The Financial Reporting Council (FRC) is investigating Stanbic IBTC over alleged wrongful disclosure of fees owed to its parent, South Africa’s Standard Bank. Reuters reported the regulator to have said on Friday.
On Thursday, Stanbic said Nigeria’s Securities and Exchange Commission (SEC) had suspended its 20.4 billion naira ($103 million) rights issue pending the outcome of regulatory inquiries, without giving details.
Jim Obaze, head of the Financial Reporting Council (FRC), said on Friday that the body in charge of registering agreements between local firms and foreign partners had refused to give Stanbic IBTC a permit for a franchise arrangement since 2011.
He said the exact amount of potentially wrongly booked fees was being investigated but it was more than the bank planned to raise with its proposed rights issue.
Stanbic IBTC shares, which have fallen 12.4 percent so far this year, shed 4.9 percent to 22.48 naira on the news of the FRC investigation.
“Stanbic IBTC is a fully compliant and responsible organisation which operates in accordance with international best practices,” the bank said in a statement.
“Stanbic IBTC has not and will never make any international remittance without due approvals from the National Office for Technology Acquisition and Promotion (NOTAP),” it said.
Obaze said the regulator might sanction Stanbic IBTC and compel the bank to re-issue its 2014 accounts if found guilty.
Meanwhile, Nigeria’s interbank lending rates fell 75 basis points to an average of 6.50 percent on Friday from 8.25 percent last week, as cash built up in the banking system.
Traders said about 101 billion naira in matured treasury bills was repaid on Thursday and 45 billion naira in cash-reserve-requirement refunds also flowed into the banking system. The greater liquidity lowered the cost of borrowing among banks.
Also, Central Bank of Nigeria (CBN) declined to sell short-dated Treasury bills to commercial lenders in the last two weeks. That left more cash in the banking system.
“The CBN has declined to sell open market operation treasury bills to commercial lenders in the past two weeks due to its unwillingness to raise yields in line with bids by investors,” one dealer said.
The lenders’ balance with the CBN stood at about 300 billion naira on Friday, higher than the 261 billion naira in credit last week.
CBN usually sells treasury bills in the secondary market to mop up perceived excess liquidity from the banking system.
Traders quoted the secured Open Buy Back at 6 percent on Friday, lower than 8 percent last week, and 9 percentage points lower than the central bank 13 percent benchmark interest rate.
Overnight placement was also down to 7 percent against 8.5 percent last week.
Dealers expect rates to inch up next week as the government enforces its policy to consolidate revenue in a single account with the CBN.
“We see rates inching up by next week, to be driven by compliance with government policy on Treasury Single Account which is expected to come to full effect on Sept. 15,” another dealer said.
FG has directed that all receipts due to the government or its agencies be paid into the Treasury Single Account, which is maintained by the CBN and linked to other government bank accounts, by Sept. 15 or officials would face “sanctions”. Mohammed usman with agency report
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