4th November, 2015
Nigeria’s central bank did not find “material misrepresentation” after examining past accounts of commercial bank Stanbic IBTC and sees no need to ask it to restate them, the central bank said on Tuesday.
The central bank’s statement comes after Nigeria’s Financial Reporting Council (FRC) gave Stanbic IBTC, the local unit of Standard Bank Group, 60 days to restate its 2013 and 2014 accounts because of what it said were “misleading” disclosures relating to expenses and imposed a fine of 1 billion naira.
The FRC said last week that Stanbic IBTC had an “other operating expenses” category in its accounts for financial years 2011 through 2014, in which expense items were not properly disclosed including an annual license fee to its parent firm Standard Bank.
It had asked the central bank to take disciplinary action against Stanbic’s management.
“With respect to the allegation of lumping several expense items under ‘others’, we are of the view that the items were not material enough to appear as line items in the income statement and that the non-disclosure of the items did not materially affect the true and fair view of the financial statements,” the central bank said.
The banking regulator said it agreed with the FRC on the classification of certain items after its investigation but added that the misclassification did not understate or overstate Stanbic’s assets and liabilities.
The central bank said its review showed the banking group obtained necessary approvals to pay license fees to its South African parent for a period of three years to May 30, 2015. It added that a remittance from June 2015 was awaiting approval.
Stanbic IBTC shares have fallen 17.78 per cent in the week since the FRC ordered the bank to restate its accounts.