I never told banks to reduce workers – Lamido

We’ve had this “Sanusi tsunami” through the banking system. After the drama, now you’re trying to piece this system back together. Are we now moving on or are you still fighting the same battle you were fighting at the start? I think the battle will continue to the extent that battles are fought on two […]

We’ve had this “Sanusi tsunami” through the banking system. After the drama, now you’re trying to piece this system back together. Are we now moving on or are you still fighting the same battle you were fighting at the start?

I think the battle will continue to the extent that battles are fought on two fronts at the end of the day. You’ve got two parties. You don’t just toss something like this and walk away from it. They are not going to let you walk away. They are not going to walk into jail. So once you start this, you are in a fight until the end. For me, and I’ve said this over and over again, some of what you’ve seen in banking is just symptomatic of all that is wrong with the country.

Just elaborate on that a little bit…

If you take the abuse of office, if you take the corruption, if you take the impunity with which the rich do break the law, it’s something that happens across the board. The people you are dealing with are not isolated individuals. They are part of a group. They are part of a caste.

They’ve got allies in politics. They’ve got allies in bureaucracy. And their allies work with them and they stick together. So it’s never easy to just say you are dealing with these CEOs [who were fired and face criminal charges] and that’s the end of it. You’ve got to realise, it would be very and I’ve to think that all the people who have been beneficiaries of their largesse, the political parties that have received donations, the politicians that have been funded, the sentry consultants and contractors that are around them, it would be very and I’ve to think that they are just going to watch you basically cut off what they see as a major source of financing.

Is active resistance then from all those quarters to what you’re doing?

Yes. I mean, you feel it. You feel it in the newspapers. You feel it in the kinds of roadblocks that people are trying to throw in your way.

Do you think one person could change Nigeria?

I’m not even sure that I’m one person because look at the kinds of things that are happening, for example. Take the extraordinary support of the president. It wouldn’t really be correct to say that this is one person. What we have done, for instance, we couldn’t have done without a president who says I will give you support. You show him the facts, told him that this is the situation and we really need to do something about it and he says go ahead. And he sticks to it in spite of whatever pressures he comes under.

But the president, of course, has been sick and out of the country for three weeks. That support, presumably, isn’t there at the moment.

It is. He’s still the president. I’m assuming that I have the support of the presidency. No one has signalled otherwise. Frankly, for me, I will continue doing what I’m doing and continue to at the best of my abilities.

Whether the support will continue, I know that up to this point I’ve had no reason to think that that support has waned.

But the support of the president has been very important to what you’re doing.

Naturally it is. The support has been important. Political support is important to the success of whatever we want to achieve, precisely because the central bank needs other agencies of the government. We need legislation at times. We need the EFCC. We need the police. We need the state security services. We need physical protection for ourselves against anybody who may want to take.

Have you increased your own security?

Well, the government did.

The government decided you needed more security?

Yes. From the very beginning, the president decided that there was no point taking chances. It was from August 14th [the date of the first bail-out and dismissal of executives]. He basically just asked that the security around me be increased.

If I want to buy a Nigerian bank would I have had to run a bank in Africa before?

No, I don’t think so. I think once it can be established that if it’s a bank, it’s a strong bank, it should be fine because then they know what it takes to run a bank.

And is there scope for internal consolidation as well, for strong Nigerian banks?

Yes, a number of banks have expressed an interest. Some of them probably don’t have the capital at the moment. One of the models that seems to be gaining currency is the possibility of a foreign bank coming into an unaffected Nigerian bank, and then using that as a stepping stone to acquire one of the troubled banks.

And that is another thing that is in discussion?

There are one or two cases of possibilities of that happening.

Do you have a rough sense of time when you might want to get around to this technical bid process?

It’s on. I think that we should be able by early next year to have a list we’ve basically told people that would like to have expressions of interest in by January. The advisors will tell us these are the people that express an interest in these institutions and in our view this should be your preferred partner or this should be your next preferred partner. And then we can go and either say go ahead and talk to them and see.

And how many foreign banks have expressed interest?

I don’t have an exact number now. I’m aware that [the advisors] have talked to about four banks, I think. And they’ve also had a few investor groups who have said that they would like to come in.

What about how these banks are being run at the moment? Are they reporting personally to you, these MDs?   

No.

But have you issued any instructions? Did you, for instance, tell those banks to sell their private planes? Did you tell them to reduce jobs?

No, I didn’t. The relationship between the regulator and operator sometimes works on the basis of moral suasion. The private jet thing became a big issue in the market. In some institutions they will tell you they’ve got offices across regions, sometimes they travel, and it’s convenient to have these jets and the costs are not very high. But the jets had become a symbol of ostentation, of waste, especially in an environment where you’ve got so much poverty.

I never, in a formal meeting, said to anybody to sell. But I think the signal was out there; it was very clear that I thought it to be a responsible thing to stop it. And I believe a few of the banks, maybe all the banks, decided that it would be a proper thing to do it, and they did it.

On reducing workers, I never did. These are privately run organisations. I think what you are referring to all this issue with labour. What happened was one of the banks in which we appointed a managing director wrote to the bank supervision department and said they had a problem, that their wage bill was almost N5bn a month. Meanwhile their loans were non-accrual. They were not earning anywhere near enough to cover that cost. And therefore the hole was getting deeper and deeper. And the relationship officer in banking supervision then wrote to them in response and advised them to look at cost management, staff cost management, with the possibility of reducing salaries or reducing headcount because they were not earning what they thought they were earning.

There have been mistakes along the way, inaccuracies in the debtors’ list or what have you. Has it all gone according to plan?

It’s gone wholly according to plan. I think the mistakes that have been made are not mistakes of principle, and they are not mistakes that are due, let’s say, to a lack of diligence. There has been collateral damage. I’ll give you a few examples. We’ve had names that were published as directors of companies and they had left the board, but the records of banks did not show that they had resigned. And when people came to us and said look, we have letters, we resigned from this company, we’ve actually filed; when this came to the commission we have promptly apologised and said well, we regret it, but this is the information that we had from the banks. Within the grand scheme of things we’re not perfect and we do acknowledge that maybe one or two things could have been done better. I haven’t seen anything that I would have done differently.

Didn’t you have to reverse course over removing Mike Adenuga from the board of Equatorial Trust Bank?

Yes, but that wasn’t about making a mistake at all; it was about a negotiation process that followed his removal. I had to make a number of judgements. I’ll tell you what the judgements were. ETB as a bank, accounts for less than 1 per cent of total market.

When you net out the part of the business that is related to Adenuga’s own companies it was about 0.5 per cent. How much energy are we to dissipate on that bank? It was unlisted, it therefore had no capital market related issues, no capital market manipulations, it didn’t have any margin loans, the number of loans were significantly associated with companies owned by Adenuga, he agreed to make immediate payments; I think so far he has paid down Naira 26bn. We did turn those into performing loans. He committed to re-capitalise the institution to dilute his ownership and move very quickly, under our own guidance, into an M&A arrangement, on the condition he accepted our own appointed management to remain in place.

What about the other people who are beyond your control? The obvious case is [former Intercontinental boss] Erastus Akingbola, who is in London or West Africa or wherever he is…

Yes, but he is not beyond our control. He will come back.

You will have seen the websites touting you for the presidency…

No, I haven’t, honestly.

Do you have any presidential ambitions?

No, I don’t. I have ambitions to be the emir of Kano.