Diamond Bank, Stanbic IBTC shares price slumps as investors react to CBN sanctions

Diamond Bank, Stanbic IBTC shares price slumps as investors react to CBN sanctions

Following Nigeria’s Central Bank (CBN) sanctions on top major banks involved in the illegal repatriation of MTN’s $8 billion dividends to South Africa. The Share prices of Diamond and Stanbic IBTC, the two listed banks fined by the Central bank of Nigeria (CBN) for aiding and abetting the illegal repatriation of funds associated with African telecommunication giant, MTN, fell Thursday as investors reacted to the apex bank sanctions.

Diamond bank’s share price fell by 9.4 percent worsening its year to date returns to -16.0 percent while Stanbic IBTC saw its share price fall 2.6 percent at the end of trading on the day.

The CBN Wednesday asked telecoms major, MTN Nigeria to return $8 billion it illegally repatriated and imposed heavy sanctions totaling N5.87 billion on four banks (Standard Chartered Bank, Stanbic-IBTC, Citibank, and Diamond Bank) under its regulatory purview for what it described as “flagrant violation of extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 of the Federal Republic of Nigeria and the Foreign Exchange Manual, 2006”.

In its reaction, Diamond Bank in a notice signed by Uzoma Uja, its company secretary, to The Nigerian Stock Exchange and stakeholders said the sanctions by the CBN would not “impact your ability to continue to do business with the Bank”

In the statement titled “Remittance of Foreign Exchange With Irregular Capital Importation Certificate”, the bank said “these foreign exchange transactions occurred between 2001 and 2006 and currently, we are cooperating with the apex regulator to ensure that this matter is resolved.”

It said pdates on any new development will be made available to all stakeholders. We want to assure all stakeholders that the bank complies with all regulatory policies issued.

Stanbic IBTC Holdings PLC (a member of Standard Bank Group) also issued a press statement Thursday through the NSE, stating that it has been informed by its banking subsidiary – Stanbic IBTC Bank PLC that penalties have been imposed on the Bank by the Central Bank of Nigeria (CBN) pursuant to a review of transactions relating to the remittance of foreign exchange on the basis of certain “irregular” capital importation certificates issued to MTN Nigeria Communications Limited.

The bank thus said it is holding further engagements with the CBN, in relation to the issues it has raised.

“Please be assured that the above does not impact on your ability to continue to conduct your various business […]

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