The Association of Corporate & Marketing Communication Professionals of Banks (ACAMB) has reassured the public that the country's banks are prepared to follow the Central Bank of Nigeria's (CBN) recent orders regarding the recapitalization of the sector.
The Association said that ACAMB has consistently reaffirmed its support for the CBN's recapitalization efforts in a statement released on Sunday and signed by its president, Rasheed Bolarinwa.
Recall that last week, the Olayemi Cardoso-led Apex Bank published a circular outlining a 24-month review of the minimum capital requirements for commercial, merchant, and non-interest banks.
“This support underlines ACAMB’s belief that while Nigerian banks are globally regarded as safe, resilient and thriving; there is always room for growth.
“As Nigeria seeks to aggressively unlock its innate potential to become a global emerging economy, banks must also stand ready to play their crucial roles of financial intermediation.
“The import of the recapitalization 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.
“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,” ACAMB’s statement read in part.
The head of ACAMB praised the CBN for its transparent recapitalization process, which permits the addition of premiums and share capital in contrast to the previous shareholders' fund system. He restated the ability of the different banks to comply with the recapitalization directive in the allotted period.
“We commend the CBN for the thoughtfulness it has put into the announced modality for the recapitalization. ACAMB particularly note the distinctive definition of the new minimum capital base for each category of banks as the addition of share capital and share premium, as against the previous use of shareholders’ funds. 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 recapitalization in line with allowable options stipulated by the apex bank.
“All facts point to a win-win for the Nigerian banks, the financial market and the economy under this recapitalization.
“The Nigerian capital market, where banks are the most influential group, has the depth to meet the capital requirements of banks. The extended timeline until 2026, provides ample opportunity for each bank to follow through its recapitalization 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 recapitalization means stronger banks and better returns.”
Bolarinwa further guaranteed that the CBN's drive toward recapitalization will boost the nation's economy and strategically establish Nigerian banks as respectable rivals on the continent and around the world.
He promised the banks' cooperation and support in carrying out the recapitalization plan.
“The banking industry will continue to work with financial authorities to build up the economy.
“This recapitalization 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.
“Banks will continue to cooperate with the CBN in the implementation of the recapitalization programme.
“ACAMB shall also be engaging all stakeholders to ensure balanced and factual representation as the recapitalization progresses.
“ACAMB reassures all depositors and shareholders to keep about their businesses with the Nigerian banks without fear,” Bolarinwa stated.
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