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Nigerian Banks post multi-billion Naira losses

Six Nigerian Banks: Bank PHB, Intercontinental Bank, Oceanic Bank, Spring Bank, FinBank and Union Bank last week posted a combined loss of 1.4 Trillion Naira (N1,426.79Billion). Nigeria’s Bank PHB (BPHB.LG) on Friday posted a 439 billion naira ($2.9 bln) group pre-tax loss for the 15 months to the end of September, hit by high provisions after a sector-wide audit by the central bank.

 Bank PHB said provisions for risk assets, loan losses and goodwill impairment totalled around 370 billion naira, while exceptional items were 80.7 billion naira.The group’s financial year used to end in June but it is shifting to the calendar year in line with a central bank directive to establish a uniform reporting period across the banking sector.

Nigeria’s Intercontinental Bank (INBK.LG) on Friday posted a pre-tax loss of 447.45 billion naira ($3 billion) for the seven months to September, hit by exceptional items of 437 billion naira.The bank, one of nine rescued in a $4 billion bailout earlier this year, said gross earnings in the period reached 119.77 billion naira.Intercontinental is changing its financial year to the calendar year in line with a central bank directive to establish a uniform reporting period across the banking sector, meaning year-ago comparisons were not immediately available.

Nigeria’s Union Bank (UBNP.LG) said on Friday it had swung to a pre-tax loss of 222.86 billion naira ($1.5 billion) for the half year to September from a 14.19 billion naira pre-tax profit a year ago.The bank, one of nine rescued in a $4 billion bailout earlier this year, said it had made provisions for exceptional items, risk assets and investments of more than 250 billion naira. Gross earnings rose 63 percent to 97.5 billion naira.Union Bank is changing its financial year to the calendar year in line with a central bank directive to establish a uniform reporting period across the banking sector.

Nigeria’s Springbank (SPRN.LG) on Friday posted a pre-tax loss of 23.3 billion naira ($155 mln) for the five months to September, hit by provisions of 18.16 billion naira following a central bank audit of the sector.The bank, one of nine rescued in a $4 billion bailout earlier this year, said gross earnings in the period reached 9.29 billion naira.Springbank is changing its financial year to the calendar year in line with a central bank directive to establish a uniform reporting period across the banking sector, meaning year-ago comparisons were not immediately available.

Nigeria’s Finbank (FIBP.LG) on Friday posted a 94.35 billion naira ($630 mln) pre-tax loss for the 11 months to September, hit by provisions and exceptional items totalling more than 120 billion naira.Gross earnings for the period came in at 59.5 billion naira.Finbank is changing its financial year to the calendar year in line with a central bank directive to establish a uniform reporting period across the banking sector, meaning year-ago comparisons were not immediately available.

Nigeria’s Oceanic bank (OCBK.LG) on Thursday posted a pretax loss of 400.9 billion naira ($2.7 billion) for the nine months to September, compared with a profit of 36.52 billion naira a year ago.Gross earnings at Oceanic, which is one nine banks rescued in a $4 billion bailout by the central bank earlier this year, slumped 58 percent to 46.83 billion, the bank said in a filing to the Nigerian Stock Exchange.

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5 banks lose over N1 trillion•The worst now behind us – CBN

 

CBN Governor Sanusi Lamido Sanusi

Union Bank, Bank PHB, Springbank, Finbank and Intercontinental Bank in several reports posted pre-tax losses. All five are among the nine which survived the sweeping restructuring of the Nigerian banking sector by the Central Bank of Nigeria (CBN), in a $4 billion bailout earlier this year, under the leadership of Sanusi Lamido Sanusi. Union Bank said yesterday that it had swung to a pre-tax loss of 222.86 billion naira for the half year to September from a 14.19 billion naira pre-tax profit a year ago, according to reports on international news agency Reuters. It also said it had made provisions for exceptional items, risk assets and investments of more than 250 billion naira. Gross earnings rose 63 percent to 97.5 billion naira.

Then Bank PHB posted a 439 billion naira group pre-tax loss for the 15 months to the end of September, hit by high provisions after the sector-wide audit by the central bank. Bank PHB said provisions for risk assets, loan losses and goodwill impairment totalled around 370 billion naira, while exceptional items were 80.7 billion naira. The group’s financial year used to end in June but it is shifting to the calendar year in line with a central bank directive to establish a uniform reporting period across the banking sector. It said it had carried out its own stress test and launched an aggressive debt recovery plan which was fundamental to repairing its balance sheet.

One of the banks, Springbank, posted a pre-tax loss of 23.3 billion naira for the five months to September, hit by provisions of 18.16 billion naira following a central bank audit of the sector. The bank, one of nine rescued in a $4 billion bailout earlier this year, said gross earnings in the period reached 9.29 billion naira.

Finbank posted a 94.35 billion naira pre-tax loss for the 11 months to September, hit by provisions and exceptional items totalling more than 120 billion naira. Gross earnings for the period came in at 59.5 billion naira. Finbank, like aforementioned banks, is changing its financial year to the calendar year in line with a central bank directive to establish a uniform reporting period across the banking sector, which means year-ago comparisons are not immediately available.

Intercontinental Bank posted a pre-tax loss of 447.45 billion naira for the seven months to September, hit by exceptional items of 437 billion naira. The bank said gross earnings in the period reached 119.77 billion naira. All five banks are changing their financial years to the calendar year in line with a central bank directive to establish a uniform reporting period across the banking sector.

According to the CBN in a press release signed by its Head of Corporate Affairs, M.M Abdullahi, there are two key reasons for the current reported losses. The first one is: “Following more detailed investigations, the new management of these banks found the situation in a number of the Affected Banks to be worse than had been originally thought.  A number of issues only came to light after the CBN had put in place new management teams who therefore had access to greater and more up to date information. As a result of these findings, the banks had to make provisions over and above the CBN’s initial recommendations.” Secondly, it said: “Nigerian banks, like other banks in countries around the world have faced a very challenging operating environment this year.”

Abdullahi added that “CBN is confident that the worst is now behind us.  The current management teams of the affected banks have made significant progress towards restoring stability in their operations and continue to work diligently to ensure that sustainable, long term solutions are implemented with a view to building a solid platform for future growth.” – DailyTrust