Posted by By Samuel Famakinwa in Lagos and Kunle Aderinokun in Abuja on
The just concluded consolidation exercise in the Nigerian banking sector has again reaped another benefit as nine Nigerian banks have made it.....
The just concluded consolidation exercise in the Nigerian banking sector has again reaped another benefit as nine Nigerian banks have made it into the listing of Top 1000 World Banks, up from four in 2005.
Indication also emerged at the weekend that the Central Bank of Nigeria (CBN) may drag the Revenue Mobilisation, Allocation and Fiscal Commis-sion (RMAFC) to court over claims on withdrawals from the foreign reserves.
The Banker Magazine, an arm of the Financial Times Group weekend released its world renowned Top 1000 World Banks ranking for 2006 and on the list were First Bank, Union Bank, Zenith Interna-tional Bank, IBTC Chartered Bank, Intercontinental Bank, Spring Bank, GT Bank, First Inland and Oceanic Bank.
According to the magazine, the rise in the number of Nigerian banks in this global 1,000 listing is “due to the consolidation that has taken place in the banking sector in Nigeria since 1st January 2006 and the creation of larger banking institutions with a minimum capital requirement of N25 billion”.
The rankings, the magazine said, are based on Tier 1 Capital as defined by Basel’s Bank for International Settlements (BIS), a definition which is stricter than total shareholders’ equity and covers only the core of the bank’s strength, that is, shareholders’equity available to cover actual or potential losses.
Tier 1 includes common stock, disclosed reserves and retained earnings and, in the case of consolidated accounts, minority interests in the equity of subsidiaries that are less than wholly owned.
However, it excludes cumulative preference shares, revaluation reserves, hidden reserves, subordinated and other long term debt.
In the order of ranking First Bank topped the Nigerian banks with 784 position and closely followed by Union Bank ranked 797. Others are Zenith Bank 857, IBTC Chartered Bank 863, Intercontinental Bank 877, Spring Bank 888, GT Bank 918, First Inland 975 and Oceanic Bank 995.
The magazine noted that this year banks from around the world needed $216m of Tier 1 Capital to make it into our Top 1000 ranking and figures are either used from annual reports or from a returned questionaire.
However, it said 2007 should provide a more complete picture of which Nigerian banks make it into the Top 1000 as year-end figures become available for the newly consolidated banks. Overall, it added that the increase represents a positive outlook for the Nigerian banking sector with larger banks providing a better platform for economic development.
The Top 1000 World Banks is a ranking of the world’s commercial banks and wherever possible, consolidated figures have been taken for the banking group. However, in the case of bancassurance groups, where possible, the figures reflect the banking business only.
In a statement released at the weekend, The Bankers magazine said the “object of the survey is to show the banks’ soundness in relation to the Basel requirement of a minimum Tier 1 capital on risk-weighted assets of 4 per cent, and a minimum ratio of capital to risk-weighted assets of 8 per cent.”
“The published assets figures differ from the risk-weighted assets figures that are used to calculate BIS ratios. Weights applied range from zero (to assets such as cash, claims on central banks and governments in local currency), to 20 per cent (to assets such as lending to multilateral development banks), to 50 per cent (to residential mortgages) to 100 per cent (to private-sector lending, non-OECD lending and so on). However, the Basel rules adopted by individual countries’ regulatory authorities will vary to some extent.
“Wherever possible, the total assets figures shown exclude third-party items such as acceptances, guarantees and securities held with third parties.
“Pre-tax profits are used to show banks’ performance and the figures for real profit growth take inflation into account. The profit-on-capital ratios are calculated using the average of the latest and previous years’ capital figures.
“The NPL column refers to the gross non-performing loans as a percentage of the total loan book. This year, we have excluded all banks whose latest figures were prior to December 31, 2003, even though they may still be operating”, the statement reads.
Meanwhile, indication emerged at the weekend that the Central Bank of Nigeria (CBN) may drag the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) to court over claims on withdrawals from the foreign reserves.
THISDAY gathered that a group of senior officials of the apex bank were pressing its Legal department on the possibility of seeking redress in the law court with its sister organ of government.
The development is coming ahead of further probe into the allegation of tampering with the nation’s burgeoning external reserves leveled against the CBN and the Ministry of Finance by the Revenue Commission when the Senate resumes in August for its fourth session.
Chairman of RMAFC, Eng. Hamman Tukur, had last month told Senators, amongst others that gathered at the Public Hearing called by the Senate, that the amount in the nation’s foreign reserves stood at $12.5 billion as at the end of May, which contradicted the record of $34.09 billion given by the CBN, implying that the bank was lying.
He had also said operation of the excess crude account was illegal and also considered illegal withdrawal from the foreign reserve account.
This may have drawn the ire of the bank’s senior officials who are now bent on proving CBN’s innocence in the law court.
It could be recalled that, shortly after the debate on the constitution review, which major highlight was the Third Term, Senator Farouk Bello Bunza sparked off a controversy when he said the foreign reserve had been reduced to $9.9 billion and that monies were withdrawn from the account without the consent of the Senate.
According to sources, the apex bank’s officials were insisting that the commission committed a slander by saying that the level of reserves was much less than the former as “billions have been withdrawn from the account secretly and illegally.
CBN source nonetheless told THISDAY last night that the school of thought angling for a legal redress only wanted to ensure that no individual or group would in future seek to discredit the bank simply for political reasons.
The source accused Tukur of playing “cheap politics” in his presentation to the Senate Committees at the last month’s public hearing noting that both the international community and the market knew who was saying the truth.
“How did the market react to the allegation? If they took him seriously, we would have witnessed a free fall of the naira at the foreign exchange market”, he pointed out.
However, RMAFC’s official who spoke on the condition anonymity said the matter to be resolved remained whether or not the Excess Crude Account ought to be regarded as part of the foreign reserve or not stressing that, “in any case, what we are saying is that billions of dollars was secretly withdrawn from the excess crude account, without the consent of the National Assembly.”
Meanwhile, contrary to yesterday's report which listed the Central Bank Governor, Prof. Charles Soludo, among members of the economic management team in the Obasanjo administration who have constituted themselves into a pressure group which is seeking to ensure that none of the old names in the presidential race emerged as the next occupant of Aso Rock in 2007, he is not a member.
Operating under the pseudo name of the 'The Reformists', a name derived from the economic reforms policy of the administration, members of the group, sources said, have after several meetings concluded that "what is needed in the election of a new President is not power shift but a complete paradigm shift.”
But THISDAY checks reveal that Soludo is neither a member of the group nor does he seek or play any political role, concentrating solely on his job as CBN Govern
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