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Shareholders under the aegis of Progressive Shareholders Association of Nigeria and Renaissance Shareholders Association have blamed Central Bank of Nigeria (CBN) for not sanctioning some banks Chief Executive Officer over increased Non performing Loan (NPL) ratio above regulatory threshold.
The CBN’s NPL ratio was pegged at five per cent with some leading commercial banks recording an average of 10 per cent in 2016.
According to nationalwire checks, First Bank of Nigeria Holdings Plc’s NPL ratio hits 24.4 per cent in 2016 from 18.1 per cent in 2015.
Union Bank of Nigeria in 2016 reported 6.91 per cent NPL ratio as against 6.67 per cent in 2015 while Unity Bank Plc’s NPL ratio was the highest in the banking sector last year. Unity Bank had reported 97 per cent NPL ratio in 2016 as against 77 per cent in 2015.
In addition, Stanbic IBTC Holdings Plc reported 6.6 per cent NPL ratio in 2016 from 8.5 per cent in 2015.
However, the shareholders expressed that increased NPL ratio in the banking sector in eroding shareholders return and diminishing the nation’s economy as banks cannot avoid to lend to the real sector.
They further said the CBN has not helped matters by not blacklisting those debtors and enforcing policies that mandate debt recovery.
The President, Progressive Shareholders Association of Nigeria, Boniface Okezie said, “Shareholders of the above banks cannot do anything because they were not there when those loans were given.
“In the first place banks are meant to give loans to customers but they don’t service these loans because they see it as national cake. For you to grow the economy, you need to give loans because without loans, you cannot grow your business.
“If you don’t pay these loans, banks may not be in business. Don’t forget that these loans are from depositors and shareholders’ fund. At the end of the day, there is nothing to appropriate to shareholders in form of dividend.
“For instance, if you borrow from Unity Bank and have not paid, there is no way you can go to UBA to get loan again. CBN should make it mandatory that a customer that is indebted to one bank cannot go to another bank to access facilities.
“CBN has not helped matters by not blacklisting those debtors. The onus lies with CBN because they are the apex banking industry to stop these chronic borrowers”, he stated.
Also speaking, Chairman, Renaissance Shareholders Association, Olufemi Timothy, said, “When you are talking of this issue, you have to talk about the regulator. They have more power to do things than the ordinary minority shareholders. Minority shareholders are powerless, we may have voice but the management and major shareholders will have their ways.
“That is why the power of shareholders are very limited. The CBN is aware of this development and they have the records because they are the inspectors. The problems shareholders are having today are the regulators. If they are doing their job, the minority shareholders will just be like the whistle blower and when you blow whistle but nobody is listening, there is nothing we can do.
“We have complained but you know with the Nigerian system, we don’t have the power to remove Directors. The power we have is just on paper.
“This is why we can only be murmuring, we don’t have the real power. That is why investors have lost confidence in the market. The market is only thriving on manipulation and the regulators have collaborated. And once they have been settled, they will be manipulated. So, where do you get the Corporate Governance?” he added.
