Shareholders of seven quoted banks listed on the floor of the Nigerian Stock Exchange (NSE) are worried that delay in filing 2017 audited financial statements will delay their dividend payment and even affect the amount they ought to receive, in the event of being fined for such infractions.
Quoted companies are expected to file their audited financial statement after 90 days at the end of every financial calendar.
However, in order to escape the regulators’ hammer, a few have filed for delay (taken excuse) in submitting their Financial Year (FY) 2017 statements to the NSE.
The entities that have filed for delay and adduced reasons for same are: FBN Holdings, Fidelity Bank, Diamond Bank, Sterling Bank, Union Bank, Unity and Skye Banks.
Giving reason for delay, the Company Secretary, FBNH, Seye Kosoko, said peculiarity of the Group Structure was responsible. FBNH has subsidiary companies operating in the banking and insurance sectors, as well as the capital market, all with a common financial year end of December 31 alongside the holding company.
Each of these subsidiaries, according to the lender, needs to audit its financial statements and obtain the approval of its respective regulator prior to submission to FBNH for consolidation. Thereafter, FBNH is also required to obtain the approval of its primary regulator before submission and filing with NSE.
It notified the NSE on April 4, 2018, and recorded N45.84 billion profit in third quarter (Q3’17) 2017 last Declared Financial Results.
For Fidelity Bank, delays in concluding the audit process was the reason adduced on April 4, 2018. The lender declared N14.45 billion Profit After Tax (PAT) in Q3’ 17. Its anticipated date of release is on or before April 30, 2018.
Diamond Bank said uncompleted review of Financials by the Central Bank was responsible. Stakeholders believe that it is unlikely that the review of accounts by the Central Bank of Nigeria (CBN) will be concluded in time for compliance with the NSE and other regulatory rules guiding release of annual audited financial statements. Diamond Bank declared N5.91 billion PAT in Q3 2017 Result.
Sterling Bank is awaiting regulatory approval from CBN. It notified the Exchange April 5, 2018, just as it declared N5.91 billion PAT in Q3 2017 result. It is anticipated that date of release will be on or before April 30, 2018.
Similarly, ongoing finalisation of the bank’s audited accounts with regulators and external auditors is the reason given by Union Bank on April 3, 2018. UBN declared N12.4 billion PAT in Q3 2017 results, and likely to release its results on, or before April 30, 2018.
Unity Bank on April 6, said its accounts have been forwarded to the CBN for review and will be filed with the NSE upon the conclusion of CBN’s review. It declared N2.45 billion PAT in Q3’17 Result.
Furthermore, following the intervention of the CBN in the Skye Bank in July 2016, there was an overhaul of the bank’s corporate governance framework which led to major resignations and new appointments into the Board, changes in specific internal structures and the need to have in place some other structures prior to the approval of the bank’s accounts. It notified the NSE on March 31, 2017. It declared N40.73 billion loss in 2015 Audited Results.
The Chairman, Progressive Shareholders Association of Nigeria (PSAN), Mr Boniface Okezie, wants regulators to consider reasons adduced by the banks.
In an earlier interview, Okezie said: “The NSE needs to further carry out investigations why these companies have failed to meet regulatory requirements. Imposing of fine is not the best, as this action affects the owners of the companies (shareholders) and not the management.
“It is only when such action is taken and the company fails to provide reasonable reason that a fine could be imposed, and the fine should be imposed on all the officers responsible to turn in the results and not to the firm itself.”
Also, a former banker and shareholder in multiple firms Mr. Damian Ohuakanwa told Nigerian Tribune that those officers of the companies assigned to process returns should do so as at when due to avoid unnecessary penalties.
He added that regulatory authorities should know that the burden or consequences of penalty is borne by shareholders.
“This is because the aftermath effects is that top line and bottom line will definitely be affected and dividend proposed will decline and the working capital of these companies are also affected. On this note, I want our regulators to temper justice with mercy, by looking at other ways to punish them in such a manner that our investment will not be affected.
“The regulators in the banking, capital market and insurance sectors (CBN, SEC, NAICOM) should be up and be doing in their responsibilities because most times it is when one regulator or the other do not complete their work on time that it affect prompt filling of results by companies to the NSE,” he stated.
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