The Central Bank of Nigeria (CBN) has strengthened its pre-emptive surveillance of banks to unearth infractions and ensure compliance with extant rules and guidelines.
The banks have been under intense criticism in recent periods for alleged complicity in economic crimes. The Economic and Financial Crimes Commission (EFCC) estimated that some 70 per cent of financial crimes in the country could be traced to the banking sector.
Financial industry sources yesterday said the apex bank has rejigged its surveillance mechanism to appropriately focus on banks’ financial statements and audit reports.
They told The Nation that each report will pass through multiple-level examinations.
One of the sources said the delay in the submission of the audited reports and accounts of many of the banks for last year might not be unconnected with the rigorous screening of the banks’ financial statements.
Banks that had approved their audited results and submitted the same for onward examination and approval by the CBN since the end of January 2024 are still awaiting final approval of the apex bank.
Banks cannot make public their audited reports and accounts without prior and final approval of the CBN.
The delay in the release of the banks’ results has put them in default of the corporate governance rules at the Nigerian Exchange (NGX), where most banks are listed.
When asked about the delay in submission of their banks’ results, spokesmen for two major banks, who craved anonymity, said they were waiting for the apex bank’s approvals.
Post-listing rules at the NGX provide two compliance options for the submission of results. Most quoted companies including all banks, major manufacturers, oil and gas companies, breweries and cement companies use the 12-month Gregorian calendar year as their business year.
Under the first option, companies are required to submit interim or unaudited quarterly reports not later than 30 calendar days after the end of the relevant period. Such companies then have extended 90 days, after the end of the relevant period, to submit their full-year audited reports and accounts.
However, where a company chooses to audit its quarterly accounts, it shall be required to file such accounts not later than 60 calendar days after the relevant quarter. For the first set of companies, the deadline for the submission of the audited report and accounts for the year ended December 31, 2023, is March 30, 2024. Many banks such as Jaiz Bank, Fidelity Bank and FBN Holdings adopted this option and submitted the interim results for the fourth quarter that ended December 31, 2023.
The deadline for the second set of companies, where several major banks belong, was February 29, 2024. While the rules allow the NGX to grant specific waivers to relevant companies or a general waiver of the deadline under some specific circumstances, a review yesterday indicated that the NGX has not issued any general waiver or specific, publicly announced waiver to the banks.
General waiver is usually given in the event of general disruption to industrial activities such as strikes, national crises, many public holidays and other circumstances that in the judgement of the Exchange may significantly impact the timeline given to companies to prepare and submit the quarterly report.
A review yesterday indicated that the banks had completed their internal approval process and transmitted their results to the apex bank some 40 days ago.
[TheNation]