Intercontinental Bank on the verge of collapse

Intercontinental Bank, one of Nigeria’s high-flying banks is facing serious difficulties that could force it into liquidation before the end of 2009. The bank’s precarious situation is due to its huge exposure to toxic loans to stockbrokers and importers of petroleum products.

While CBN has offered a stout defence of the bank’s financial position, a detailed investigation by THE INSIDER has confirmed that Intercontinental’s net assets are dwindling by the hour. The FIRS recently stopped the bank from collecting revenue and the EFCC has invited some of the bank’s top brass over the 19 billion facility given to Alhaji Shehu Badamasi, the CEO of Tanzila Petroleum.

The bank recently tried to raise some money by increasing its minimum savings balance from 1000 to 10000 hoping to use the cash to bolster its books. The move backfired as the general public could not understand the rationale behind the directive. As people rushed to withdraw their funds, the bank shut down its systems on March 6, 2008 and later blamed it on a technological problem.

Staffers of Intercontinental are already looking for jobs in other banks as it has become obvious that only a miracle will save Erastus Akingbola’s empire. His well publicized plans to buy a Rolls Royce Phantom on his sixtieth birthday may soon have to be placed on hold as the stark reality finally dawns on him.

Yesterday’s CBN directive would have carried more weight if the agency could be trusted. Professor Soludo promised depositors before the consolidation that no depositor would lose his money after the merger process. That turned out to be a blatant lie. Sylvester Odigie, a prominent businessman still has 300 million trapped in Fortune Bank not to talk of smaller customers that cannot afford to publicize their plight on the pages of newspapers. Soludo knows that there is a 95% chance that he will not be offered a second term at the helm of the CBN so he can afford to endorse Intercontinental Bank knowing that he is on his way out.

By the way, Intercontinental Bank has developed the habit of using its“Best Bank in Nigeria” award as a cudgel. Whenever, the bank receives bad press, it reminds us that The Banker, an affiliate of The FT named it as the Bank of The Year for 2008. But the same lazy researchers at The Banker, a PR rag, said that Spring Bank was one of Nigeria’s top five banks. A few months later, Spring Bank nearly collapsed. Lesson: Awards mean nothing. Always do your own due diligence.

By the way, I received a “damage control” text message from Intercontinental Bank today. It read, “Dear esteemed customer, the minimum balance on your savings account remains N1,000. Kindly disregard our earlier SMS on the increase. We regret any inconveniences and appreciate your continued patronage.” It came too late. I’ve already cleaned out my account. I advise you to do the same.

UBA axes Prestige Bank. Remember that sexy advert with a goldfish in a bowl and the caption,“You’ll find it a little less crowded”? Well, it seems UBA’s foray into luxury banking has been short-lived. A source who spoke on the condition of anonymity says that Funmi Omitowoju, the MD of UBA Prestige Bank, could not meet her targets and was poaching customers from UBA Plc Regular. Unfortunately, Tony Elumelu doesn’t find such actions funny and the ex-MTN executive was quickly shown the way out.