Date Published: 08/16/09

Exposed: Cecilia Ibru, others forged bank earnings

Cecilia Ibru

Share and earnings falsification, manipulation of growth and stability indicators are being fingered as the reason for the removal of some Nigeria’s high profile banking operators at the weekend. Personal misfortunes are also mentioned.

Many of the Directors of affected banks had lingering unresolved issues with the new helmsman at CBN, Mr. Sanusi Lamido who had warned and indicated then that the banks would be thoroughly examined and their operative scrutinized.

Lamido’s concern was that most of them had been over-exposed to the Capital Market. FIN Bank, Oceanic Bank, Intercontinental and Zenith Bank were the four that originally came under serious scrutiny for suspected recklessness in flouting banking rules.

When they were instructed to clean their acts, their first and second quarterly reports were critically viewed and that of Oceanic bank was rejected and condemned by CBN as having been doctored and exaggerated.

The CBN therefore refused the second quarterly report of Oceanic Bank and further directed that the bank should go and get a true and duly certified 2 nd quarterly report in place of the baloney that was first submitted.

On July 30, 2009, the bank came up with their purported 2 nd quarterly report; they failed to provide the first quarterly report.

The half year report for 2009 recorded a net profit decline of Twenty Nine Percent, and gross earnings rose forty percent year on year.

Analysts and leading market watchers, expressed concern about the banks risk asset growth relative to appropriate mechanism in place to manage the risk and low level of disclosure and transparency in its financial statement.

The bottom line is that Oceanic has not been transparently honest over the years in its financial statements. The bank’s gross earnings are said to be exaggerated.

Leading international professional banking bodies had relied on wrong information to give excellence awards to the bank in the past.

The bank is allegedly notorious in share proliferation and manipulation and poor in risk management.

It is alleged to be deficient in transparency, worsening asset quality indicators which auditor commentary, net profit fluctuation using tax as a manipulative tool.

Oceanic Bank overvalued its stocks at ₦5.70Kobo as at August 3, 2009 relative to more realistic value of ₦4.15Kobo. The value yield a potential loss of twenty seven percent without disclosing the required rate of return of 19.3 percent.

Another weakness about Oceanic Bank is the widely known reputation at CBN of always window-dressing its net profit using its effective tax rate; in 2007 tax year, its effective tax rate applied was 24% and in 2008, it was 15 percent. Without, detailed explanation of how the effective rate applied was earned.

Analysts think that if the rate applied in the previous year was 24 percent, the gross net profit should be ₦8.55 billion. And earnings per share should have been 0.38Kobo instead of 0.43kobo as declared by the bank.

Oceanic Bank has never volunteered any company forecast since the Stock Exchange began forecast in September, 2008.

Beyond the personal troubles of Cecilia Ibru, many players in the Nigerian economy speculated during Friday’s removal of the Executives that the hand of Alhaji Aliko Dangote was all over the shake-up.

They alleged that Dangote may have engineered the removal of Erastus Akingbola from Intercontinental to nip a possible board challenge at the Nigerian Stock Exchange, where a battle rages on Dangote’s choice as the new President.

However, the institutional intervention of the Nigerian Apex bank, CBN, is being criticized as capable of sending wrong signals of instability to potential international investors.