THURSDAY, 01 JULY 2010  BY MOSES EBOSELE

 

Shareholders of Ecobank Nigeria Plc,  yesterday, urged the Central Bank of Nigeria (CBN) to put in place credit bureau charged with the responsibilities of assisting banks recover their bad loans.The shareholders, who spoke at Ecobank’s yearly general meeting in Lagos, said the bureau should correct the situation where debtors move from one bank to the other to borrow money.

 

Speaking on behalf of the Progressive Shareholders Association of Nigeria, Mr Boniface Okezie, said the CBN adopted the wrong approach in its reform programme.According to Okezie, the poor balance sheet beeing declared by banks in the country is largely occasioned by the pressure mounted on banks to make provisioning for their toxic asset, “which ordinarily should have been allowed to be spread over a period of time”.

 

Making reference to the bank’s result for the year ended 2009, Okezie said: “We need to address the injustice in the banking industry. It is painful that we would attend yearly general meeting without receiving dividend. The CBN caused this.  They should know that we only lost value and not our investment in those banks.”

 

National Coordinator, Independent Shareholders Association of Nigeria, Sir Sunny Nwosu, in his submission, said any reform that continue to devalue investments after almost a year of its operation, need to be revisited as it has, rather than add value to the economy, further set the economy backward.He noted that owners of bank must as a matter of national duty stand up and become proactive about their investment and not allow some people who cannot manage larger entities destroy what people have built over the years in one day.

 

On the banks financial position, Okezie, while commending the bank for not contriving any CBN rules, noted that the bank should as a matter of urgency, watch its growing operational cost, as well as advance loans to investors in the economy, just as this will enable the bank make more profit, which will translate to dividend for shareholders of the bank.Nwosu, who encouraged the bank to come lower in its charges so as to attract customers, noted that the bank must work on its financial position and leverage on its good products to create the necessary confidence among depositors.

 

In his reaction, Chairman of the bank, Olorogun Sonny Kuku, said that the efforts made by the bank to recover its loans were already in top gear with the setting up of a special committee.He said the bank has enlisted the service of five credit bureau agencies to further enrich the credit system of the bank in both the short and long-term period.“Our bank has made significant progress in recovery and we continue to focus aggressively in this respect. To emphasise the importance, we have set up an initiative called Trouble Risk Asset Committee to solely focus on impaired assets. We are to date, pleased with the efforts made,” he said.

 

Kuku said despite the significant challenges, the bank’s gross earnings grew by nine per cent from N55.16 billion recorded in 2008, pointing out that “a loss was however, recorded for the year due to the need to be prudent in making provisions for non-performing loans.”

 

 (Source:Guardian)