Market infractions:  CBN, others sanction GTCO, 2 others N32.5m

For contravening market rules, the Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), Nigerian Exchange Limited (NGX) and National Pension Commission (Pencom) sanctioned three banks N32.5million in half year ended June 30, 2023.

The three banks are Guaranty Trust Holding Company Plc, Fidelity Bank Plc, and Stanbic IBTC Holdings Plc.

GTCO was the most sanctioned bank among the three followed by Stanbic IBTC Holdings.

A total of N23.03million sanctions was imposed on GTCO in H1 2023, while Stanbic IBTC Holdings and Fidelity Bank were sanctioned N6.78million and N2.7million respectively.

The breakdown from the banks’ audited H1 2023 result and accounts showed that GTCO was sanctioned N12million in respect of 2020 Risk Assets Examination and N250,000 on the bank for resumption of a top management staff without PenCom’s approval.

GTfund manager, another subsidiary of GTCO was sanctioned N1.38million for non-compliance with the custody rules for Vantage Investment and N9.4million for underpaying its regulatory fees on Vantage Investment.

For Stanbic IBTC Holdings, SEC imposed a fine of N6.78million on Stanbic IBTC Asset Management (SIAML) for failure to obtain SEC approval for an investment product – Privately Managed Portfolio.

In addition, Fidelity bank was sanctioned N2.7million for late filing on the NGX.

The three banks in 2022 financial year were sanctioned a total of N4.47billion as GTCO was the only most penalised financial institution in the banking sector.

The UK government, CBN, SEC, among other agencies where it operates sanctioned GTCO N4.21billion for committing various market infractions in 2022.

GTCO with its head office in Nigeria, and subsidiaries in UK, Ghana, Kenya and Tanzania was sanctioned by N4.2billion by regulating bodies in these countries

Notably, GTCO subsidiary in UK was imposed a sanction of N4.05billion for deficient Anti-Monetary Control (AML) control -2014-2017, the highest sanction imposed on the bank in 2022.

It would be recalled that the Financial Conduct Authority (FCA), the United Kingdom’s financial services regulator sanctioned Guaranty Trust Bank (UK) Limited, £7.67million for serious weaknesses in its AML systems and controls between October 2014 and July 2019.

The FCA in a statement on its website stated that, during the relevant period, GTBank failed to undertake adequate customer risk assessments, often not assessing or documenting the money laundering risks posed by its customers.

Executive Director of Enforcement and Market Oversight at the FCA, Mark Steward  said: “GTBank should have acted quickly to put in place adequate AML controls following its fine in 2013 but it failed to do so. GTBank did not develop a plan that was capable of addressing its AML weaknesses, exposing it and the broader market to financial crime risks for a prolonged period.

“Firms must protect themselves and those dealing with them from financial crime risks, especially money laundering. The FCA is determined to ensure the market for financial services is safe, clean, and trusted with robust systems and controls in place to stymie financial crime. The FCA will continue to take action when these standards are not met.’

GTBank did not disputed the FCA’s findings and agreed to settle, which means it has qualified for a 30per cent discount. Without this discount, the financial penalty would have been £10,959,700.

However, the apex bank in Nigeria, imposed N20 million on the GTCO for failing 2021 risk asset examination; N21.25million for 2021 CBN prospective employee clearance review; N10million for failing 2022 consumer protection review  and N67.35million for CBN’s  review infraction.

In Ghana, GTCO was sanctioned N2.89million for inaccurate submission of FX End -Day Transaction Return and N7.7billion for the  review of the bank’s credit portfolio showed that six (6) impaired loans of N7,714,526

The banking subsidiary in Kenya was sanctioned N7.26million for non- compliance with banking act 28/50(1) and N3.99million for non-compliance with CBK cash reserve requirement.

In Tanzania, GTCO was sanctioned N180,000 for the late rendition of daily liquidity report.

Other sanctions include: GTPENSION manager sanctioned N200,000 for registration of two FGN Employees without complete documentation and N3million for the violation of minimum credit rating requirement.

GT fund manager was sanctioned N520,000 for the issuance of units in excess of the registered units with SEC.