Crack Down After MTN, Stanbic, Buhari's Nigeria hammers UBA

UBA is the fourth major company to run foul of Nigerian regulators this week – fined $15m for failing to meet president and central bank's deadline.

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NIGERIA is continuing to show signs that it is being led by a President Muhammadu Buhari who was elected to power on the reputation of a disciplinarian and no-nonsense leader.

In the latest revelation, United Bank for Africa Plc, the lender operating in 19 countries on the continent, was penalised by the Central Bank of Nigeria for delays in the transferring of deposits of government institutions to its account with the regulator.

The Lagos-based bank received a penalty of 2.9 billion naira ($15 million) or 5% of a balance of the deposits of 58.8 billion naira as of Oct. 15, UBA said Friday in a statement posted on the Nigerian Stock Exchange website. The bank’s management are in discussion with the central bank over the penalty, according to the statement.

President Muhammadu Buhari and central bank Governor Godwin Emefiele gave lenders until Sept. 15 to move funds for state-owned bodies to the Treasury Single Account at the central bank in a move designed to clamp down on corruption and financial waste in the public sector. Interbank rates jumped before the deadline as banks sought cash.  (READ: The fear of Buhari whips Nigeria into shape - and Africa just might be carried along with it).

Fewer than half the deposits had been transferred to the central bank a week later, according to Chibuike Uche, a member of the Monetary Policy Committee.

UBA is the fourth major company to run foul of Nigerian regulators this week. First Bank of Nigeria Ltd., Nigeria’s largest lender by assets, on Thursday was also fined by the central bank for the same offence as UBA.

South Africa’s MTN Group Ltd. is also contesting a record $5.2 billion fine imposed on its local subsidiary for failing to disconnect customers with unregistered SIM cards. (READ: Buhari’s Nigeria: Tough day at office for SA multinationals as MTN hit with record fine; bank directors shut out).

A separate financial regulator ordered the suspension of the chief executive officer and chairman of Stanbic IBTC Holdings Plc, the Nigerian subsidiary of Standard Bank Group Ltd., after accusing the company of posting misleading statements over two years. Stanbic denies the allegations and says its directors remain in their jobs.

-Bloomberg

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