Two global banks close offices in Nigeria as foreign investment falls

Global banking giants, HSBC Bank and UBS Group have shut their offices in Nigeria. In a report released by the CBN, foreign Investment into the country fell sharply to N379.84 billion ($1.2 billion) in the first half of the year from N532.63 billion ($1.7 billion) in same period last year.

The CBN noted that the outlook for the Nigerian economy in the second half was optimistic given higher oil prices and production, however, rising debt profile and uncertainty surrounding next year’s General Elections are growing concern.

It also further noted that investors confidence in Nigeria has dropped since the Apex Bank altercation with teleco-giant, MTN. Recall that the CBN in August ordered MTN to brink back $8.1 billion to the country, part of the profit which the firm has sent abroad.

Three lenders fail liquidity test

The CBN also revealed that three lenders failed to meet its minimum liquidity ratio of 30 percent. It, however, did not reveal any names. It also added that Non-Performing Loans (NPLs) have dropped to 12.4 percent as at June 2018 from 15 percent a year ago.

Banks in the country have been in a race to raise additional capital after huge loan losses affected their performances.

Recall that the CBN had withdrew the regulatory license of Skye Bank for failing to recapitalise, Diamond Bank recently denied it was in talks with with new investors to raise capital and Unity Bank is also seeking fresh capital to recapitalise.

The battle between Nigerian Government and HSBC

Although the CBN did not give reasons for HSBC decision to close its office in Nigeria, this decision has been linked to the running battle with the Federal Government over its poor rating of the present administration’s economic policies.

HSBC had in a report by its Global Research Unit noted that another re-election of President Buhari next year will spell doom for the country’s economy. The presidency had also accused the bank of laundering more than $100 million for the late Gen.Sanni Abacha in Paris, London and Geneva. The presidency also accused the the bank of laundering proceeds from corruption involving more than 50 other Nigerians.

HSBC is one of the world’s largest banking and financial services organisation with its headquarter in London while, UBS is a Swiss multinational investment bank and financial services company that provides services to clients in over 50 countries.

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Author: see naija

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