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Analysis

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16 years ago

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—-Four of the five banks accounts for N 1.3175 trn,
—-non performing loans N115.3
—accounts for 30 % of loans,
—- 45 % of non performing loans
By Omoh Gabriel, Business Editor
As the controversy over the injection of funds into some five banks in the country continues to range more facts are beginning to emerge. Available data from industry study as at March 2009 provide an insight into developments in the industry. Available data indicate that as at March 2009, 18 out of the 24 banks operating in the country a total loan portfolio of N 4.4595 trillion. Total deposit of the banks was N4.0673 trillion. Of the N 4.4595 trillion loans and advances in the 18 banks four of the sanctioned banks Union Bank, Intercontinental, Oceanic and Afribank carried N 1.3175 trillion of the loans representing 30 per cent of the total loans and advances granted by the 18 banks. While the total non performing loans of the 18 banks stood at N 239.4 billion out side the margin loans, the four banks non performing loans was N 115.3 representing about 45 per cent of non performing loans in the 18 banks.
But the CBN accused the five banks high level of non-performing loans in which was attributable to poor corporate governance practices, lax credit administration processes and the absence or non-adherence to the bank’s credit risk management practices. Thus the percentage of non-performing loans to total loans ranged from 19 per cent to 48 per cent. The 5 banks will therefore need to make additional provision of N539.09 billion.
The total loan portfolio of these five banks was N2,801.92 billion. Margin loans amounted to N456.28 billion and exposure to Oil and Gas was N487.02 billion. Aggregate non-performing loans stood at Nl,143 billion representing 40.81 per cent . The huge provisioning requirements have led to significant capital impairment. Consequently, all the banks are under capitalised for their current levels of operations and are required to increase their provisions for loan losses, which impacted negatively on their capital. The CBN did not give the nation the benefit of the state of each of the banks. Igt gave a total view of the situation without giving specifics.
But a number of persons and corporate bodies listed as owing the five banks various sums of money are contesting the amount the CBN claimed they are owing. Among those who reacted to the CBN publication were the Chairman of Obat Oil and Petroleum Company, Fredrick Akinruntan, businessman Jimoh Ibrahim and Rockson Engineering Company.
Akinruntan described the inclusion of his name in the debtors’ list as embarrassing, claiming that the report did not reflect the reality on ground. He was said to be owing Oceanic Bank N4.47 billion.
He denied owing any unserviceable loan. He said he collected N2.5 billion from the bank to develop a property in Abuja and has never defaulted on the terms he agreed with the bank. Akinruntan said the bank should speak up on his claim. Also, Ibrahim, who is the Group Managing Director of Global Fleet Group, denied owing Oceanic Bank N14 billion. He threatened to sue the CBN for “lying about the amount” involved. In a briefing in his office in Abuja Ibrahim said: “My company did not owe Oceanic Bank N14. 7 billion. The CBN lied on the figure, a development that has affected the credibility of the CBN’s regulatory function.
“Oceanic Bank, by a letter dated May 18, 2009, had put all the outstanding debts of all Global Fleet Group at N8 billion as the bank acknowledged receipt of N3 billion I paid in May this year. In the letter acknowledging the receipt, the bank had written that ‘the total outstanding on your facilities will be N8 billion.’ He accused the apex bank of unfairness by describing the loan as “non-performing” even after paying N3 billion. Ibrahim said that “the turnover on the account of Global Fleet Group since inception is over N100 billion and will need Oceanic Bank to do reconciliation and provide evidence of withdrawal to enable us pay. ” Similarly, the management of Rockson Engineering Company said that the funds it allegedly raised from Intercontinental Bank were meant for implementation of the power projects it is handling for the Federal Government, which has failed to release money for the plants. The projects are the Alaoji (1072MW), Gbarain (225MW), Egbema (338MW) and Omoku (230MW) power stations.
Describing the step taken by the CBN as inaccurate and uncalled for, the Chairman of Rockson, Senator Aniete Okon, said the firm was indebted to Intercontinental Bank to the tune of N14.4 billion and not N36.9 billion as claimed by the apex bank. His words: “Specifically, CBN claims that Rockson Engineering Limited is indebted to Intercontinental Bank Plc to the tune of N36, 989, 685, 692.84. For the avoidance of doubt, we like to state that our reconciled and mutually agreed commitment with Messrs Intercontinental Bank Plc is N14, 423, 291, 589.49.
A statement from Dangote Industries stated inter alia: “We refer to the CBN advertorial in various print publications dated 19th August 2009, listing Alhaji Aliko Dangote as a Director and Shareholder of Dansa Oil and Gas Limited, a defaulting customer to Intercontinental Bank Plc.
“We wish to state for the records that Alhaji Aliko Dangote is neither a Director nor a Shareholder of Dansa Oil and Gas Limited as averred. This is verifiable through the Company Registration documents held by the Corporate Affairs Commission (CAC) wherein directors of the said company are listed as: Alhaji Sani Dangote, Alhaji Mohammed Dangote, Mr Ali Dangote.
“With reference to Dangote Industries Limited’s indebtedness to Oceanic Bank Plc to the value of N2,526,460,000.00, we are in dispute over the charges and are very close to resolution.
“A company of our size will take on facilities from bankers and financiers in the course of our business. As a responsible organization, we deliver to our obligations in servicing these loans. “It is on record that our credit rating remains admirable and our bankers have confidence in our ability to meet our obligations.” Also, Chairman of Global Fleet Group, Jimoh Ibrahim, on his N14.5 billion indebtedness to Oceanic Bank, described the publication by CBN as laughable.
The CBN claimed that these banks were unable to meet their maturing obligations as they fall due without resorting to the CBN or the inter-bank market. As a matter of fact, the outstanding balance on the EDW of the five banks amounted to N 127.85 billion by end July 2009, representing 89.81 per cent of the total industry exposure to the CBN on its discount window while their net guaranteed inter-bank takings stood at N253.30 billion as at August 02, 2009.
As at March 2009 for which data are available on the Nigerian banks from published figures, Union Bank had a total loan portfolio of N 291.9 billion, total deposit of N 682.3 billion and non performing loans of N 71.5 billion. The bank’s loan/deposit ratio was 42.8 per cent. This implies that out of every N 100 cash deposit with Union Bank N 42.8 of the cash deposit was given out as loans during the period leaving N 57. 20 in the vault. The non performing loan as against total loan ratio was put at 24.5 per cent implying that out of every N 10 given out as loans N 2.45 was not coming back to the bank as when needed. First Bank on the other had as at March 2009 on its books had a total loan portfolio of N 469 billion, total deposit of N 700.2 billion and non performing loans of N 7.3 billion. Its loans to deposit ratio was 67 per cent meaning that for every N 100 deposited with it N 67 was given out as loans while the ratio of non performing loans to total loans stood at 1.6 per cent indicating that only about N 1.6 out of every N 10 given out as loans was not returning to the bank as when required.
For the United Bank for Africa, its total loans portfolio stood at N 461.7 billion, total deposit was N 1.33 trillion while non performing loans amounted to N 16.2 billion. The bank loans to deposit ratio was 34.6 per cent implying that for every N 100 cash deposit the bank gave out N 34.6 as loans and the non performing loans as against the bank’s total loans stood at 3.5 per cent indicating that for every N 10 granted as loans about N 3.5 was difficult to recover.
Zenith on the other hand, as at the time under review, had a total loan portfolio of N 288.1 billion, total deposit of N 1.185 trillion and a non performing loan account of N 4 billion. The bank’s loan to deposit ratio was 24.3 per cent showing that the bank was giving out about N 24.3 out of every N 100 cash deposited with it and a non performing loan ratio of 1.4 per cent showing that it was unable to recover N 1.4 out of every N 10 it gave out as loans as at the period under review. Intercontinental Bank one of the five banks the CBN effected changes on its top management including the pioneering Managing Director on its part had N 456.3 billion total loans portfolio, a deposit of N 1.057 trillion, Non performing loans of N 16.6 billion. Intercontinental’s total loan to total deposit ratio had a record of 43.2 per cent implying that out of every N 100 cash deposited with the bank it gave out N 43.2 as loans while keeping N 56.8 in its vault and its non performing loans to total loans as at March 2009 was 3.6 per cent implying that for every N 10 given out as loans N 3.6 was difficult to recover from debtors. Gtbank on the other hand had as at March 2009 a total loan account of N 294.4 billion, total deposit of N 364.6 billion, non performing loan of N 3.8 billion. Gtbank’ total loan to deposit ratio at the time stood at 80.7 per cent showing that the bank gave out as loans 80 kobo from every N1 cash deposit while its non performing loans to total loans ratio was 1.3 per cent meaning that for every N 1 granted as loans the bank was not able to collect from debtors 1.3 kobo .
In the case of Oceanic Bank another of the affected five banks, its total loans as at March 2009, was N 351.3 billion. The bank had a total deposit of N 693.9 billion with a non performing loans portfolio of N 11.3 billion. Oceanic bank’s total loans to deposit ratio was 50.6 per cent indicating that about N 50.6 out of every N 100 cash deposit with it was given out as loans and its non performing loans to total loans ratio stood at 3.2 per cent also implying that the bank could not recover from its debtor about 3.2 kobo on every N1 given out as loans. The seven banks were regarded as the top tier banks in the country.
The seven banks had on their books on the average N 373.2 billion as loans, N 859.6 billion as the average deposit, average of N 18.7 billion as non performing loans, loans to deposit ratio of 49 per cent while the ratio of non performing loans to total loans had average ratio of 2.4 per cent.
Diamond Bank on its part had a total loan account of N 250.3 billion, total deposit of N 419.7 billion, non performing loans of N 4.3 billion; a loan to deposit ratio of 59.6 per cent and non performing loans to total loans of 1.7 per cent. Afribank one of the five banks which Managing Director was removed from office had a total loan portfolio of N 116.1 billion, total deposit of N 218 billion, non performing loans of N 15.9 billion loans to deposit ratio of 53.3 per cent and non performing loans to total loans ratio of 13.7

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Analysis

As EU plans Russian Gas exit, Ministers to convene in Paris to chart Africa’s export potential

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2 weeks ago

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November 19, 2025

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In the wake of seismic shifts in the European energy landscape, the Invest in African Energy (IAE) 2026 Forum in Paris will host a Ministerial Dialogue on “Unlocking Africa’s Gas Supply for Global Energy Security.” This strategic session will examine how Africa can turn its untapped gas reserves into a reliable and sustainable source of supply. With Europe seeking to diversify away from Russian gas, the dialogue highlights both the continent’s growing role in global energy markets and the opportunity for African producers to attract long-term investment. Recent developments underscore the urgency of Africa’s role in global energy security. Last month, EU countries agreed to phase out their remaining Russian gas imports, with existing contracts benefiting from a transition period: short-term contracts can continue until June 2026, while long-term contracts will run until January 2028. In parallel, the European Commission is pushing to end Russian LNG imports by January 2027 under a broader sanctions package aimed at limiting Moscow’s energy revenues.

Africa’s role in this rebalancing is already gaining momentum. Algeria recently renewed its gas supply agreement with ČEZ Group, ensuring continued deliveries to the Czech Republic. In Libya, the National Oil Corporation (NOC) has approved new compressors at the Bahr Essalam field to boost output and reinforce flows via the Greenstream pipeline to Italy. These developments complement the Structures A&E offshore project – led by Eni and the NOC – which is expected to bring two platforms online by 2026 and produce up to 750 million cubic feet per day, supporting both domestic and European demand. West Africa is pursuing ambitious export routes as well.

Nigeria, Algeria and Niger have revived the Trans-Saharan Gas Pipeline (TSGP), with engineering firm Penspen commissioned earlier this year to revalidate its feasibility. The proposed $25 billion Nigeria–Morocco pipeline is also advancing as a long-term corridor linking West African gas to European markets. Meanwhile, the Greater Tortue Ahmeyim (GTA) project off Mauritania and Senegal came online earlier this year, with its first phase targeting 2.3 million tons of LNG annually. In June, the project delivered its third cargo to Belgium’s Zeebrugge terminal, marking the first African LNG shipment from GTA to Europe. Together, these milestones underscore a strategic convergence: African producers are accelerating efforts to scale up exports just as Europe intensifies its search for reliable alternatives to Russian gas.

Yet, as the ministerial session will explore, unlocking Africa’s gas supply demands sustained investment, regulatory alignment, environmental management and community engagement. For Europe, diversification of supply is a strategic necessity; for African producers, it is an opportunity to accelerate development, build infrastructure and secure long-term capital. At IAE 2026, these shifts will be examined by the officials and stakeholders driving them. The Ministerial Dialogue brings African energy leaders together with European policymakers, industry players and investors in a setting that supports practical, solution-focused discussion on supply, export strategies and future cooperation. As Europe adapts its gas strategy and African producers progress major projects, the Forum provides a direct platform for ministers to outline priorities and for investors to engage with key decision-makers.

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Analysis

Authorities must respond as digital tools used by organized criminals accelerate financial crime—IMF

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3 weeks ago

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November 18, 2025

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International Monetary Fund IMF, has said that criminals are outpacing enforcement by adapting ever faster ways to carry out digital fraud. The INF in a Blog post said the Department of Justice in June announced the largest-ever US crypto seizure: $225 million from crypto scams known as pig butchering, in which organized criminals, often across borders, use advanced technology and social engineering such as romance or investment schemes to manipulate victims. This typically involves using AI-generated profiles, encrypted messaging, and obscured blockchain transactions to hide and move stolen funds. It was a big win. Federal agents collaborated across jurisdictions and used blockchain analysis and machine learning to track thousands of wallets used to scam more than 400 victims. Yet it was also a rare victory that underscored how authorities often must play catch-up in a fast-changing digital world. And the scammers are still out there. They pick the best tools for their schemes, from laundering money through crypto and AI-enabled impersonation to producing deepfake content, encrypted apps, and decentralized exchanges. Authorities confronting anonymous, borderless threats are held back by jurisdiction, process, and legacy systems.
Annual illicit crypto activity growth has averaged about 25 percent in recent years and may have surpassed $51 billion last year, according to Chainalysis, a New York–based blockchain analysis firm specializing in helping criminal investigators trace transactions. Bad actors still depend on cash and traditional finance, and money laundering specifically relies on banks, informal money changers, and cash couriers. But the old ways are being reinforced or supercharged by technologies to thwart detection and disruption.
Encrypted messaging apps help cartels coordinate cross-border transactions. Stablecoins and lightly regulated virtual asset platforms can hide bribes and embezzled funds. Cybercriminals use AI-generated identities and bots to deceive banks and evade outdated controls. Tracking proceeds generated by organized crime is nearly impossible for underresourced agencies. AI lowers barriers to entry. Fraudsters with voice-cloning and fake-document generators bypass the verification protocols many banks and regulators still use. Their innovation is growing as compliance systems lag. Governments recognize the threats, but responses are fragmented and uneven—including in regulation of crypto exchanges. And there are delays implementing the Financial Action Task Force’s (FATF’s) “travel rule” to better identify those sending and receiving money across borders, which most digital proceeds cross.
Meanwhile, international financial flows are increasingly complicated by instant transfers on decentralized platforms and anonymity-enhancing tools. Most payments still go through multiple intermediaries, often layering cross-border transactions through antiquated correspondent banks that obscure and delay transactions while raising costs. This helps criminals exploit oversight gaps, jurisdictional coordination, and technological capacity to operate across borders, often undetected.
Regulators and fintechs should be partners, and sustained multilateral engagement should foster fast, cheap, transparent, and traceable cross-border payments. There’s a parallel narrative. Criminals exploit innovation for secrecy and speed while companies and governments test coordination to reduce vulnerabilities and modernize cross-border infrastructure. At the same time, technological implications remain underexplored with respect to anti–money laundering and countering the financing of terrorism, or AML/CFT. Singapore’s and Thailand’s linked fast payment systems, for example, enable real-time retail transfers using mobile numbers; Indonesia and Malaysia have connected QR codes for cross-border payments. Such innovations offer efficiency and inclusion yet raise new issues regarding identity verification, transaction monitoring, and regulatory coordination.
In India, the Unified payments interface enables seamless transfers across apps and platforms, highlighting the power of interoperable design. More than 18 billion monthly transactions, many across competing platforms, show how openness and standardization drive scale and inclusion. Digital payments in India grew faster when interoperability improved, especially in fragmented markets where switching was costly, IMF research shows These regional innovations and global initiatives reflect a growing understanding that fighting crime and fostering inclusion are interlinked priorities—especially as criminals speed ahead. The FATF echoed this concern, urging countries to design AML/CFT controls that support inclusion and innovation. Moreover, an FATF June recommendation marks a major advance: Requiring originator and beneficiary information for cross-border wire transfers—including those involving virtual assets—will enhance traceability across the fast-evolving digital financial ecosystem.
Efforts like these are important examples of how technology enables criminal advantage, but technology must also be part of the regulatory response.
Modernizing cross-border payment systems and reducing unintended AML/CFT barriers increasingly means focusing on transparency, interoperability, and risk-based regulation. The IMF’s work on “safe payment corridors” supports this by helping countries build trusted, secure channels for legitimate financial flows without undermining new technology. A pilot with Samoa —where de-risking has disrupted remittances—showed how targeted safeguards and collaboration with regulated providers can preserve access while maintaining financial integrity without disrupting the use of new payment platforms.
Several countries, with IMF guidance, are investing in machine learning to detect anomalies in cross-border financial flows, and others are tightening regulation of virtual asset service providers. Governments are investing in their own capacity to trace crypto transfers, and blockchain analytics firms are often employed to do that. IMF analysis of cross-border flows and the updated FATF rules are mutually reinforcing. If implemented cohesively, they can help digital efficiency coexist with financial integrity. For that to happen, legal frameworks must adapt to enable timely access to digital evidence while preserving due process. Supervisory models need to evolve to oversee both banks and nonbank financial institutions offering cross-border services. Regulators and fintechs should be partners, and sustained multilateral engagement should foster fast, cheap, transparent, and traceable cross-border payments—anchored interoperable standards that also respect privacy.
Governments must keep up. That means investing in regulatory technology, such as AI-powered transaction monitoring and blockchain analysis, and giving agencies tools and expertise to detect complex crypto schemes and synthetic identity fraud. Institutions must keep pace with criminals by hiring and retaining expert data scientists and financial crime specialists. Virtual assets must be brought under AML/CFT regulation, public-private partnerships should codevelop tools to spot emerging risks, and global standards from the FATF and the Financial Stability Board must be backed by national investments in effective AML/CFT frameworks.
Consistent and coordinated implementation is important. Fragmented efforts leave openings for criminals. Their growing technological advantage over governments threatens to undermine financial integrity, destabilize economies, weaken already fragile institutions, and erode public trust in systems meant to ensure safety and fairness. As crime rings adopt and adapt emerging technologies to outpace enforcement, the cost is not only fiscal—it is structural and systemic. Governments can’t wait. The criminals won’t.

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Analysis

Multilateral development banks reaffirm commitment to climate finance, pledge innovative funding for adaptation

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3 weeks ago

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November 13, 2025

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Multilateral development banks have reaffirmed their commitment to climate finance, pledging to scale up innovative funding to boost climate adaptation and resilience. “Financing climate resilience is not a cost, but an investment.” This was the key message from senior MDB officials at the end of a side event organised by the Climate Investment Funds (CIF) on the opening day of the 30th United Nations Climate Conference (COP30) in Belém, Brazil.

The conference runs from 10 to 21 November. During a panel discussion titled “Accelerating large-scale climate change adaptation,” MDB representatives, including the African Development Bank Group, outlined how their institutions are fulfilling Paris Agreement commitments by mobilising substantial and innovative resources for climate adaptation and mitigation. Ilan Goldfajn, President of the Inter-American Development Bank Group, emphasised that “resilience is more than a concern for the future: it is also essential for development today.” He announced that MDBs are tripling their financing for resilience over the next decade, targeting $42 billion by 2030.

“At the Inter-American Development Bank, we are turning preparedness into protection and resilience into opportunity,” Goldfajn added. Tanja Faller, Director of Technical Evaluation and Monitoring at the Council of Europe Development Bank, stressed that climate change “not only creates new threats, but also amplifies existing inequalities. The most socially vulnerable people are the hardest hit and the last to recover. This is how a climate crisis also becomes a social crisis.” Representatives from the Islamic Development Bank, the Asian Infrastructure Investment Bank, the Asian Development Bank, the World Bank Group, the European Bank for Reconstruction and Development,  the European Investment Bank, the New Development Bank and IDB Invest (the private sector arm of the Inter-American Development Bank Group) also shared concrete examples of successful adaptation investments and strategies for mobilising new resources.

Kevin Kariuki, Vice President of the African Development Bank Group in charge of Power, Energy, Climate and Green Growth, presented the Bank’s leadership in advancing climate adaptation and mitigation. “At the African Development Bank, we understand the priorities of our countries: adaptation and mitigation are at the heart of our climate interventions.” He highlighted the creation of the Climate Action Window, a new financing mechanism under the African Development Fund, the Bank Group’s concessional window for low-income countries.

“The African Development Bank is the only multilateral development bank with a portfolio of adaptation projects ready for investment through the Climate Action Window,” Kariuki noted, adding that Germany, the United Kingdom and Switzerland are among key co-financing partners. Kariuki also showcased the Bank’s YouthADAPT programme, which has invested $5.4 million in 41 youth-led enterprises across 20 African countries, generating more than 10,000 jobs — 61 percent of which are led by women, and mobilising an additional $7 million in private and donor funding.

Representatives from Zambia, Mozambique and Jamaica also shared local perspectives on the financing needs of communities most exposed to climate risk. The panel followed the official opening of COP30, marked by a passionate appeal from Brazilian President Luiz Inácio Lula da Silva for greater climate investment to prevent a “tragedy for humanity.”

“Without the Paris Agreement, we would see a 4–5°C increase in global temperatures,” Lula warned. “Our call to action is based on three pillars: honouring commitments; accelerating public action with a roadmap enabling humanity to move away from fossil fuels and deforestation; and placing humanity at the heart of the climate action programme: thousands of people are living in poverty and deprivation as a result of climate change. The climate emergency is a crisis of inequality,” he continued.

“We must build a future that is not doomed to tragedy. We must ensure that we live in a world where we can still dream.” Outgoing COP President Mukhtar Babayevn, Azerbaijan’s Minister of Ecology, urged developed nations to fulfil their promises made at the Baku Conference, including commitments to mobilise $300 billion in climate finance. He called for stronger political will and multilateral cooperation, before handing over the COP presidency to Brazilian diplomat André Corrêa do Lago, who now leads the negotiations.

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