Fresh fears over economy as HSBC, UBS leave Nigeria

federal government, NigeriaTWO giant world banking groups, HSBC and UBS, have closed their offices in Nigeria, the Central Bank of Nigeria (CBN) said in a report on Friday as it revealed foreign investment had fallen sharply from a year ago, Reuters reported on Friday.

The bank said foreign direct investment in Nigeria fell to N379.84 billion ($1.2 billion) in the first half of the year from N532.63 billion ($1.7 billion) a year earlier.

It did not give reasons for the bank closures.

HSBC was not available to comment and UBS declined to comment.

The CBN said the outlook for the Nigerian economy in the second half was “optimistic” given higher oil prices and production but rising foreign debt and uncertainty surrounding the 2019 presidential election were a drawback.

Investor confidence in the West African country has been shaken since the central bank in August ordered MTN to bring back $8.1 billion to the country, part of profits which the South African telecoms firm sent abroad.

An HSBC research note dated July 18 said a second Buhari term “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.”

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Loan losses

The central bank also said three lenders failed to meet its minimum liquidity ratio of 30 percent without naming them.

It added that non-performing loans (NPLs) have dropped to 12.4 percent as at June 2018 from 15 percent a year ago, still a long way above its five percent threshold.

“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,” it said in the report.

In September, the regulator withdrew the license of Skye Bank for failing to recapitalise. It then transferred Skye’s assets to a “bridge bank” Polaris wholly-owned by the state-backed asset management company AMCON.

Nigerian banks have been trying to raise fresh capital after huge loan losses worsened by an economy that has just emerged from a recession.

Diamond Bank last week denied it was in talks with investors to raise cash but said it was managing its capital, which borders on the regulatory minimum, to grow.

Another lender, Unity Bank, has been seeking to raise fresh funds to recapitalise.

  1. Sagmo Live says

    Please, get a life!

  2. Ohinebo Aigbogun says

    Is our desperado power hungry Mr integrity Buhari aware of these latest disasters? Let the foolish one’s continued to sai baba say Buhari till they are consumed by poverty.

  3. Akinpelu Akintola says

    Afolabi Kolawole

  4. Zulkiflu Danladi Yahaya says

    Abeg let them return everything before the leave.

  5. Balogun Isaac says

    When cluelessness is at the helms of affairs.

  6. Olalekan Yusuf says

    But of course, the #Hailers are not sound in economics and/or allied issues. To them, this news is considered “another campaign of hatred” against their Aboki.

  7. Victor Ukandu says

    How I wish some people will understand the grave implications of HSBC withdrawal before they start to comment rubbish.

  8. Olalekan Yusuf says

    Return what exactly?
    They’ll be taking everything that belongs to them and our economy will continue to tank!

  9. Hamza Usman says

    They have left because it’s no longer business as usual that the era of looting and plundering of public fund has been stopped.

  10. Martyns Darlyn says

    How did they brainwashed you people? Do you know implication of them leaving Nigeria? Do you know is a wrong signal to foreign investors

  11. HSBC will leave now, when the rate of patronage of their customers who they launder money for has declined sharply.

    Let them gerrout of Nigeria, they’re part of the cleaning up/out that needs to be done.

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  13. Chukwuemeka Ijere says

    They are going because this is the best government with low brain, clueless,directionless, childish, awkward etc

  14. Jauro Sadiq says

    No looted money to syphon now.

  15. Jauro Sadiq says

    No looted funds to syphon now.

  16. Obadele Adewale Oluwole says

    Is it because of economy or of unknown outcome of next election. Why do press or writer like given fake and wrong news. O ga o

  17. Kelvin Ademeso says

    Please where are these banks in Nigeria because I have never seen them in lagos ?

  18. Oseni Olumide says

    Jauro Sadiq After more than 2000 years of civilization, is this what you can come up with?
    Ignorance is really a disease

Comments are closed.

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