Job losses imminent as banks recapitalize

January was 13.7 per cent, above the prudential threshold of 10 per cent.

“The Non-Performing Loans as a ratio of total loan assets was 4.81 per cent as against the prudential threshold of 5 per cent, which is also positive. The liquidity ratio is 40.14 against the prudential minimum of 30 per cent, which also reflects a healthy position.

“The summary is that based on the financial soundness metrics, Nigerian banks are judged to be generally healthy.

“However, this does not diminish the need for regulatory authority to ensure that this soundness and stability are preserved and improved, especially because of the recent macroeconomic headwinds.

“This, perhaps, is what informed the current policy of the CBN to review the capital base”, he stated.

Similarly, the CEO of SD & D Capital Management, Mr Idakolo Gbolade, said the recapitalization exercise will allow Nigeria to maintain its leading role in the African continent.

“The recapitalization of banks in categories is long overdue”, he told JLN and advocated for the expansion of our economy.

“The time frame is very adequate as well. Some international banks have already envisaged this process and have started making provisions early enough. Banks that cannot meet the new capital requirements have mergers and acquisitions options.

“Nigeria has the highest GDP in Africa, and for us to maintain that position and operate a trillion-dollar economy, the banks must be adequately capitalized.

“A trillion dollar economy must have local capacity to initiate and execute million dollar transactions locally without foreign intervention in key areas of development like oil and gas, steel production, mining, mega construction projects and Public Private Partnerships with the government.

“This can only materialize if we have adequately capitalized banks that can rise to the occasion. Nigerian banks also need to take pride in Africa regarding capitalization because Nigerian banks are not among the most capitalized in Africa.

“Therefore, this new recapitalization policy will adequately position our banks for the emergency economy in Nigeria or Africa and worldwide.

“The exclusion of shareholders’ funds as additional Tier 1 capital shows the CBN wants to distinguish fresh funds from existing funds which could be subject to regulatory infractions because shareholders’ funds is not a statutory capital base”, he told JLN