Nigeria: CBN, commercial banks debunk mass sack rumour

banks-in-nigeria15 October 2016, Lagos — The Central Bank of Nigeria and deposit money banks in the country have debunked media reports about imminent mass retrenchment in the banking sector following the deteriorating nonperforming loans (NPL) portfolio of the banks.

Rising from the 329 bankers committee meeting in Lagos Wednesday, the CBN Director of Banking Supervision, Mrs. Tokumbo Martins, said: “The stories making the rounds on the pending retrenchment in the banks are totally false; whatever rumour flying around is not true, the commercial banks are not retrenching.”

She also described as “completely false”, the report by a Dubai-based international investment bank, Arqaam Capital, which indicated that seven Nigerian banks are undercapitalised to the tune of N1tn ($3.2bn).

Martins said: “That is not to say the banking sector is not feeling the headwinds in the economy, What we need to focus on is that, do the bank have the capacity to absorb these nonperforming loans? Yes. Do they have a huge capacity to generate income? Yes. Can those assets still perform, yes because the underlining factors are still there.”

Mrs. Martins said other jurisdictions have NPL as high as 18 percent and they are still doing very well.

She also said the CBN has restated its commitment to punish anybody found to have withdrawn more than 50 thousand dollars per annum.

The deputy managing director of Guarantee Trust Bank, Mrs. Cathy Echeozo, disclosed that the committee also met with the Manufactures Association of Nigeria and discussed how to improve the supply of foreign exchange so that they could continue to produce and avert lay off and also achieve a good level of costing for the critical sector.

Sunday Michael Ogwu – Vanguard

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