By Niyi Olaoye
Financial experts in the country have called on Federal government of Nigeria to restore the license of Savannah Bank and allow them to re-open for operation saying that the crisis that has bedeviled the bank is political.
Depositors of Savannah Bank recently called for the intervention of the Federal Government over the inability of the bank to refund their trapped deposits.
President Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, during a telephone interview said the issue of Savannah Bank was political and that the Federal Government should restore the license of the bank and allow re-opening for operation.
According to him, Savannah Bank and Heritage Bank which was former Societe Generale Bank were in the same league of troubled banks.
“If Societe Generale Bank could be rescued by the Federal Government, Savannah Bank which had no major problem could also be treated same”.
Okezie said the CBN had caused the bank very endemic damage which is glaring even in their dilapidated assets nationwide.
Commenting on the issue, Managing Director and Chief Executive of APT Securities Limited, Mallam Kurfi Garba said the owners of Savannah Bank were given the option to re-capitalise and start operations which they failed to do.
“The only way the Federal Government can intervene in the depositor’s trapped funds, is for the bank to be either bailed out by the CBN, or to be handed over to the Nigeria Deposit Insurance Corporation (NDIC), for liquidation. NDIC being a regulator can recover loans and sell whatever assets they could lay hands upon and pay off depositors,” Mallam Kurfi said.
Analyst at Proshare had said Savanna Bank showed no obvious or remote signs of distress that could have precipitated its closure.
“The much that was disclosed was that the bank committed some infractions of extant regulations owing to its alleged non-professionalism in aspects of its operations. At the time of its forcible closure, Savannah Bank had nearly 85,000 shareholders, a share capital of N1 billion, and 118 branches. Its depositors were in their hundreds of thousands”
The license was revoked by the Central Bank of Nigeria (CBN) in February 2002. Immediately thereafter, the Nigeria Deposit Insurance Corporation (NDIC) liquidated the bank.
Commenting on the development, Joseph Oladele Sanusi, former CBN governor said the bank was axed for not having enough assets to meet liabilities and did not comply with CBN obligations, adding that the regulators had been unable to prevent further deterioration which caused anomaly in the depositor’s funds.
An investor, international resource associates of London, bought 67.35 per cent of the shares of Savannah Bank in 1999 before a new management took over on 14 April 2000.
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