By Dele Sobowale
“I want to see a situation where bank depositors can go to sleep with their two eyes closed”. Professor Chukwumah Soludo, Governor, Central Bank of Nigeria, August 2004. And for Soludo, security could only be guaranteed by creating banks which were “too big to fail. Like the author of the great ship, called Titanic whose builder boasted that “even God cannot sink it,” Soludo, as we had noted earlier, got his wish.

At least 14 “Titanic” banks arose out of the 73-plus small boats then floating in the banking sector. Furthermore, with Soludo’s encouragement, a race was on to become the biggest bank in Nigeria. What was once a position claimed by either the First or Union bank became the target of several. Everybody headed for the capital market.

Very soon, prospectuses were flying all over banking halls like confetti on Main Street to welcome champion teams; it was also the season of deliberate false advertising.

Annual Reports and Accounts previously made slightly misleading; were now grossly distorted; five-year projections were made so inviting that only a few wary observers could discern the traps being laid.

Incredibly, Soludo was one of the few who saw through the false Annual Reports and Accounts; to him banks statements could be accepted at face value; after all, they had been audited by reputable audit firms.

Until he left office, Soludo never gave a hint that he knew that, by 2007, the houses of cards which the likes of Oceanic, Intercontinental, PHBank; and even, “BIG STRONG RELIABLE” Union Bank were, were already heading for the graveyard of banks.

Yet, there were warnings along the way which were, as usual, ignored. Below is an excerpt from the first one published in June 2008. Read and be amazed at the accuracy of the prediction.

BANKING OR LEGALISED SWINDLE IN NIGERIA?

“It [is] beautiful and simple as all truly great swindles are.” O. Henry, 1862-1910 in THE HEART OF THE WEST.

(VANGUARD BOOK OF QUOTATIONS p. 239)

Back in 1990, when Jimi Lawal ran Alpha Merchant Bank and was the toast of the Nigerian Stock Exchange and bankers apparently minted their own money instead of waiting for the MINT, I wrote an article titled FUNNY MONEY which not only pointed out that the banks were deceiving the public with their inflated annual reports and accounts but also predicted that they were headed for a crash.

I told everybody close to me to avoid certain banks and to withdraw their money from those banks –including ALPHA and COMMERCE Banks; the latter was headed by two former presidents of the Chartered Institute of Bankers.

The polite people ignored me; the blunt told me I was crazy. Today, the few who followed my advice would never cease to be grateful; some of the unbelievers are still licking their wounds. Some were ruined till death. Believe it or not, we are almost back to the era of FUNNY MONEY.

This time, banks are ruining Nigerians in several ways and are probably sucking funds illegally from depositors over twenty times the money that the entire country loses to armed robbers and Area boys!

No single article since the struggle against the actualization of the evil third term for Obasanjo has brought in a heavier harvest of responses, than the one titled, ARE BANKS DEALING HONESTLY WITH NIGERIANS? It was not even the lead column; but by popular request, I had sent in that teaser to determine the depth of disenchantment with Nigerian banks by their customers.

Governor Fashola last week claimed he received over 230 texts a day. He is governor, I am a pen pusher. But, on this subject, I received almost half that number in one day. In fact, it got to a point, I wondered if I have not bitten off more than I can chew and digest.

But, this is a national calamity waiting to happen as some people driven to desperation might start taking the law into their own hands against bankers. I cannot publish all; some cannot ever be published by a responsible newspaper. But, the danger is there all the same.

Indeed, if the banking reform which reduced the number of banks from about 89 to 25 were to be judged by the feeling of pervasive dishonesty in Nigerian banks, then the Central Bank of Nigeria and Professor Soludo might not be so satisfied with the outcome of consolidation.

One of the favourite statements the Governor of Central Bank of Nigeria, CBN, makes everywhere he goes is “You can now go to sleep with your eyes closed knowing your money is safe in the bank”; or words to that effect. If Soludo repeats that statement after reading this article, he would be telling a bloody lie;

Then in July, 2008, a month after the first one and at least 15 months before Sanusi lifted the veil of secrecy which characterized our real knowledge of what went on in Nigerian banks, I had published in my SUNDAY VANGUARD column, an article titled BANKING ROBBERY THROUGH DUBIOUS CHARGES.

Through painstaking investigation, it had become clear to me that Nigerian banks were systematically, and as a matter of official policy, robbing their customers. That was the first sign that, contrary to what Soludo was saying at the time, the banks were in trouble. If not, why should banks swindle their customers? Read on.

BANKING ROBBERY THROUGH DUBIOUS CHARGES

DELE SOBOWALE

“A sucker [fool] is born every minute”.

P.T. Barnum, 1810-1891, U.S Circus Master

God must love suckers because he had created about 140 million of them in Nigeria alone.

To be continued

Then Professor Chukwumah Soludo apparently created 25 consolidated banks to relieve them of their money while pretending to help them keep the funds in “safe deposit.” After all, a fool and his money are soon parted. We are all a bunch of fools in this country offering our money to banks with no more sense than children; that is certain.

One other thing is certain in Nigeria these days, whether you keep your N1,000 under your pillow or in your current account in a Nigerian bank, the result might be the same. You might return a year after to discover that the money had vanished.

One of those responding to my first article wrote to me about his experience with his bank. He had drawn down his account to N2,000 when going abroad for a course lasting ten months. He returned to discover that his account showed a debit balance.

He owed his bank some money! Now tell me what difference it would make if he had dug a hole and placed the money in it. The worst case scenario is that the entire money would have disappeared. But he certainly would not be indebted to the hole in the ground.

On the other hand, his bank was waiting for him to ask for more money to pay the “debt” he owed to the bank!!! In fact, the poor fellow would have been better off if the money was stolen. What sort of a banking system is that which has placed the people in a position here they would be better off being robbed than putting their money in the bank?

Like millions of us foolish enough to fall for the clever and deceptive advertisements as well as the pleasant smiles of bankers, the fellow had not bothered to ask his bank what would be the administrative charges deductible if he opens an account.

He just trusted his bank. Still not believing his eyes, he then proceeded to request for a statement of his account. And behold, the bank had charged him for “services” which included network or some funny thing not quite explained without caring to let the account holders know in advance. That means with your money in their custody – like an accused in police custody or a prisoner of war – they can do what they want with it and they are guaranteed immunity.

The two articles constituted the beginning of a sustained warning to Nigerians about the inevitable “CON-SOLUDO-TION”. The surprising thing was that very few of “My Fellow Countrymen” believed me. That always reminds me of that irreverent English writer who asked “How many fools make up, My Fellow Countrymen?”

Thus when Soludo’s tenure was coming to an end, the media battle for his re-appointment, when it was not overly tribalised, was a tragi-comedy.

Hilarious was the fact that many of our Southeastern fellow citizens, who had been mostly successful in other endeavours, were suckered into venturing into the capital market through the acquisition of bank shares which they were promised will yield better returns than anything they ever did in their lives.

To them, my criticism of “con-soludo-tion” was another example of “Yoruba people not finding anything good in other tribes.” Except for my articles on the DG-NSE, nothing brought more hate text messages than my predictions that disaster was around the corner.  The tragedy was, it came as predicted and took down everybody with it – irrespective of ethnic group.

To capture the full impact of the calamity which befell the banking sector, which also adversely affected the Stock Market and is savaging the lives of millions of investors and their families, all that is necessary is to look at the chart below.

SELECTED BANKS

(ALL FIGURES IN NAIRA)

BANK S.C Jul ‘04 Q.P Jul 29 ‘04 Q P Apr ’08 Q P Oct ‘11

First 35b 29.50 41 9

Union 35b 34.50 37 —

Intercontnl 10b 6.08 45 —

Oceanic 7b 5.50 26 —

UBA 20.5B 10.50 54.70 3.95

WEMA 7.1b 4.61 15 0.72

Zenith 16.6b Unlisted 46.99 12.

Key: SC= Share Capital; Q P = Quoted Price

No Wikileak stuff. The $6 billion liquefied gas project in Rivers State included over $576 million is fines paid by Halliburton, one of the contractors for bribes paid to top government officials to enable them inflate the cost of the project. Read DeleLeaks. N5,000 per copy.