CBN investigates banks after EFCC disclosure
By Jeph Ajobaju, Chief Copy Editor
Banks are being investigated by the Central Bank of Nigeria (CBN) to sanction violators of rules and guidelines and ensure compliance with them, coming a week after the Economic and Financial Crimes Commission (EFCC) disclosed 70 per cent of financial corruption is perpetrated by banks.
Former CBN Deputy Governor Kingsley Moghalu also argued on Arise TV last week the new CBN top brass should sack the Chief Executive Officers (CEOs) of banks found to have broken the rules.
“When you sack one or two bank CEOs, others will sit up. This was what we did [when we were at the helm at the CBN], so it’s not a theory,” Moghalu stressed.
Financial industry sources disclosed the CBN has rejigged its surveillance mechanism to fully focus on banks’ financial statements and audit reports that will now pass through multi-level examinations.
One of the sources said the delay in the submission of the audited reports and accounts of many banks for 2023 may be connected with the rigorous screening of the financial statements by the CBN.
Banks that have approved their audited results and submitted them for onward examination and approval by the CBN since January are still awaiting final approval.
Banks cannot make public their audited reports and accounts without prior and final approval of the CBN.
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Default of NGX corporate governance rules
Delay in the release of their results has put them in default of the corporate governance rules of the Nigerian Exchange (NGX) where most banks are listed.
Spokesmen for two major banks confirmed they are waiting for CBN approval of their results, per reporting by The Nation.
Post-listing rules at the NGX provide two compliance options for the submission of results. Most quoted companies including all banks, major manufacturers, oil and gas companies, breweries and cement companies use the 12-month Gregorian calendar year as their business year.
Under the first option, companies are required to submit interim or unaudited quarterly reports not later than 30 calendar days after the end of the quarter. Such companies then have extended 90 days to submit their full-year audited reports and accounts.
However, where a company chooses to audit its quarterly accounts, it shall be required to file such accounts not later than 60 calendar days after the quarter.
For the first set of companies, the deadline for the submission of audited report and accounts for the year ended 31 December 2023 is 30 March 2024.
Many banks, including Jaiz, Fidelity, and FBN Holdings, adopted this option and submitted their interim results for the fourth quarter ended 31 December 2023 (Q4 2023).
The deadline for the second set of companies, where several major banks belong, was 29 February 2024.
The rules allow the NGX to grant specific waivers to relevant companies or a general waiver of the deadline under some specific circumstances, but records show the NGX has not issued any general waiver or specific, publicly announced waiver to the banks.
General waiver is usually given in the event of general disruption to industrial activities such as strikes, national crises, many public holidays and other circumstances that in the judgment of the Exchange may significantly impact the timeline given to companies to prepare and submit the quarterly report.
The banks completed their internal approval process and transmitted their results to the CBN about 40 days ago but are still awaiting its approval.