31 Aug. 2009 Atedo N A Peterside OON, Chairman of Stanbic IBTC Bank Nigeria Plc issued this statement to international bankers at the Central Bank of Nigeria Town Hall meeting with international bankers at Andaz Hotel, 40 Liverpool Street, London EC2M 7QN.
“Good Morning Ladies & Gentlemen,
I stand before you this morning to introduce Mr Sanusi Lamido Sanusi, the Governor of the Central Bank of Nigeria (CBN).
From the time I became the founding CEO of IBTC in 1989 to date, I have worked closely with five different Governors of the CBN. When IBTC was founded in February 1989, it was a small investment bank with great ideas. We were able to win lucrative advisory mandates and hire some of the most talented Nigerian bankers. By the time I resigned as CEO in September 2007 we had metamorphosed into a Universal bank, merged with Stanbic Bank post-consolidation to become Stanbic IBTC Bank PLC – a subsidiary of Standard Bank of South Africa. I was elected Chairman of Stanbic IBTC Bank on the same day I resigned as CEO in 2007. During the course of my tenor as CEO and more lately as Chairman, I have therefore witnessed the appointment of four CBN Governors and worked closely with five.
Historically, Nigeria has oscillated between appointing economists or banking/finance experts as CBN Governors.
As some of you might be aware, when Governor Lamido Sanusi’s predecessor in office – Professor Charles Soludo (an economist) was appointed in 2004, my disagreement with him on policy was so vehement that I chose to go public with it. In a published letter to him dated 12 July 2004, which appeared in The Guardian Newspaper on 21 July 2004, I pointed out that, on banking consolidation, Governor Joseph Sanusi (1999 -2004, Soludo’s predecessor) did “too little too late” and that his approach was “frustrating but not dangerous”. I then cautioned that in my opinion Governor Charles Soludo’s approach/actions translated into “, trying to do far too much and far too soon” and that we might therefore be “, swinging from one extreme to another and that is very dangerous”. As we all know, throughout his tenure, Professor Charles Soludo appeared to be pushing Nigerian banks to expand aggressively both domestically and internationally.
A few months after the advent of the current global financial crisis it became evident to all those who were discerning that a handful of Nigerian banks were in trouble. At the very least, they were guilty of bad judgement. Some say that two or three of these banks grew too big too fast and were simply destined to implode. Whatever be the case, it was clear that they had misread the severity of the economic downturn and the collapse of asset and commodity prices (including the Nigerian stock market index and crude oil prices) and had lent large sums of money to people (including some insiders) who did not have a semblance of a business plan. Their loan losses were so significant that they became clearly illiquid and became increasingly reliant on Government “life-support” via continued reliance on CBN’s expanded discount window. Weak risk management and lopsided corporate governance practices did not help either.
The Emperor had no clothes on, but CBN under Charles Soludo insisted that he was fully clothed and, indeed, threatened sanctions against any Bank CEO whose staff dared to make reference to this “open secret” that the capital of a handful of Nigerian banks was almost completely eroded. They called this “de-marketing” of the competition and even turned the clock back on greater financial disclosure and transparency.
Perhaps Governor Soludo was seeking a second term for himself before seeking clothes for the unclothed emperors?
Enter Mr Sanusi Lamido Sanusi a seasoned and knowledgeable economist and professional banker/risk manager with impeccable credentials, including, notably, integrity and a penchant for telling the truth at all times – hence his bias towards full disclosure and transparency.
I make this declaration publicly and without any hesitation because Lamido is a man I have known for over 35 years. We are both economists and professional bankers and our paths have crossed repeatedly over the years. Lamido is intelligent, bold, courageous, independent, straightforward, honest and humble.
I believe Lamido’s recent actions have also helped to provide the spark to President Umaru Yar ‘Adua’s Presidency. Our President must, of course, take the credit for having the foresight to appoint Lamido and for backing him on this important rescue mission because as we all know, DOING NOTHING WAS NO LONGER AN OPTION.
Ladies and gentlemen, I present Mr Sanusi Lamido Sanusi, Governor of the Central Bank of Nigeria.”