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Oceanic Bank restates commitment for turnaround

By Peter Egwuatu
Oceanic Bank International Plc has restated commitment for quick turnaround that will make its shareholders smile for their investments.

The shareholders of the bank have been complaining against the fall in the value of their investment since the Central Bank of Nigeria (CBN) intervened to rescue it from total collapse.

Oceanic Bank was among the seven banks that the CBN took over last August 2009 for lack of corporate governance, misuse of shareholders’s funds, among others.

At the conclusion of a special examination conducted by the Central Bank of Nigeria (CBN) and the Nigerian Deposit Insurance Corporation (NDIC) to assess the health of Oceanic Bank, the banking regulator took a decision to intervene in the affairs of the Bank in order to protect depositors’ funds as part of its policy of safeguarding against the collapse of money centre banks. On August 14, 2009, the Central Bank removed the Bank’s executive management, announced the provision of a 7_year convertible loan of N100 billion for the Bank to meet its maturing obligations and appointed a new management team led by John Aboh with the express mandate to stabilize the Bank and return it to profitability.

Aboh had last week reassured stakeholders that its management will continuously work assiduously to return the bank to profitability as was recorded in the first quarter result recently released on the Nigerian Stock Exchange (NSE).

Oceanic Bank International Plc in its unaudited results for the quarter ended March 31, 2010 has announced Gross Earnings of N28.7billionn and Profit Before Taxation (PBT)of N1.73billion  for the Bank and N30.4billion and N2.56billion, respectively, for the Group. The first quarter 2010 profit, coming after the loss of =N=89billion posted in 2009, effectively signals the Bank’s return to profitability after the CBN intervention in August 2009

Other highlights of the Bank’s results include: Net Interest Margin of 26.3 per cent in first quarter 2010 as against 14.5 per cent in 2009; Operating Expenses down 13 per cent from N18.7billion in first quarter 2009 to N6.24billion  in first quartrer 2010 and Profit After Tax of N1.12billion as against Loss After Tax of N12.5billion in first quarter 2009.

The Bank’s balance sheet witnessed a 2.5 per cent increase in Total Assets from N869.3billion at 31st December 2009 to N890.1billion at the  end of first quarter  2010 and 9 per cent growth in Customer Deposits in first quarter 2010 to close at N595.3 billion. Earnings Per Share for the quarter stood at 5kobo as against a Loss Per Share of 56kobo in first quarter 2009.

Aboh, noted that the results are indicative of growing customer confidence, loyalty, and a vindication of the effectiveness of the recovery strategy put in place by the new management to reposition the Bank.”After overcoming the initial challenges of stabilizing the Bank and restoring customer confidence, we launched a recovery plan that focused on good corporate governance, low_cost liability generation, cost optmisation, and improved risk management. The plan is yielding the desired results and the Bank is looking ahead to a brighter future.”

Aboh explained that from a pre_intervention level of N528billion (as at August 14, 2009), the Bank’s deposits dropped initially to N49 billion  by October 2009, and then grew by 21.5 per cent to N595billion  as at March 31, 2010. He added that the Bank’s cost optimization initiatives have effectively streamlined its expense profile, paving the way for sustained value creation and profitability.

The Bank had recently announced the restated audited 2008 results for the Group as well as its financial performance for the year ended December 31, 2009.
Restatement of the Group’s financial statements for the 15 months to December 31, 2008 adjusts downwards by N71.2biillion and N349.5billion the previously reported Gross Earnings and Profit Before Tax respectively.

The Group’s restated Loss After Tax for 2008 stands at N234.7bn as against previously reported Profit After Tax of N9.6biilion. Group Non_Performing Loans have been restated at N443.3billion or 51 per cent of Total Loans & Advances as against. previously reported N54.5billion and 8.6 per cent respectively, as at 31st December 2008.

According to Oyinkan Adewale, the Bank’s Executive Director / Chief Financial Officer, “The current management team, which resumed in August 2009, evaluated the appropriateness of the Bank’s prior accounting and reporting decisions. We conducted an extensive review of the 2008 results, and, with the concurrence of the Board, came to the conclusion that it was best to restate the 2008 accounts to give a true and fair view of the Bank’s condition as at 31st December 2008. The thoroughness of the reviews gives us the confidence that the audited restated accounts adequately address the misrepresentations in the previously reported 2008 results. Going forward, our business and investment partners and all other stakeholders can rest assured of the quality and integrity of reported numbers.”


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