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Merrill Lynch explains reasons for blacklisting Nigerian clients

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Image: Merril Lynch's New York Office

*Analysts insist, its prejudice

A new strategic international initiative occasioned by the review of clients’ requirements and the resources needed for effective customer service delivery was responsible for the blacklisting of Nigerian resident customers from its wealth management arm, Bank of America Merrill Lynch, has said.

However, the bank which services its clients with a personal wealth profile of at least $250,000 of investible assets, will now service the embattled Nigerian clients through its Global Banking and Markets (GBAM) business, from its London , New York and Johannesburg offices.

BusinessDay investigations revealed that the bank had through a memo in October, requested residents of 75 countries around the world including Nigeria, South Africa, Ireland, New Zealand, Ghana etc to close their accounts, in what it regarded as product of recent review of its wealth management business across the globe.

While Merrill Lynch Wealth Management provides clients with personalised financial review and hands-on advice and guidance, through a network of its financial advisors throughout the world, Global Banking and Markets is the strategic advisor to corporations and institutions worldwide and a leading underwriter of debt and equity securities.

But some Nigerians have taken a swipe at the new policy, accusing the bank of discrimination and double standard, wondering why it finds it convenient to deal with the government, while sidelining its citizens, under the guise of the need to effectively serve its clients.

Victoria Garrod, Senior Vice President, Communications, Bank of America Merrill Lynch, in an apparent response to BusinessDay inquiry said, “The Global Wealth and Investment Management (GWIM) business of Bank of America Merrill Lynch (BofAML) is focussing its client coverage in fewer markets as part of a strategic international initiative, following an in depth review of client requirements and the resources necessary for GWIM to effectively service these clients.

“However, BofAML continues to be active in the West African space, particularly Nigeria , through its Global Banking and Markets (GBAM) business – maintaining strong relationships and an active dialogue in country. BofAML’s GBAM team continues to provide dedicated coverage of its top Nigerian clients from its London , New York and Johannesburg offices.”

But some analysts who spoke with BusinessDay, regard the policy as discriminatory, querying the rationale of the bank in maintaining relationship with the country with regard to management of foreign reserves, mergers and acquisitions (M&A), global treasury solutions, among others but sidelining its citizens.

Eghes Eyieyien, Group Chief Executive Officer, Pharez Limited, a Ratings, Business Consulting, Human Capital Development and Training, and Investments outfit said: “Apparently, Nigerian clients contribute little to the bottom line of Merrill Lynch and are therefore considered dispensable. The decision appears driven by only business considerations, with no regard for the sensibilities of the clients or even our country.

“Merrill Lynch has surprisingly read Nigeria ‘s prospects wrongly. Dr Mike Murdock said ‘Go to where you are celebrated, not where you are tolerated’. So Nigerians and government should ignore the bank and go to where they are wanted.

When I recall how Merrill Lynch staff were all over Nigeria , especially in 2004-2007, anxiously looking for business, I am shocked at the sheer thoughtlessness of the bank’s new stance, which smacks of stereotypical prejudice.”

Another analyst who preferred anonymity, berated the bank, describing the policy as tantamount to toying with the sensibilities of Nigerians. His argument was that although the bank was at liberty to choose its clients, the method of disengagement should be transparent.

His said: “The memo dated October 11 and with December 30 deadline, is suspect. For instance, the last paragraph said, ‘We apologize in advance for any inconvenience this may cause and will endeavour to make this change as seamless as possible for you. If you have any questions, please contact your advisor, whose information is provided below. Thank you for choosing Merrill Lynch. It has been a privilege to serve you.’ Is this not a negation of the spirit of Know Your Customer (KYC) concept?” he asked.

Another source did not see any element of urgency in the decision, while admitting that it could be a coincidence. “This has been under planning by the bank for a while now and it is a coincidence that it happened at this stage. Nigerians can remain customers of the bank. I reiterate that it is just the GWIM business that has withdrawn from some markets. Where Merrill Lynch has other business units, these will continue.

Bank of America Merrill Lynch (BofAML) has a long and established presence in Africa through its Global Banking and Markets (GBAM) Business. Having been on the continent since 1946, it has a strong historical commitment to the region.

BofAML continues to be very active in the West African space, particularly in Nigeria - maintaining strong relationships and an active dialogue in-country with regard to M&A, equity (sales, research and capital markets) and debt capital raising opportunities for clients.

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Updated 7 Years ago

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