Wednesday, 01 September 2010  By Enitar Ugwu (Lagos) and Mathias Okwe

 

To ascertain the authenticity of their claims, a combined team of inspectors from the Central Bank of Nigeria (CBN) and the Nigerian Deposit Insurance Corporation (NDIC) are currently making the rounds in banks to verify their (banks) half-year results recently released.

 

Meanwhile, the British High Commissioner to Nigeria, Bob Dewar, yesterday noted the efforts of the current management of the Securities and Exchange Commission (SEC) in Nigeria headed by Arunma Oteh but urged it to completely de-risk the market by purging it of corruption.About a month ago, the banks released their half-year financial reports, which indicated improved performances.

 

According to inside sources in the banks, the regulatory bodies’   officials have been going round the banks for the past three weeks to ascertain the genuineness of the performance claims.The sources told The Guardian that the apex bank’s and NDIC’s officials are paying attention to the loan portfolio structure of the banks.Results released in the last three weeks by five banks have brightened the hope of investors and the public that the financial firms may soon return to the profits era despite the turbulence that have pervaded the industry since 2008.

 

Dewar gave the charge when he met with the management and staff of SEC in Abuja and addressed them on: “Managing markets: Governance and regulation in toady’s context.”He said the need for Nigeria to undertake this major action had become imperative because of her inter- relatedness with other nations of the world hence she has to be on the same page with others.

 

He added: “I would like to commend her (Oteh), and all of you, on your work in recent months. Like financial centres all over the world, Nigeria’s capital markets and banking sector have come under stress and the spotlight in recent times, partly because of local issues relating to market integrity and poor behaviour, partly linked to the impact of the global financial crisis.“Your work is key to rebuilding investors’ confidence in Nigeria. It is important to reform, restructure and rebuild the sector, putting it on a firm footing to go forward, not just for the benefit of the market in Lagos, but for prosperity of Nigeria and Nigerian investors more widely and not for foreign investors because we are in an interconnected world.”

 

On the deepening of the Nigerian capital market, the envoy observed that confidence building was very paramount and this could only be achieved through the execution of good corporate governance aimed at purging the market of corruption.

 

Dewar said: “Your financial banking and regulatory leaders have a range of considerations to address. But I would pick on two key aspects in the Nigerian context. Firstly, your efforts should involve the application of and belief in better corporate governance and better risk management. And that means behaviour of investors and behaviour of regulators combined with a good legal system and consistent application of the rule of law. Insider dealings, share manipulations, excessive risk-taking, connected lending, all these issues had a damaging effect on some banks and the stock market here, affecting millions of investors, system in the financial and banking sectors and the capital market.”

 

Responding, Oteh thanked the High Commissioner for the British Government’s assistance for the reforms in the Nigerian capital market and appealed that Britain did not relent until Nigeria got it right.

 

Source:Guardian