- Acquisition of Enterprise Bank was a major strategic error
- The bank's non performing loans (NPLs) are amongst the worst in the Industry.
- Impairment charges in H1 2018 was N37.5bn but by Year-end the figure had settled to N634.5m
- The banks debt to equity ratio was -0.17. The negative value reflected negative shareholders fund which could be impaired by as much as $1bn;
- Liquidity challenges with The bank’s regular recourse to the CBN’s short term borrowing window
- Corporate Governance: Directors involved in insider loan transactions
- 2018 unaudited figures doesn't look good
PBT as at Dec 2018 was N285.7m, but they made a loss of N4.37b in Dec 2018. Most of the loss came from operating expenses far exceeding operating income. By H1 2018 HBL had already incurred a loss of N38b 99% of which came from what it termed, 'other impairments'.
Insider corporate abuse. Members of the bank's Board of Directors collected huge sums of poorly collateralized loans for transactions of dubious viability. A case in point is the Keystone story where a director used his clout on the board to secure a loan...
1. Wind up the institution with shareholders losing their money (as it stand today, shareholder’s funds have been completely eroded). Depositors will resort to NDIC for part recovery.
3. Liquidation and running of the bank under a new franchise managed by AMCON.
Option 2 will likely involve the CBN or AMCON recapitalizing the bank to make it "sell-able". This means the treasury or tax pay takes the bill.
Option 3 is the most viable option with less cost