LAGOS – HSBC and UBS have shut down their offices in Nigeria, the country’s central bank reported on Friday as it revealed sharp fall in foreign investment from a year ago
The bank said foreign direct investment in Nigeria fell to 379.84 billion naira ($1.2 billion) in the first half of the year from 532.63 billion naira ($1.7 billion) a year earlier.
No reason was given for the closures.
HSBC was not there to comment and UBS declined to comment.
Recall that UBS started operations in Nigeria in mid-2014 with the aim of linking prospective clients with its offshore centres in Switzerland, the UK, Dubaiforeignand Singapore.
The central bank said the forecast for the Nigerian economy in the second half was “optimistic” given increase in oil prices and production but rising foreign debt and uncertainty surrounding the 2019 presidential election was a concern.
Investor confidence in the Africa’s biggest economy has been eroded since the central bank in August ordered MTN to repatriate $8.1 billion to the country, which forms the part of the profit the South African giant telecoms firm sent abroad.
An HSBC research note dated July 18 said a second Buhari term will limit economic progress and further tear apart the investor confidence.
The central bank also said three lenders were not able to meet its minimum liquidity ratio of 30 percent, without naming them.
It added that non-performing loans (NPLs) have dropped to 12.4 percent as at June 2018 from 15 percent a year ago, still a long way above its 5 percent threshold.
“To further consolidate on the improvement, the Central Bank of Nigeria directed banks to intensify efforts at debt recovery, realisation of collateral for lost facilities and strengthening their risk management processes,” it said in the report.
In September, the regulator revoked Skye Bank’s licence for failing to recapitalise. It then went further to transfer Skye’s assets to a “bridge bank” Polaris wholly-owned by the state-backed asset management company AMCON.
Nigerian banks have been working hard to raise fresh capital after huge loan losses worsened by an economy that has just been rescued from recession.
Diamond Bank last week denied asking investors to raise cash but said it was managing its capital, which borders on the regulatory minimum, to grow.
Another lender Unity Bank has been on the move to raise fresh funds to recapitalise.
Alhaji Lai Muhammed replies HSBC and UBS
However, the Minister of Information and culture, Alhaji Lai Muhammed through the presidency replied the global giant bank as follows:
We have also read that the international financial institution, HSBC, said Nigeria’s economic development will be stunted if President Buhari gets a second term.
He clearly branded the reports fake news and weapon of a psychological warfare by those who have not been favoured by the policies of the Buhari-led administration.
The minister explained: “Our fight against corruption has meant that many financial institutions, especially banks, that fed fat on the proceeds of corruption are no longer able to do that.
There will be no rest until HSBC returns our money – EFCC
We won’t rest until HSBC returns our money – in a statement disclosed via the agencies official Facebook handle, expressed they will leave no stone unturned until the last penny belonging to the country is returned.