Challenge of banking sector intervention, by AMCON, CBN, others

FROM the inception of the intervention in the banking sector till now, decisions bordering on management of the bridged banks and strategies to effectively return them to profitability have been challenging and an ugly trend that no one would wish the country again.

  This was the unanimous submission of the Asset Management Company of Nigeria (AMCON), Central Bank of Nigeria (CBN) and the management of the two bridged banks- Enterprise Bank Limited and Mainstreet Bank, at the formal handover to the new owners- Heritage Bank and Skye Bank Plc.

  The event also marked the official closure of the divestment processes by AMCON in the two banks, which started one year ago.

  The Chairman of AMCON, Alhaji Aliyu Kola Belgore, who recalled the developments that led to the intervention in financial institutions, affirmed that nursing distressed banks back to full operations is not an easy experience, even as he presented awards to the former management of the two acquired banks in recognition of their contributions to ensuring that the lenders were revived.

  Belgore, while presenting the award, noted that both institutions posted profit in excess of N13 billion cumulatively, for the financial year ended December, 2014, adding that it was the management’s prudence that made it possible for the banks to be stabilised now.

  The Governor of CBN, Godwin Emefiele, at the event, said that the onset of the financial crisis was a difficult phase in the history of banking in Nigeria and has remained challenging till now.

  According to him, toxic assets hallmarked banking operations, leading to the crisis that rocked the industry and eventually, engulfed the three nationalised banks.

  “We are happy that the intervention has resulted to good things today despite the difficulty. We thank everyone that has supported in all the processes to get these banks back to operations. But what has happened is not what anyone would wish to happen again,” he said.

  For the former Managing Director of Enterprise Bank, Mallam Ahmed Kuru, the success was that right from the onset of their appointment, they were aware that the bank would be divested from by AMCON, which would signal the end of their appointment, but only if it is stabilised and returned to profitability.

  According to him, the management team’s focus on implementing the objectives of their appointment and avoid associated damages in divestment processes, if not properly done, was the motivating factor right from the beginning.

  But the Chief Executive Officer of AMCON, Mustapha Chike-Obi, admitted that the conclusion of the divestment processes in the two banks has actually lessened workload from the bulk on his table, as he would now focus on another direction.

  “I am not saying it is over, the challenge is still on. We still have over 13,000 accounts and debtors to pursue from these banks. We are only relieved to a certain degree, but I am happy we have made progress. The next phase is Keystone Bank,” he said.

  The Managing Director of Heritage Bank Limited, Ifie Sekibo, assured that he would harness the strength of Enterprise Bank to align with the core values of Heritage Bank, which is based on consistent innovation.

  Sekibo, who also pledged not to disappoint stakeholders, said he was optimistic on getting positive results by the end of 2015 financial year.

  Also speaking at the occasion, Group Managing Director of Skye Bank Plc, owners of Mainstreet Bank, Timothy Oguntayo, said the bank saw value and synergies in the acquired bank and promised to harness and optimize the value.

Oguntayo thanked the Board of AMCON, CBN and the Securities and Exchange Commission for conducting a transparent process that led to the selection of the bid winners for the bridged banks and for granting all the required clearance and approvals that paved the way for the acquisition and eventual take-over.

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