- Not under criminal investigation by EFCC
- Saraki’s shares diluted from 11 per cent to less than 1 per cent
Battling unrelenting social media
attacks, suggesting insolvency, the Managing Director/Chief Executive
Officer of Heritage Bank Plc, Mr. Ifie Sekibo, yesterday said the
commercial bank was safe, sound and liquid.
Sekibo spoke to THISDAY in Lagos and
assured all customers of the bank of the safety of their funds,
promising that the young financial institution would not compromise on
its quality services at all time.
The bank CEO, who also explained the
involvement of the Senate President, Dr. Bukola Saraki, with the bank,
said the politician’s shares had been diluted.
Sekibo also denied that he was being
investigated by the Economic and Financial Crimes Commission (EFCC) for
any crime, explaining that the anti-graft agency only called him to
clarify a transaction by Enterprise Bank, which Heritage Bank acquired
in 2014.
Clarifying the liquidity status of his
bank, Sekibo said although the initial take-off of the Treasury Single
Account (TSA) affected the liquidity level of the banking industry, the
situation could not be termed illiquidity.
He explained: “We are strong as a
financial institution, we have very good shareholders’ fund, we are
profitable and we would remain profitable. Customers’ deposits are safe
and there is nothing wrong with the bank. We meet every obligation and
we are a service company in the business of banking. The customer is
priority and customers’ safety influences our decision and we are
destined for great things.”
He said in spite of the harsh economic
recession in the country that the banking industry had had its own fair
share of its negative effects, Heritage Bank remained liquid and able to
meet its obligations to its customers
According to him, “It is not true that
we are illiquid, we have always been liquid. It is true that the whole
industry faced some form of liquidity challenge when we all moved monies
into the Treasury Single Account. So, a customer makes a request
overnight for N2 billion or N3 billion, and you tell him to allow you
pay him over two days, and they shout, thinking it is illiquidity. It is
not! It has to do with the management of your liquidity position.”
Sekibo protested negative media reports,
particularly the social media that had given the impression that the
bank was challenged.
“But we dare to say that since June that
this negative press started and till today, our doors have not closed
for one day,” he said firmly, adding: “Every customer that comes in,
gets his money.”
Admitting that there were moments when
payments were delayed for a few hours, he said this was normal in
banking when liquidity had to be managed.
“Naturally, you gauge your inflows and
outflows and know how to manage them. And if anybody would look at it,
we have over this period because of the negative press, not that the
negative press are true, raising people’s anxiety, some took their money
away from the bank, and when they found out that nothing happened to
the bank, they brought back their monies,” he said.
Sekibo explained: “In that outflow
period, over N300 billion left our system and came back into our system,
because people have realised that it is all false. First, they said the
next bank the Central Bank of Nigeria (CBN) would take over was going
to be Heritage Bank. It is not true! The central bank cleared that
issue. Again, some people believe that if you don’t sell foreign
exchange (FX) to them, then you are illiquid.”
The Heritage Bank boss, who noted that
FX scarcity is a general problem in the industry, stated that the fact
that a bank was not able to source the amount of FX demanded by a
customer, either from the central bank or other sources, did not mean
the bank had liquidity problem.
Sekibo traced the bad press suffered by
the bank in recent times to its acquisition of Enterprise Bank, but he
insisted that the board of Heritage Bank had no regret for the
transaction.
According to him, “We made a wise
business decision to acquire Enterprise Bank and we have not regretted
that decision because we have been able to leverage on the 160 branch
network of the defunct bank. I must, however, add here that although the
acquisition remains one of our remarkable business decisions, the
challenge we have is with the people whom we inherited.
“When we acquired the bank, we ensured
that we retained its workforce and integrated them into ours at a time
we had just 11 branches. We said after a year we would evaluate these
staff and those who don’t identify and can’t fit into our overall
business vision would have to go. We have concluded that now and each
time we want to implement this key business decision, we begin to
experience a lot of negative press reports. This is more than a
coincidence.”
On Saraki’s status with the bank, he
explained: “When our group of investors approached the owners of the
defunct Societe Generale Bank of Nigeria (SGBN) and the Central Bank of
Nigeria (CBN) to buy and resuscitate it, it was agreed that as core
investors, we were allowed 80 per cent of the shares, the original
owners, including Saraki were allowed 11 per cent and depositors had
nine per cent.
“When we decided to go public through
private placement, Saraki’s shares were further reduced to 4 per cent
and at the very last public offer his shares and those of his group of
earlier investors further reduced to less than one per cent. This is
because Saraki did not buy any additional shares to add to his portfolio
and so his shares gradually have diluted to less than one per cent.”
He also said the allegation that he was
under investigation by the EFCC over money laundering was false, saying
he had never been invited by the agency over such matter.
Sekibo, however, admitted that he had,
alongside other banks’ CEOs visited the commission in connection with
the Nigerian National Petroleum Corporation (NNPC) FX account totalling
$85 million previously lodged with Enterprise Bank, which they had
acquired.
“That transaction happened in 2012, and
as at 2012, I was not even an MD of a bank. I couldn’t have laundered
money I was not part of,” he explained.
On the bank’s alleged inability to fund
the foreign exchange needs of its customers, the managing director said
the situation was exaggerated.
“So, somebody saying if you don’t sell
FX, that means you are illiquid, it doesn’t add up that way. Are my
customers who have domiciliary accounts with me satisfied? Yes they are.
Am I able to fund Letters of Credit (LCs) that are legitimate? Yes, I
am. Am I able to give credit to customers that need them? Yes I am,” he
said.
He added: “So, if I am doing all these,
natural banking and traditional banking, where then is the illiquidity
that anybody is talking about. Naturally, when people hear that there is
a problem, they rush to the doors of the bank and even the slightest
service failures could make people believe it is true. But when you
correct the service failure and naturally everything is going on well,
then you ask, where is this story coming from?
“So, we are saying there is no such
thing as illiquidity and we are not insolvent. We are very liquid, we
are meeting our obligation and we would continue to meet our
obligations. No bank today can say every customer that comes into their
banking hall, they can pay them all. And when you have a challenging
situation like we have today, the chances are that there would be gaps
here and there, but in the long-run, you meet your obligation and pay
them, which is most important to the customers.”
Sekibo threw more light on the
allegation that his bank had been relying heavily on funding from the
interbank market, saying the bank had never been out of the clearing
house since it opened for business.
“In today’s market, if I have to take
money from bank B, I would give them treasury bills in replacement. It
is a treasury play. If I say bank A, give me N1 billion, I must give
bank A N1 billion worth of treasury bills. That is in lieu of cash. When
I get my cash, I return back my N1 billon and collect back my treasury
bills and keep. When they don’t have, they would give me same treasury
bills and I give them cash. That is what the interbank market is all
about.
“Now, some banks have relationship
with other banks that don’t require them to give treasury bills, just
the money. We call that clean lines. As a new bank, I don’t have a clean
line with anybody. So, every bank that gives me N1, I give them
corresponding treasury bills, which means I must be strong. So, while
you call it borrowing, for us, it is a treasury play,” he said.
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