Two Global Banks Close Offices in Nigeria as Foreign Investment Falls

By Paul Mbagwu

Global banking giants, HSBC and UBS have shut their offices in Nigeria, the Central Bank of Nigeria (CBN), has said.

The apex bank disclosed this in its Half Year 2018 report released on Thursday.

Although the CBN did not give any reason for the closures, the announcement comes less than two months after the Federal Government accused HSBC of having laundered more than $100 million for former military dictator Sani Abacha.

The government’s accusation followed an HSBC research note dated July 18 2018, which said that a second term for President Muhammadu Buhari: “Raises the risk of limited economic progress and further fiscal deterioration, prolonging the stagnation of his first term, particularly if there is no move towards completing the reform of the exchange rate system or fiscal adjustments that diversify government revenues away from oil.”

In the note, HSBC group, which is Europe’s largest by total assets, had stated that while higher oil prices have brightened Nigeria’s macro outlook, boosting export earnings, improving the supply of foreign exchange, and supporting naira stability, the Buhari administration was yet to address the economy’s structural shortcomings.

The British multinational bank said: “Economic growth remains sluggish and reliant on the rebound in oil output while the non-oil economy, which accounts for about 90 per cent of GDP, continues to languish with many service sectors still mired in contraction. Joblessness continues to rise, up almost three-fold in three years to 19 per cent in Q3 2017, pushing the number in poverty to 87 million.” However, in its response, the Presidency said what had “killed” the economy in the past was “unbridled looting of state resources by leaders, the type which was actively supported by HSBC.”

According to CBN’s report: “The number of representative offices of Nigerian banks abroad remain unchanged at six (6), while, the two (2) representative offices of foreign banks in Nigeria (HSBC and UBS) were closed, bringing the number of representative offices of foreign banks to eight (8) at end-June 2018.”

Foreign Investment into the country fell sharply to N379.84 billion ($1.2 billion) in the first half of the year from N532.63 billion ($1.7 billion) in the same period last year.

HSBC is one of the world’s largest banking and financial services organisation with it’s headquartered in London while UBS is a Swiss multinational investment bank and financial services company that provides services to clients in over 50 countries.