By Peter Egwuatu
CENTRAL Bank of Nigeria (CBN) has assured  investors that there would be no more major shocks from the ongoing banks audit as available reports from twelve out of the fourteen banks currently undergoing examination  was fair than the last 10 audit which led to the sacking of five banks” boss and their executive directors.

SANUSI

CBN Governor, Lamido Sanusi disclosed this to stockbrokers and the entire capital market community  at the Nigerian Stock Exchange (NSE) that the results of an audit of the remaining 14 banks would be announced early next month but that they appeared in better health than those already examined.

The CBN had  injected $2.6 billion (N420 billion)  into five banks on Aug. 14 after an audit of 10 institutions found they were so weakly capitalised that they posed a systemic risk in sub-Saharan Africa’s second-biggest economy.The move, which sent shockwaves through corporate Nigeria, triggered a sell-off of banking stocks as investors worried whether more liquidity problems would be exposed as the audit continued at the rest of the country’s 24 financial houses.

“We hope to announce our results by early October. I would say that the results are better than the 10 (already examined) that much I can say,” Sanusi said.

A source close to capital market regulator revealed to Vanguard that CBN  examiners had completed their audit of a second batch of 14 banks and that some infractions had been found, but none on the scale of those at the five rescued banks.
The examiners’ report, which is still being compiled, according to source must be endorsed the governing board of the CBN before its conclusions are made public.

The five banks bailed out last month are Afribank Nigeria Plc, Finbank, Plc, Intercontinental Bank Plc, Oceanic Bank Plc, and Union Bank Nigeria Plc.
In its analysis of the remaining banks under examination, Sanusi said, “ I have not even finished reading the reports. But, what I know is that there is nobody who should take it that he has a guaranteed job and do whatever he likes.”

Sanusi said that the  five rescued banks will be run as going concerns until new investors can be found to recapitalise them and that the capital injection would be convertible into some form of Tier 2 debt or preference shares.

That has raised concern among existing shareholders that their stakes will be diluted and led some to question the legality of the central bank’s plans.“I have said it very clearly that we would not treat any shareholder unfairly and that we would go through all the processes that we need to go through before any change takes place,” Sanusi said.

The new management of the five rescued banks told stockbrokers they were making progress in recovering non-performing loans  estimated at 1.14 trillion naira ($7.5 billion) by the CBN and that deposits were secure.