- Not under criminal investigation by EFCC
- Saraki’s shares diluted from 11 per cent to less than 1 per cent
By Joseph Ushigiale, Chika Amanze-Nwachuku and Obinna Chima
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.