The Association of Corporate & Marketing Communication Professionals of Banks (ACAMB) says recapitalisation will help banks grow Nigeria’s economy.
On March 29, the Central Bank of Nigeria (CBN) announced an upward review of the minimum capital requirements for commercial, merchant, and non-interest banks.
The CBN said the increase was necessary due to prevailing macroeconomic challenges and headwinds occasioned by external and domestic shocks.
In a statement signed by Rasheed Bolarinwa, ACAMB’s president, on Monday, the association said the recapitalisation will put Nigerian banks in a better position to support the strengthening of the economy and the expansion of the real sector.
“The import of the recapitalisation announced is that Nigerian banks are safe and reliable, but the apex bank, in its developmental mandate, is leading the banks to strengthen their capacities to meet competitive domestic and global financial needs,” ACAMB said.
“This recapitalisation will put Nigerian banks in better stead to support the strengthening of the economy; the expansion of the real sector, and the building of bigger banking brands that can compete continentally and globally.
“As Nigeria seeks to aggressively unlock its innate potential to become a global emerging economy, banks must also stand ready to play their crucial role of financial intermediation.
“The CBN circular on review of minimum capital requirements for commercial, merchant, and non-interest banks over the next 24 months has laid to rest any anxiety about the intention, process, and possible outcome of the new recapitalisation exercise.
“This overarching theme that runs through the circular and its explanatory notes further affirms the soundness of the banking sector, in line with several rating reports on Nigerian banks by leading local and international rating agencies.”
The association told the public not to panic as banks have the capacity to meet the recapitalisation in line with allowable options stipulated by the CBN.
“We urge the public to take note of this change. As it stands, banks are on the same page, and as such, there is no need whatsoever for any fear, as the banks have the capacity to meet the recapitalisation in line with allowable options stipulated by the apex bank,” the association said.
“All facts point to a win-win for the Nigerian banks, the financial market, and the economy under this recapitalisation.
“The Nigerian capital market, where banks are the most influential group, has the depth to meet the capital requirements of banks.
“The extended timeline till 2026, provides ample opportunity for each bank to follow through its recapitalisation plan, without undue crowding effect.
“With their background of good returns and liquidity, banking stocks are toasts of domestic and foreign investors.
“This pedigree, coupled with resilient performance of banks despite economic challenges, will come to the fore as investors know the recapitalisation means stronger banks and better returns.”
ACAMB affirmed its support for the recapitalisation while commending CBN for the thoughtfulness it has put into the announced modality for the recapitalisation.
