In February, after repaying a multi-million dollar Merrill Lynch facility, Intercontinental Bank Nigeria Plc announced that it had secured a 50 million Euro loan from the European Investment Bank, an AAA-rated financial institution. According to the bank's CEO, Mr Erastus Akingbola, the facility was to be used to finance projects in the health and education sectors. As the global financial crisis began to savage African financial markets, Akingbola would later say that this loan was a strong endorsement of the bank from a top-rated international financial institution.
However, an investigation by Dayo Coker, a Lagos-based blogger and financial analyst has revealed how Intercontinental Bank brazenly misled its clients, investors and the general public by claiming that it obtained the EIB facility in 2009 after the onset of the financial crisis. In an email to Dayo Coker, Clifford Una, the Press Officer of the European Investment Bank, EIB, confirmed that the EIB and Intercontinental Bank had signed the loan agreement in 2007, well before the near collapse of global financial markets. Mr Una also added that "to date, no allocations have been made under this loan and therefore, none of the agreed loan amount has been disbursed to date."
It is now obvious that Intercontinental Bank, in a bid to shore up consumer confidence after several bad loans had become public, decided to misrepresent the timing of a facility it received two years ago. A more damning revelation is the bank's decision to ignore a facility that was meant to strengthen Nigeria's SME sector by leaving it untapped till date. For two years, Intercontinental bank did not access this loan and its managers only remembered to use it as a public relations stunt when rumours of instability began swirling around their institution.
This shows beyond doubt that Intercontinental Bank's leadership is ethically challenged and guilty of misinforming the Nigerian public. Its handling of the facility also illustrates a high degree of incompetence and ineptitude. Any bank that lies to its own customers is not worthy of their patronage.
It is time for the regulatory authorities to shake off their lethargy, perform their oversight functions and expose the Madoffs operating in the Nigerian financial system. The local press hasn’t been very helpful either. Rather, than launch independent investigations to ascertain the bank’s true position, they have been content to sit back and pad their publications with lucrative advertisements in exchange for dubious editorials and hagiographic columns.
A bank no matter how big can fall if it is not properly managed.
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