By Nik Ogbulie
(Moneyreport.ng)
A somewhat seamless record may have been achieved if in seven days today the Central Bank of Nigeria (CBN) calls the official roll heralding a new era of banks worthy of hoisting the apex bank’s operating license.
This becomes very imminent as the mandatory two years deadline announced in 2024 by Olayemi Cardoso, Governor CBN becomes effective March 31.
The atmosphere within the banking industry ecosystem and those of the regulatory institution have been calm, indicating appropriateness in meeting the expected compliance from the sector.
Moneyreport Economic Intelligence Unit can reveal that the industry has remained calm as minimum default rate is being brandished, a development which industry stakeholders say is expected and does not justify any reasonable rate of failure, when completely aligned with the status quo ante.
Our banking sector indications have remained rife that the operators and regulators are in tremendous unison with the modus operandi, as originally indicated and are not nursing any qualms of any expected fallout, even as they have started the effort of tightening the noose around a scanty number of the probable failures.
Our sources very close to the critical mass of bank chiefs indicate that the exercise was conducted within the most diligent rate of compliance standards and concerns , an effort that created rooms for successes, standard and mutual benefits. They also noted that the apex bank maintained a subtle approach to the extent that banks were not pressured to adopt conditions that could create doubts in the efficacy of their results.
A respected former CEO of a Nigerian bank noted last night that “the fact that there has not been any rumble in the financial sector indicates that banks are not yet in any panick mode even as there are alliances to push through the available gaps between today and Friday.
But just a palpable response may still be available to bother a few banks whose ownership and structural architecture have been subject of the major push that is being expected within the week, as they may whittle down their ambition and settle for space within the lower stratum in the industry.
Industry operators accord the huge level of compliance of the recapitalization to the fact that 95% of banks in the economy can be proudly noted as of core private sector initiatives, comprising of diligent individual investors, strong equities and organized institutional concerns when compared with the larger structure in 2005, when families, governments and quasi institutions ran the ownership racket in the industry. Again the very huge, about 89 banks, as compared to about 35 as presently constituted, eliminated so many of the hazards that plagued the industry apart from regulatory flamboyance that was copiously observed.
Much as Nigerians are still waiting to know the official state of the exercise, indications are rife that the project is home and dry, judging from the available data, industry comportment and the body language of institutions involved in the activities of financial institutions in Nigeria and their partners.
It is believed that the anticipated volume of capital available to Nigerian banks may still be far below what is available in economies like South Africa, Egypt, Algeria and Morocco, it is believed that the Cardoso approach forms a bases for self harmonisation by banks based on the volume of anticipated business. With the level of inflation seen to have risen to as much as 50% between 2005 and 2026, financial experts believe that raise in the capitalisation of banks would only remain inevitable but gradual.
The exercise is largely seen as the major platform for economic growth as banks are the permanent drivers for the realisation of the One Trillion Dollar economy by 2030.
An IFC official resident in Ghana told Moneyreport that Cardoso’s Trump Card that necessitated the seamless goal is the uncommon application of stratification, which urged investors and owners to select their areas of competitive efficiency.
The list, when finally released by the apex bank next week, permanent features will be banks like Access, Zenith, GTBank, UBA, Fidelity, FCMB,WEMA and others. This also implies an unbroken string of the monolith .
