The Banks

[utuocha]

"Uhuru is coming! Uhuru is coming!!" Yes, "it is coming"! The positive moves on the rescued banks are yet but a tip of the iceberg! Uhuru is coming! The scales are falling off, and as this happens, investors will see clearer! These banks, as I have predicted MUST outperform the NSE this year! The bold at heart, the faithful ones will surely rejoice very soon, for uhuru is coming!

[MalamImam]

Originally Posted by utuocha

"Uhuru is coming! Uhuru is coming!!" Yes, "it is coming"! The positive moves on the rescued banks are yet but a tip of the iceberg! Uhuru is coming! The scales are falling off, and as this happens, investors will see clearer! These banks, as I have predicted MUST outperform the NSE this year! The bold at heart, the faithful ones will surely rejoice very soon, for uhuru is coming!

Welcome back wise one ... we shall take heed!

[nosa2]

Originally Posted by MalamImam

Welcome back wise one ... we shall take heed!

for those of you taking heed could you kindly let us know when you buy as well as your entry price.

[twentypercent]

Originally Posted by utuocha

"Uhuru is coming! Uhuru is coming!!" Yes, "it is coming"! The positive moves on the rescued banks are yet but a tip of the iceberg! Uhuru is coming! The scales are falling off, and as this happens, investors will see clearer! These banks, as I have predicted MUST outperform the NSE this year! The bold at heart, the faithful ones will surely rejoice very soon, for uhuru is coming!

Prophet, why don't you just reveal a little bit of the info you are basing these predictions on na? at least the people who follow your lead will sleep better at night...abeg, ejoo

[Oracle]

Originally Posted by utuocha

"Uhuru is coming! Uhuru is coming!!" Yes, "it is coming"! The positive moves on the rescued banks are yet but a tip of the iceberg! Uhuru is coming! The scales are falling off, and as this happens, investors will see clearer! These banks, as I have predicted MUST outperform the NSE this year! The bold at heart, the faithful ones will surely rejoice very soon, for uhuru is coming!

will the positive movement last?

[waaan5]

Originally Posted by MalamImam

Welcome back wise one ... we shall take heed!

Originally Posted by twentypercent

Prophet, why don't you just reveal a little bit of the info you are basing these predictions on na? at least the people who follow your lead will sleep better at night...abeg, ejoo

Malam, just out of curiosity- are you in the profit zone yet on the rescued banks with the recent rally?

[Monwowo]

Bank charges/fees

Please, I need help in selecting a bank to use for a diapora account. I would like a bank with "good" customer orientation (satisfaction) while keeping my charges reasonable. Thanks

[muranay@yahoo.com]

New CEOs assume duties in Zenith, UBA, Skye Bank today

[knightofdelta]

Originally Posted by Monwowo

Bank charges/fees

Please, I need help in selecting a bank to use for a diapora account. I would like a bank with "good" customer orientation (satisfaction) while keeping my charges reasonable. Thanks

Guaranty Trust Bank.

[Walcolm]

Originally Posted by knightofdelta

Guaranty Trust Bank.

StandardChartered is also a good place to look

[Monwowo]

Originally Posted by Walcolm

StandardChartered is also a good place to look

Thanks alot

[Waves]

Originally Posted by Monwowo

Thanks alot

KPMG Names GTBank ?Most Customer Focused Bank - Proshare

[Waves]

A useful analysis on AMCON.

[123.rado]

Originally Posted by Waves

A useful analysis on AMCON.

Haha. Whichever way we look at this, investors and shareholders of banks are in deep s**t. Starting with the 0.3% contribution of year-end total asset into the sinking (soak-way ) fund that will be used to sink bank profits (the larger the total asset of any particular bank, the more that will be paid into the fund). 10years fa?

Shareholders of any bank that is still in deep negative equity may have to give up their shares in exchange for bonds so as to recapitalise the bank. What if the shareholders refuse to make the exchange? Will they be forced or will the bank then be nationalised directly?

Who will take the cooking pot at the end of 10years or whatever time it takes to get these banks back on track? This will become a money spinning machine at the end of the day.

The main question is whether these banks are ready to give loans even when this liquidity is provided to them? Time indeed will tell.

[horlads]

Originally Posted by 123.rado

Haha. Whichever way we look at this, investors and shareholders of banks are in deep s**t. Starting with the 0.3% contribution of year-end total asset into the sinking (soak-way ) fund that will be used to sink bank profits (the larger the total asset of any particular bank, the more that will be paid into the fund). 10years fa?

Shareholders of any bank that is still in deep negative equity may have to give up their shares in exchange for bonds so as to recapitalise the bank. What if the shareholders refuse to make the exchange? Will they be forced or will the bank then be nationalised directly?

Who will take the cooking pot at the end of 10years or whatever time it takes to get these banks back on track? This will become a money spinning machine at the end of the day.

The main question is whether these banks are ready to give loans even when this liquidity is provided to them? Time indeed will tell.

Chairman, abeg take time to go over the document again. Meanwhile, let me address some issues you misinterpreted.

1.) the 0.3% of assets does not impact the bank's bottom line in anyway as the payment required by banks to NDIC will be adjusted downwards to accommodate the 0.3% to AMCON.

2.) Shareholders have a choice to sell or hold on to their shares should in case AMCON wants to buy more from retail shareholders. also, bear in mind that a number of NPLs on the books of these banks already have shares as their collateral and purchasing those NPLs automatically makes AMCON a shareholder of the banks. AMCON can then buy more from individual shareholders at a premium to the market price in which case retail shareholders can decide to sell or not.

3.) if/when AMCON becomes a shareholder of these banks, AMCON can invoke a rights issue process to get the banks back to positive equity before marketing them for take over or M&A.

4.) If there is any leftover funds after AMCON bonds has been repaid in full,the banks get the balance in proportions they contributed over the years. Remember that this was money due to NDIC in the first place in which case they have no claim....

i don't know if i've helped in any bit but the AMCON thing seems more interesting than i initially thought. I might just wait for Oceanic again at N1.60...

[123.rado]

Originally Posted by horlads

Chairman, abeg take time to go over the document again. Meanwhile, let me address some issues you misinterpreted.

1.) the 0.3% of assets does not impact the bank's bottom line in anyway as the payment required by banks to NDIC will be adjusted downwards to accommodate the 0.3% to AMCON.

2.) Shareholders have a choice to sell or hold on to their shares should in case AMCON wants to buy more from retail shareholders. also, bear in mind that a number of NPLs on the books of these banks already have shares as their collateral and purchasing those NPLs automatically makes AMCON a shareholder of the banks. AMCON can then buy more from individual shareholders at a premium to the market price in which case retail shareholders can decide to sell or not.

3.) if/when AMCON becomes a shareholder of these banks, AMCON can invoke a rights issue process to get the banks back to positive equity before marketing them for take over or M&A.

4.) If there is any leftover funds after AMCON bonds has been repaid in full,the banks get the balance in proportions they contributed over the years. Remember that this was money due to NDIC in the first place in which case they have no claim....

i don't know if i've helped in any bit but the AMCON thing seems more interesting than i initially thought. I might just wait for Oceanic again at N1.60...

Tanx for the clarification Sir.

1. My understanding is that the NDIC supposed planned gesture is just to soften/cushion the impact of the 0.3% donation/contribution to the sinking fund. If a bank's contribution of 0.3% total asset at year end amounts to N50mln and the NDIC gesture return is N5mln (since we were not given figures to work with), what impact is being softened/cushioned? NB: Numbers are for illustration purpose only.

2. Will AMCON really pay a premium to individual shareholders?

3. Marketing them for take over when the banks come to positive liquidity will still bring us back to where we are now trying to sell the banks. The difference is that they will by then be positive liquidity.

When I don't have full information about an issue, I try to look for loopholes/danger. Reading small prints has taught me a lot of lesson.

[horlads]

Originally Posted by 123.rado

Tanx for the clarification Sir.

1. My understanding is that the NDIC supposed planned gesture is just to soften/cushion the impact of the 0.3% donation/contribution to the sinking fund. If a bank's contribution of 0.3% total asset at year end amounts to N50mln and the NDIC gesture return is N5mln (since we were not given figures to work with), what impact is being softened/cushioned? NB: Numbers are for illustration purpose only.

2. Will AMCON really pay a premium to individual shareholders?

3. Marketing them for take over when the banks come to positive liquidity will still bring us back to where we are now trying to sell the banks. The difference is that they will by then be positive liquidity.

When I don't have full information about an issue, I try to look for loopholes/danger. Reading small prints has taught me a lot of lesson.

Yes, you are right with the part in bold. it is just a cushion. but then, the idea behind the whole AMCON thing is a collective effort from all stakeholders to save the troubled banks...

[muranay@yahoo.com]

Loan security, shareholders? funds to drive sale of rescued banks - latest news, breaking news, business, finance analysis, comments and views from Nigeria :: Businessday

[Oracle]

Originally Posted by horlads

Yes, you are right with the part in bold. it is just a cushion. but then, the idea behind the whole AMCON thing is a collective effort from all stakeholders to save the troubled banks...

From what I can summarize,
(1)AMCON has a life of 10 yrs
(2) AMCON would have a starting capital of N250b for purchasing of NPLs funded by CBN & FMF.
(2A)But AMCON needs N750b and so there is a funding gap.
(3)AMCON would have to purchase the NPLs in both troubled banks(union,inter,oceanic etc) and the cleared ones(FBN,UBA,FCMB,Zenith etc)
(4) AMCON start off time for pruchasing of NPLs is Q3 2010.
(5)AMCON would give 2 types of instrument to banks in exchange for their toxic assets: Cash and bonds(7 yr tenor or other tenors)
(6)Cash would be raised after the N250b start-off capital. And this cash would be used for the purchase of toxic assets from the banks,some of the cash would be used to cover for AMCON's start-up cost like premises,equipment etc and fund AMCON's reserve to meet future coupon payment.
(7)The intitial NPLs purchase would focus on equity-linked loans with proven lien on shares.
(8)Since AMCON has N500b funding gap, their bonds would just be exchanged for toxic assets of banks and doesn't need to be backed by cash(FMF guarantee is adequate).
(9) So bonds will be issued by the DMO on behalf of the AMCON to the banks, who will subscribe to it using the collateral value of their NPLs.
(10)CBN in partnership with banks will effective with their 31-dec 2010 closing asset balances, contribute 0.3% of their total assets to a sinking fund which will help fund coupon & pricipal payments by the AMCON on its bond issuances.
(11)Bank will contribute 0.3% of their year end total assets balances to fund over 10yrs(capped at N1trn), while CBN would contribute N50b annually over the same period(capped at N500b)
(12)CBN contribution would ve made into a separately dedicated sinking fund account which would be invested primarily in FGN securities. All income from this investment would be re-invested in the fund.
(13)To soften the impact on banks' balance sheets & profitability, NDIC plans to lower the deposit premiums paid by banks to it on a yearly basis.
(14) AMCON will get maximum value from its portfolio of assets over its life span(used as a collateral for the NPLs)
(15) CBN governor said in an interview that,''in cases where a deep negative equity still remains, the shareholders may have to give their shares(ordinary or preferred) to AMCON in exchange for bonds with the AMCON effectively becoming a shareholder and recapitalizing the banks in preparation for M$ A activities.
(16) AMCON will never give a shareholder cash for shares. AMCON will give bond for shareholders' shares even at premium to the market price.

My questions are these
(1)Why do we have point 12? Does it mean that even if in a particular year the money with AMCON isn't enough, they will not dip their hand into the sinking fund of CBN?
(2)WIll AMCON be biased? Will they select banks to purchase their NPLs? Will there be a structure that will prevent this bias? What if AMCOn concentrates on the cleared banks since their contribution would be highest while stiffling the breathe of the troubled?
(3)If after 10years and the bank is still in negative equity, and AMCON is the highest shareholder, will AMCON sell the bank,force a merger or acquisition.
(4)Is AMCON indirectly a way of getting shares from those executives that are still hanging on to theirs in the guise of being a solace for the troubed bank?
(5)If after 10yrs of AMCON display,a bank is still in negative equity,what then is the difference btw what the bank used to be now and what it would be in the next 10yrs.
(6)Is AMCON meant for all banks? ANd if it is,will there be a clause for pulling out when the bank doesn't like what is going on?

I think there will be more to this thing than we see/hear now.
AT the end of it, people will make money from AMCON. Cos AMCON will be a company and will be run. The bitter part is that after a bank pays all these 0.3% of total assets for 10yrs and still gets worse than it was before the AMCON was introduced, then many questions will be asked if they just used AMCON to legally stiffle the weak banks.

In short, this AMCON thing is complicated.

[123.rado]

Originally Posted by Oracle

My questions are these
(1)Why do we have point 12? Does it mean that even if in a particular year the money with AMCON isn't enough, they will not dip their hand into the sinking fund of CBN?
(2)WIll AMCON be biased? Will they select banks to purchase their NPLs? Will there be a structure that will prevent this bias? What if AMCOn concentrates on the cleared banks since their contribution would be highest while stiffling the breathe of the troubled?
(3)If after 10years and the bank is still in negative equity, and AMCON is the highest shareholder, will AMCON sell the bank,force a merger or acquisition.
(4)Is AMCON indirectly a way of getting shares from those executives that are still hanging on to theirs in the guise of being a solace for the troubed bank?
(5)If after 10yrs of AMCON display,a bank is still in negative equity,what then is the difference btw what the bank used to be now and what it would be in the next 10yrs.
(6)Is AMCON meant for all banks? ANd if it is,will there be a clause for pulling out when the bank doesn't like what is going on?

I think there will be more to this thing than we see/hear now.
AT the end of it, people will make money from AMCON. Cos AMCON will be a company and will be run. The bitter part is that after a bank pays all these 0.3% of total assets for 10yrs and still gets worse than it was before the AMCON was introduced, then many questions will be asked if they just used AMCON to legally stiffle the weak banks.

In short, this AMCON thing is complicated.

Thank you for detailing all these issues. What has been said about AMCON is not bothering us. It is what has not been said about its operation that is a cause for worry. People are being asked to wait to know how everything will operate and led to believe things will work like a miracle.Fa fa foul.

Why will the cleared banks that have less NPLs be paying huge amount from their total asset at year end into the sinking fund to bail out the troubled banks or whoever. This is like robbing Peter to pay Paul and Jack.

If the government so much as care about these banks not going down, the government should loan them money to a state where they are in positive equity, work out an interest rate on the loan with each bank if need be and monitor/nurture them till they are back on their feet. This will just be like a bank giving a loan to a company and monitoring its activities.

I think ground is being prepared for massive looting and corruption over the next coming years. The sinking fund could even be a good avenue to raise money for elections by the party in power.

@eniyanman, can you allay our fears if you have information or understand this issue better please?