By Peter Egwuatu
The Chairman, Progressive Shareholders Association of Nigeria, PSAN, Mr. Boniface Okezie, in an interview with Financial Vanguard, spoke on the first quarter financial performance of banks quoted on the Nigerian Stock Exchange, NSE as well as activities of the regulatory bodies in the regulation of the banking sector, among others.
IN your view, how have the banks performed in the first quarter of 2017? Did they meet shareholders’ expectations?
Well, in my view, the results so far released by some of the banks show improved performance. The earnings of most banks whose results were released to the NSE went up, but their profits did not rise like their gross earnings, an indication that cost of operations affected the bottom line.
The banks are still battling with the high cost of doing business, it is my hope that when the economy starts to record growth and address some of the infrastructure challenges, coupled with the challenges from the regulatory bodies, we will begin to see better performance of banks.
In all, the banks met my short term expectations considering the operating environment circumstances, but in the long run I still want them to perform more so that they can pay higher dividend at the end of the year.
What are the regulatory challenges that the banks are facing?
One of the regulatory challenges that banks are facing has to do with penalties from the Central Bank of Nigeria, CBN and Nigerian Stock Exchange, NSE. The penalty fees is becoming too much. An offence cost the banks not less than N60 million and this is impacting negatively on shareholders’ return on investment.
What could have been added to pay us as dividend is given away to regulators for committing one offence or the other.
So, I appeal to these regulators to reduce the charges for these offences and encourage the banks by churning out good policies that will help engender the growth of the banking sector.
What is your position on the directive from the CBN that banks should keep five per cent of their profit for Export Fund?
You can see what I said earlier about regulatory challenges been faced by banks. The banks fund Asset Management Corporation of Nigeria, AMCON. Now, the CBN has directed that banks should set aside another of their five per cent from their operating profit to finance Nigerian export businesses or businesses with import substitution capabilities. What is the responsibility of the Export Promotion Council? This Council has budgetary allocation from the Federal Government to promote the export sector.
The CBN just keep tasking the banks at the detriment of the owners. The same banks pay tax to the government. The banks should be allowed to use their initiative to fund the export sector.
The banks are set up to make profit, so they should be allowed to perform their intermediary role. We shareholders are tired of these pools of funds being initiated by the government.
The banks at the Bankers’ Committee meeting should communicate our feelings to the apex banks.