De-marketing: Stockbrokers Indict Bank MD

No Comments » March 31st, 2009 posted by // Categories: Nigeriawatch


De-marketing: Stockbrokers indict Bank MD
Written by Omoh Gabriel, Business Editor
Tuesday, 31 March 2009
LAGOS — STOCKBROKERS in the country yesterday indicted the Managing Director of one of the top five banks in the country as the source of the de-marketing going on now in the banking industry.

The brokers said the bank chief is involved in the act to promote both his ambition of becoming the next CBN Governor and an agenda set for him by his sponsors.

According to the brokers, the said top banker is “using direct de-marketing antics. Big-time depositors including state governors and ministers are being harassed with text messages, e-mails and other information devices suggesting that only two banks are healthy in Nigeria today, thereby urging depositors to move their funds away from all other banks to those two banks.” As a result, highly placed Nigerians have been calling on their brokers to disclose to them the true financial position of each of the banks in the country.

Vanguard had, last week, reported exclusively that anti-consolidation forces have regrouped with the hope of dissembling the banks and forcing a take-over of five of the top banks in the country. According to the report, “the grand plan by the group is to cause panic and uncertainty in the industry and make the target banks look unsafe for depositors.

Their aim, Vanguard gathered, is to cause loss of public confidence in the banking industry and compel the Federal Government to move in by injecting funds. Further, they ultimately plan to instigate government to take equity holdings in the targeted banks.

“Vanguard’s investigations revealed that the group at work is made up of former bank owners who lost out during the consolidation exercise, a powerful clique in the present government, and some aggrieved persons in three of the six geo-political zones in the country who felt left out in the consolidation exercise.

Stockbrokers who have been in the eye of the storm over margin loans over bank loans gone bad as a result of the global financial meltdown denied that they contributed in any way to the bad loans in the banks, but rather they were acting on behalf of their clients in all buy and sell contracts in stocks, contrary to an allegation by a first generation bank’s chief executive.

According to the stockbrokers, the first generation bank chief executive, who is currently vying for the Central Bank (CBN) governorship position, also has stock of loans that has gone bad, and is using de-marketing to shore up his bank’s financial position against its year end which falls due in March. This is also expected to improve his profile against other candidates jostling for the CBN job.

However, the stockbrokers have also identified other banks that have joined in the de-marketing of competitors. No fewer than 13 banks have been mentioned as being distressed at the last count. It is believed that over 18 banks have gone to the CBN for the expanded discount window money to shore up their deposits and meet customers’ obligations amid tight liquidity situation in the industry, arising from de-marketing going on in the industry.

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