBTC Chartered, Stanbic Bank, Afribank Group, Platinum Habib, Diamond Bank, Unity Bank Group and Spring Bank.
The rest are Skye Bank Group and First Inland Bank.
Twenty-four hours after the 25 banks were named, the members of the Alliance Bank group continued business as usual on Tuesday.
Buoyed by the hope for a reprieve, the helmsmen of the group on Tuesday held a meeting to consider, among others, the accommodation of two other banks that were also yet to meet the target: Trade Bank and Hallmark Bank, both of which had also continued operation.
The three technically active members of the Alliance Bank group conducted their normal banking businesses on Tuesday, especially those still in the Clearing House.
The Guardian learnt that the group had in the early hours of Tuesday, paid N3 billion into the CBN's escrow account, while hoping to pay an extra N3 billion before the close of work that day.
Meanwhile, in Friday's editions of the daily Vanguard, members of the Alliance Bank group told their side of the story, including the efforts of someone identified as a director of Afex bank to put up 3 billion Naira (US$22.7 million) to stave off liquidation. Given the sum of money involved, that director could well have been Sir Emeka Offor.
Here is the Vanguard story from Froday's editions:
Alliance Bank group explains non inclusion in CBN list
By Omoh Gabriel, Business Editor
Posted to the Web: Friday, January 06, 2006
The Alliance Bank group Wednesday in Lagos explained why it was not included in the list of CBN 25 banks that met the minimum capital base and said that its officials were in Abuja to physically present the documentation that denied its inclusion in the list of approved banks by the CBN.
According to the group, “A documentation shortfall, occasioned by the long weekend was responsible for the group’s failure to meet certain basic deadlines." The group assured all its admirers who have been shocked by their apparent non-inclusion in the list of 25 that "work is still in progress in their effort to reduce the pains of liquidation to most Nigerians who are battling to survive from a scorching economic imbalance and spiraling level of poverty”.
The group noted that “the documents, most of which the group lost a mention in the list have been fully addressed and had since reached the apex bank while only one of the major demands is not fully addressed but must be surely fulfilled in the next few hours so that the group can ask to be considered as an outright liquidation of the banks does not do anybody any good”.
The group has a total of N74 billion depositors funds which CBN says “only” represents 6.2 per cent of the total deposit in the industry. The group considers such an amount, higher than the annual budget of most of the states in the country as very big to be wished away. As at today, the group still has about 1,500 work force. The Chairman of the group’s steering committee, Mr Fidelis Tilije, noted that the development belies the efforts the board of managing directors of the group has put in place, but noted that they must go on to fulfil the demands of the apex bank, knowing that their approach is of good intention to the economy.
The Central Bank had asked the owners of the eight banks to recover insider related credits from its directors and have from that source at least N10.5billion as working capital. This is in addition to the group meeting the prescribed minimum capital of N25billion. While the group had raised N25.48billion, it was only able to recover as at Friday a total of N8.5billion. According to sources close to the group, a director in Afex bank was said to have paid the sum of N3billion while another in Fortune bank was also said to have paid in N1.8billion. Other members of the group were said to have recover from their directors various some of money ranging from N300million and above. With this the group had before the long holiday a total of N8.5billion recovered from insider related loans. Also the apex bank had demanded from the group an organisational chart detailing the board members and the top management structure as conditions for granting the group a final approval having given them approval in Principle.
The Alliance Bank group is made up of Fortune Bank, City Express, Metropolitan, Triumph, Eagle, Afex, Liberty, and Gulf Banks. Others are Allstates Trust Bank, Assurance Bank, Societe Generale Bank of Nigeria, Hallmark Bank and African International Bank. Reacting to the CBN release of the list of 25 approved banks, the group hailed the CBN for the great work it has done so far inspite of all the odds but added that it has even stepped up the conclusion of its documentation stage with the CBN.
The group noted that the documents have been delivered even though a part of it had been faxed to the bank last Friday in anticipation that the apex bank had been earlier briefed on the group’s programme and constraints.
It was further explained that “the licences of the eight banks and the organogram had since been sent while the funding part of the demand has received a great boost as inflows are still being received from debtors. The first tranche of the funds paid into CBN escrow accounts was said to have been received while a heavier tranche which may put paid to the liquidity question may be met today”.
The group noted that the “decision to release the list without waiting for the group’s final round-up was understandable as it was merely meant to satisfy the apex bank’s consciousness for positive perception against the looming operational considerations of the banks”.
And here is the piece for the Sun, in which an influential pastor from Lagos calls for mercy:
Clergy man asks Soludo not to liquidate 13 banks
By CHRISTOPHER OJI
Thursday , January 5, 2006
General overseer of Christian Pentecostal Centre International, Oko-Oba, Agege, Lagos, Pastor Adeleke Ekundayo John has appealed to President Olusegun Obasanjo to prevail on the Governor of Central Bank, Professor Charles Soludo to rescind his decision to liquidate the 13 failed banks.
Pastor John wants Obasanjo to think well of the implications of liquidating the banks, adding that the devastating effort would be better imagined than experienced.
He warned that if the banks were finally liquidated, it would spoil the anti-corruption war being waged by President Obasanjo, adding that many of the sacked workers would take to crime.
He said: "think of bankers who know too much of the use of computers. They will only resort to advance fee fraud as there is no other job for them to do.
He said that Professor Charles Soludo should realise that thousands of people would be affected if the banks are to be liquidated.
In his words, "In African setting, one worker may be feeding over 20 mouths. The aged parents are there. The children and extended families are also there. Remember that many children will drop out of school."
He said that rather than liquidate the banks, the CBN should try to assist the distressed ones rather than send their workers into the labour market He warned that God would not be happy if he hears the cry of the innocent ones who would be crying for food.
He appealed to Obasanjo to use his good office to wade into the issue to see that the failed banks are given further time to raise money for consolidation.
He questioned "what happen if the government should assist the 13 banks. It would be glorious and God will bless this country the more. People will also believe that the government was interested in the well being of its people.
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