2 Global Banks Reportedly Close Offices In Nigeria

The Central Bank of Nigeria on Friday, November 2, reportedly said two foreign banks, HSBC and UBS, have closed their offices in Nigeria.

According to Premium Times, the CBN also revealed that foreign investment had fallen sharply from a year ago as FDI slumped to N379.84 billion ($1.2 billion) in the first half of the year from N532.63 billion ($1.7 billion) a year earlier.

Legit.ng gathers that the apex bank also said that the outlook for the Nigerian economy in the second half was “optimistic” given increase in global oil prices and production.

It, however, added that rising foreign debt and uncertainty surrounding the 2019 presidential election was a drawback. 

The apex bank did not give reasons for the shutdown of operations of the two foreign banks in its report. 

HSBC has, however, been reportedly at loggerheads with the Nigerian government lately.

In July, a research note by the bank reportedly said a second term for President Muhammadu Buhari “raises the risk of limited economic progress and further fiscal deterioration, prolonging the stagnation of his first term, particularly if there is no move towards completing reform of the exchange rate system or fiscal adjustments that diversify government revenues away from oil.”

The government in its reaction had contested and dismissed the bank’s claims.

Meanwhile, the central bank also said three lenders failed to meet its minimum liquidity ratio of 30%. It however did not name the lenders, adding that non-performing loans (NPLs) have dropped to 12.4% as at June 2018 from 15% a year ago.

The figure is still a long way above its five percent threshold, it said.

“To further consolidate on the improvement, the Central Bank of Nigeria directed banks to intensify efforts at debt recovery, realisation of collateral for lost facilities and strengthening their risk management processes,” the report said.

Legit.ng had previously reported how the apex bank withdrew the license of Skye Bank for failing to recapitalise. It transferred Skye’s assets to a “bridge bank”, Polaris. Polaris has since begun operation.