Oceanic Bank Plc on Tuesday announced its inability to give a bonus of one for 10 earlier promised its shareholders. The Director General of the Nigerian Stock Exchange (NSE), Prof. Ndi Okereke-Onyiuke, who made the announcement in Lagos, explained that the bank could not meet its promises because it was technically insolvent.

"The bonus cannot be paid to the shareholders because the bank is technically insolvent. There was no money in the reserve and there was no money in the shareholders fund," she said.


The NSE boss said that the exchange had announced the bank's one for 10 bonus to the investing public based on the financial account earlier presented to it by the bank. She said that based on the account presented, the bank's authorised share capital was adjusted which equally affected its share price.

Okereke-Onyiuke said the cancellation followed a meeting with the management of the bank led by its Managing Director, Mr John Agbor, who gave a detailed analysis of why the bank could not give the bonus.


"It is important that we make this announcement because the banks are already in bad shape and we do not expect them to do wonders. All that happened to the banks are due to the excesses of their managing directors," she said. According to her, the bank has stabilised as it was able to recover N95 billion from the non-performing loans, while 60 per cent of the loans was insider-related.

"The 60 per cent of the loans was taken by the bank directors which raises the issue of corporate governance. Directors are not supposed to take loans from the banks they are managing," she further explained and asked that the offenders be brought to book. Okereke-Onyiuke prayed for the quick passage of the Assets Management Company (AMCON) Bill, which, according to her, would quicken the recovery of the banks.

She re-iterated her earlier assurance that investors had not lost their money in the capital market but only the value of their money and urged them not to loose faith in the market but to invest without borrowing.

The management of Oceanic Bank, had, in its 2008 financial account presented to the NSE, announced a bonus payment of one for every 10 shares held by the shareholders. Market sources explained that the bank was planning to give the bonus when the CBN investigative hammer fell on it from which it has been struggling to come out since last year.