By Peter OBIORA investadvocate

July 20, 2010 18:00 GMT

 

 

The Central Bank of Nigeria (CBN) is trying to amend that portion of Goodwill on the Account Statements of Banks in order to allow for dividend payment in such circumstances.

 

Falalu Bello, Group Managing Director (GMD) of Unity Bank Plc (unitybank) made this affirmation on the Floor of the Nigerian Stock Exchange (NSE) Tuesday July 20 2010 in Lagos Nigeria.

 

In reaction to the payment of dividend to investors in the year 2010 Financial Year End (FYE) of the Bank, Bello confirmed that goodwill is in the books of Unity Bank and that the CBN is trying to amend that portion of the Banks and other Financial Institutions Act (BOFIA); currently with the National Assembly.

 

“I said that paying dividend in the review period is subject to one thing that is if the existing law on goodwill is amended, I am aware that the Central Bank of Nigeria (CBN) is trying to amend the Banks and other Financial Institutions Act (BOFIA) portion of that to allow for the payment of dividend; even when you have goodwill in your books” he said.

 

Bello further affirmed that this is inline with the Nigerian Accounting Standard Board (NASB) policy that states companies can keep goodwill in their books; but should be repaid by losses.

 

“The reason is simple; the Nigerian Accounting Standard Board (NASB) states that you can keep goodwill in your books, so long as it is not repaid by losses. Thus, if this happens, we would pay good dividends to our investors in year 2010” Bello said.