Foreign Investor Behind Controversial Bank’s Rating Report

04.07.2009

The much-talked about rating of Nigerian banks published by The Africa Report, a publication of the Paris-based Groupe Jeune Afrique and quoted by the a Nigerian newspaper has been linked to the efforts of a foreign investor to enter Nigerian financial market in the wake of the new policy at the Central Bank of Nigeria (CBN).

The new CBN governor, Sanusi Lamido Sanusi, had recently announced that the apex bank would allow foreign institutions to take up controlling equity in the Nigerian banking industry contrary to the policy under Prof. Chukwuma Soludo, the immediate past CBN governor.

According to findings, the foreign investor recently pulled out of one of the banks in the top four and with the new regime at the CBN now encouraging them to come back, the investment outfit wants to have 51 per cent in some of the banks categorised as ‘shaken’.

Groupe Jeune Afrique had earlier categorised Nigerian banks into four, as Strong, Satisfactory, Shaken and Stressed.

Some of the banks categorised as shaken are leading in most indices of health in the recent audited results approved by the regulatory authorities and are one of the biggest in the industry.

But sources at one of the finance sector regulatory agencies hinted on Friday that the purpose of categorizsing some banks as shaken is to create enough problem in the targeted banks for easy acquisition at cheap price.

Impeccable sources revealed that the report, which had generated criticisms from the financial sector operators, was principally greeted with deluge of complaints due to the marked variance with other reputable and well-known international rating agencies.

It was gathered that the rating was done randomly, a move operators argued could cause panic in the financial services sector because its criteria were not specified.

The Association of Corporate Affairs Managers of Bank (ACAMB) had faulted the report raising ethical issues, professionalism, competencies and historical antecedents, saying that earlier ratings by Fitch, world’s leading rating agency, gave credence to the viability and healthy state of Nigerian banks.