October 2, 2022

Global News

…The News First With Us!

Red Alert: FCMB, Wema, Fidelity, Union Banks Now Distressed

3 min read

imageThe prevailing economic downturn in the country is taking its toll on all the sectors of the economy as players in the various segments of the Nigerian economy are all feeling the negative impact of this harsh realities. And with the banking sector actively involved in the monetary operations of the economy, Global News can authoritatively reveal that four Nigerian banks are now distressed.

These banks that are said to be in serious are Fidelity,FCMB and Union banks. Sources say the said banks are now panicky and the management of each of them are talks with the heavyweights on their various boards with a view to raise emergency funds that will shore up their books and bring them out of this financial mess.image And with the way things are going in the banks, the fate of all of the banks in question hangs in the balance as they are finding it difficult to raise the emergency intervention funds needed to salvage them.

The economic crisis facing the country has adversely affected the banking industry significantly and out of the 15 banks quoted on the Nigerian Stock Exchange, 10 have released their 2015 annual financial statements as of the March 31, 2016 regulatory deadline set by the Central Bank of Nigeria for the submission of the statements.

And of the banks that released their results, five posted sharp decline in profits, a major departure from the consistent rise in profits posted by almost all the banks in the country after the 2010 banking crisis. These banks which are now going to face serious backlashes because of their present predicament are said to be considering many face-saving measures which would not let them be completely out of business any time soon. All of them have been exposed to bad loans, naira volatility and other economic realities which have made the four of them to post a combined 80 per cent decline in their annual profits. Moreover, Union ,FCMB, Fidelity and WEMA banks have also been found to be involved in ineffective risk management practices and also recorded very low activities in 2015 due to the political transition, among other economic variables. image

The reports on the NSE website showed that Union Bank posted profit before of N18.1bn; FCMB, N2.5bn; Fidelity Bank, N14bn; and Wema Bank, N3.046bn. Put simply, these four banks grossly under-performed the market in their 2015 annual reports which were released last month after posting monumental declines in both their profit before tax and profit after tax – and this portends a grave and serious danger to their operations in the nation’s banking sector. Global News have also gathered that these banks are using the backdoor to speak to all the monetary and financial regulatory bodies to escape sanctions that can immediately put them out of business.

We also have it on good authority that board is considering many measures including closing some of their branches and mass laying off of workers in order to stay afloat for a period of time even if they have to shut their businesses any time the axes of the regulatory bodies fall on them.image Gathered that the CBN is conducting stress and comprehensive examinations for the affected bank but slowing down not to make heat up the polity and the economy that is already going through serious hardship and downturn presently.

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