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NDIC expresses fears that some banks may not survive recession

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Banks, others to get N440bn from NDIC in 2019

The Nigerian Development Insurance Corporation (NDIC) has expressed fears that a number of banks in the country may not survive the economic recession presently hitting the country.

According to the Managing Director/Chief Executive of the corporation, Alhaji Umaru Ibrahim who spoke at a public function in Kaduna, Kaduna State, the 23 commercial banks in Nigeria will survive the recession if they increase their capital base by 30 per cent.

Failure to do that would see many of them not being in a position to perform their role in helping Nigeria overcome the recession soon.

But he expressed fears that a lot of the banks may not easily recapitalise, as many sectors were facing some daunting challenges

In 2006, the CBN had directed banks to raise their capital base from N10 billion to N25 billion, while those not able to meet the condition were forced to merge or be acquired by the viable ones.

But findings by NDIC research unit, in its 2016 end of the year report, said before the banks could survive the economic meltdown, each of them should beef up its capital base to at least N30 billion before the end of second quarter of 2017.

Read also: NDIC expresses fears that some banks may not survive recession

Ibrahim said though the banks had been doing all things possible to remain relevant in the difficult times, the low value of naira brought about by recession, has made it necessary that their minimum capital base should be increased.

“Nigerian banks, like other banks across the globe are facing daunting challenges, but NDIC will continue to do everything possible to help them weather the storm,” Ibrahim said.

“For us in the area of supervision and regulation of insured financial institutions, it is very necessary that we follow the trends, and we do everything possible to ensure that our insured institutions, the deposit money banks (DMBs), primary mortgage banks (PMB) and microfinance banks (MFBs) continue to be creative in their products as to be able to weather the storm”, he added.

He said the banks were facing liquidity issues, forex issues, while the annual budget also affects everybody, as well as dwindling revenue and profits.

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0 Comments

  1. Roland Uchendu Pele

    December 20, 2016 at 7:50 am

    The Banking Industry is really at risk. We know the few that cannot be shaken!

  2. JOHNSON PETER

    December 20, 2016 at 8:02 am

    It’s simple. Any bank that can’t meet up with #25b capital base should go merge with other banks to raise the #25b together.

  3. seyi jelili

    December 20, 2016 at 8:15 am

    Shame on this country as we have 23 shakable banks whereas other countries have 50 strong commercial banks and more. My own is that banks should not defraud their customers like mmm by folding up unknowingly.

  4. yanju omotodun

    December 20, 2016 at 8:27 am

    I am sure GT bank, Skye bank and Sterling bank may not escape this recession.

    • Amaka Okoro

      December 21, 2016 at 3:55 am

      Am sure of GT bank but Skye and sterling back must not escape the recession because they are growing banks

  5. Animashaun Ayodeji

    December 20, 2016 at 10:15 am

    No problem if the banks crash, they should just make sure the release everybody’s money before the pack up and go.

    • Amarachi Okoye

      December 21, 2016 at 3:50 am

      They should oooo because my money is their and i need it before it will get crash

  6. Johnson Amadi

    December 20, 2016 at 10:16 am

    The 2006 merger helped the banking sector a lot, despite that, the banks in Nigeria as at today are still much, we need another merger so that the banks can be more responsible to‎ their clients.

    • Margret Dickson

      December 20, 2016 at 10:17 am

      before you think of merger, consider the investors, the workers and those who will be negatively affected, put yourself in their shoes.

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