Business Hilights
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Chronic loan defaulters’ colluding with security agencies to kill banks—CEOs

Strong indication has emerged showing that chronic bank loan defaulters have devised a dangerous means of engulfing bank chief executives in campaign of calumny laced with momentary disturbances with hired government security agencies to gag and cause frustrations in going after them for the unpaid debts.
However, coming under the umbrella known as Committee of Banks’ Chief Executive Officers in Nigerian (CBCEON), managers of financial institutions have in response, come up with their own strategy to match the influential loan defaulters.
Rising from a strategy meeting in Lagos recently, CBCEON first sought the collective assurance of security agencies including the Police, SSS, anti-graft agencies and others to rather than partnering with loan defaulters in smearing them, cooperate and collaborate to identify and go tougher on chronic debt defaulters so as to save the banking system to the advantage of all.
Having secured the needed support from the security agencies, the Committee in a communiqué made available to Business Hilights averred that “beyond publishing names of chronic loan defaulters in national media (which is inevitable), all banks chief executives are now speaking with one voice, sharing information about those entities, and refusing to do further business with them until they settled their obligations”.
Recall that the Asset Management Corporation had recently published a list of defaulters that it termed as delinquent debtors. They allegedly owed about N906.1bn.
The CEOs revealed further that none of their members will fall again to the smear campaigns of loan defaulters, who had been using the evil strategy to either delay repaying loans or avoid meeting their debt obligations completely.
The CBCEON meeting which reviewed what banks described as ‘harassment and criminalisation of banks’ CEOs by law enforcement agencies,’ disclosed that the trick deployed by chronic bank debtors which is enlisting law enforcement agencies including police, judiciary and state securities to harass and criminalise banks’ CEO is not only unacceptable, but now, cannot deter the activities of CBCEON.
The group recalled that the debtors are in the habit of swinging to blurred court processes as well as using social media to propagate their smear campaign against the banks whenever they notice that use of security agencies are no more working for them.
CBCEON noted that unless the embarrassing trend is checked with the assistance of the government, the industry may be pushed into collapse as it happened about a decade ago.
The bank CEO argued the emerging trend of illegally challenging efforts to recover debts by loan defaulters have impeded drives to close the gaps of nonperforming loans (NPLs) in the last few years.
Details from the National Bureau of Statistics (NBS) showed that as of the end of September 2018, Nigerian bank’s non-performing loans stood at N2.245tn.
Within the period under review, Nigeria’s gross loans stood at N15.861tn, while loans (after specific provisions) stood at N13.332tn.
The NBS report also noted that even as of the end of June last year, non-performing loans stood at N1.939tn while gross loans and loans (after specific provisions) were N15.50tn and N13.587tn respectively.