By Peter Egwuatu
Ahead of its 2009 Annual General Meeting (AGM), operators and other stakeholders have commended the Oceanic International Bank Plc for writing off bad loans as directed by the Central Bank of Nigeria (CBN).
Reacting to the 2008 results recently released on the floor of the Nigerian Stock Exchange (NSE), Chairman of the Progressive Shareholders Association of Nigeria (PSAN), Mr. Boniface Okezie described the result as fair adding that the proposed bonus will make up for the non-payment dividend. The bank had posted a N53.2 billion Profit Before Tax (PBT) with gross earnings within the period under review increasing by a whopping 151 per cent to N188.22 billion as against the preceding yearâ€™s N74.9 billion.
The bank also set aside some N41 billion to provide for loan loss, a decision that has attracted so much commendations from market operators.
Sir Sunny Nwosu who is also a shareholder of the bank said, â€œThough the bank made good earnings in 2008, the apex bank has asked for full provisioning. Since the provisioning is a regulatory requirement, it has to comply and make the provisions. The proposed bonus of 1 to every 10 sharesÂ is a plus.
Highlighting the benefits of making provisions, he said â€œProvision is not a total loss because we are going to recover the figures provided. When they are recovered, it will turn out to be a blessing as it will add to the profit of the bank.
Group Managing Director of the bank, Dr. Cecilia Ibru had while shedding more lights on the results said the high turnover and profitability are the manifestation of strategies put in place by the management to take the bank to a greater height. Reacting to the financials, foremost economic analyst, Mr. Bismark Rewane saluted the courage of the bank management to report its multi-billion naira charge and provided for it accordingly.
â€œThis is significant. It sets the trail for others to follow without fearâ€, said Rewane, the Chief Executive of the Financial Derivates Company Limited.
In his own comment, former Minister of National Planning, Ambassador Isaac Aluko-Olokun said Oceanic Bank has led the way in total disclosure and providing accordingly for toxic assets which many others are shying away from.
According to him â€œIt is a mark of courage that the banks have decided to bite the bullet and deal with toxic assets and loans in their books once and for all. It also calls for sacrifice and understanding on the part of shareholders because they have all been expecting dividend payment.â€