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Deputy Governor, Opera-tions, Central Bank of Nigeria (CBN), Mr. Babatunde Lemo, yesterday confirmed THISDAY’s story to the effect that 15 out of the current 24 banks might emerge after the banking watchdog’s ongoing reform in the banking sector.
Lemo made this confirmation at an investors’ forum organised by CSL Stockbrokers Limited in Lagos.
THISDAY had last week reported that the CBN Governor, Mallam Sanusi Lamido Sanusi, at a British Broadcasting Corporation (BBC) programme “Hear Your Say,” anticipated that 15 banks would emerge at the end of the ongoing cleansing in the banking sector – a report, which the CBN denied.
But Lemo, who was represented by Mr. Titus Ikuyeju of the CBN’s Banking Supervision Department, said the apex bank believed that the smaller the banks, the easier it would be for supervision.
He, however, noted that without the second phase of the banking consolidation, the country would still be battling with the issue of small and big banks.
He said: “If we don’t consolidate, we may have very big and smaller banks. But we are expecting a market induced consolidation and 15 banks are been expected to emerge at the end of the exercise.”
Lemo, who presented a paper titled, “Banking Supervision: Regulation and Disclosure”, said the task of the CBN’s supervisors was not “to guaranty that banks will not fail; make decisions on management’s behalf; prevent banks from taking commercial risks; and distort market competitiveness”.
He explained that the major problem with Nigerian banks was false data emanating from them, adding that bank managing directors would be made to sign all copies of data printout from their banks.
He said bank chiefs found guilty of falsifying their data could be suspended indefinitely.
He listed the benefits of full disclosure to include providing stakeholders with information to evaluate the true and fair financial position of the institutions; to assist in taking informed decisions; enhance integrity and reduce reputation risk that could lead to loss of confidence; reduce market uncertainty - thereby reducing risk of contagion; promote market discipline; enhance sound corporate governance as well as enhance compliance with best practice and international standard.
The CBN, he added, had complied with the 25 core principles for effective supervision issued by the Basle Committee, which covered among other objectives, independence, powers, transparency, cooperation licensing, structure and prudential regulation.
“The issuance of the code of corporate governance was to enable the banks cope with corporate governance challenges, post consolidation and promote transparency and due process, data integrity and disclosure,” he said.
Meanwhile, the Chief Economist, CSL Stockbrokers, Mr. Gregory Kronsten, has said banks’ lending behaviour has changed dramatically since the beginning of the year.
Presenting a paper titled: “Macro Economic Overview of Nigerian Economy”, Kronsten said given the behaviour of the banks, there might not be any growth in credit to the private sector this year.
He warned that the common financial year-end directive of the CBN would sound a death-knell for the game of chasing deposits to massage the balance sheet before the reporting date.
He observed that the crises in the banking sector had served as constraint to growth in the private sector, lamenting that most blue-chip companies were paying close to 20 per cent of their earnings for ordinary working capital finance.
“The external credit lines for Nigerian banks were reduced as a result of the global credit event. The negative impact of this reduction, however, has been dwarfed by the continuing fallout from Nigeria’s own self inflicted domestic events, which has dragged down the Nigerian Stock Exchange (NSE) All-Share Index,” he said.
Earlier in his speech, Managing Director and Chief Executive Officer of CSL Stockbrokers Limited, Mr. Olugboyega Balogun, said the goal of his company was to provide a global standard institutional brokerage solution to its domestic and international clients.
The firm, he stated, is currently arguably the largest facilitator of foreign investment in the Nigerian capital market.


		Tuesday 29/9/ 2009
		CBN Dep Gov Restates Likely Emergence of 15 Banks
		Deputy Governor, Opera-tions, Central Bank of Nigeria (CBN), Mr. Babatunde Lemo, yesterday confirmed THISDAY’s story to the effect that 15 out of the current 24 banks might emerge after the banking watchdog’s ongoing reform in the banking sector. Lemo made this confirmation at an investors’ forum organised by CSL Stockbrokers Limited in Lagos. THISDAY had last week reported that the CBN Governor, Mallam Sanusi Lamido Sanusi, at a British Broadcasting Corporation (BBC) programme “Hear Your Say,” anticipated that 15 banks would emerge at the end of the ongoing cleansing in the banking sector – a report, which the CBN denied. But Lemo, who was represented by Mr. Titus Ikuyeju of the CBN’s Banking Supervision Department, said the apex bank believed that the smaller the banks, the easier it would be for supervision. He, however, noted that without the second phase of the banking consolidation, the country would still be battling with the issue of small and big banks. He said: “If we don’t consolidate, we may have very big and smaller banks. But we are expecting a market induced consolidation and 15 banks are been expected to emerge at the end of the exercise.” Lemo, who presented a paper titled, “Banking Supervision: Regulation and Disclosure”, said the task of the CBN’s supervisors was not “to guaranty that banks will not fail; make decisions on management’s behalf; prevent banks from taking commercial risks; and distort market competitiveness”. He explained that the major problem with Nigerian banks was false data emanating from them, adding that bank managing directors would be made to sign all copies of data printout from their banks. He said bank chiefs found guilty of falsifying their data could be suspended indefinitely. He listed the benefits of full disclosure to include providing stakeholders with information to evaluate the true and fair financial position of the institutions; to assist in taking informed decisions; enhance integrity and reduce reputation risk that could lead to loss of confidence; reduce market uncertainty - thereby reducing risk of contagion; promote market discipline; enhance sound corporate governance as well as enhance compliance with best practice and international standard. The CBN, he added, had complied with the 25 core principles for effective supervision issued by the Basle Committee, which covered among other objectives, independence, powers, transparency, cooperation licensing, structure and prudential regulation. “The issuance of the code of corporate governance was to enable the banks cope with corporate governance challenges, post consolidation and promote transparency and due process, data integrity and disclosure,” he said. Meanwhile, the Chief Economist, CSL Stockbrokers, Mr. Gregory Kronsten, has said banks’ lending behaviour has changed dramatically since the beginning of the year. Presenting a paper titled: “Macro Economic Overview of Nigerian Economy”, Kronsten said given the behaviour of the banks, there might not be any growth in credit to the private sector this year. He warned that the common financial year-end directive of the CBN would sound a death-knell for the game of chasing deposits to massage the balance sheet before the reporting date. He observed that the crises in the banking sector had served as constraint to growth in the private sector, lamenting that most blue-chip companies were paying close to 20 per cent of their earnings for ordinary working capital finance. “The external credit lines for Nigerian banks were reduced as a result of the global credit event. The negative impact of this reduction, however, has been dwarfed by the continuing fallout from Nigeria’s own self inflicted domestic events, which has dragged down the Nigerian Stock Exchange (NSE) All-Share Index,” he said. Earlier in his speech, Managing Director and Chief Executive Officer of CSL Stockbrokers Limited, Mr. Olugboyega Balogun, said the goal of his company was to provide a global standard institutional brokerage solution to its domestic and international clients. The firm, he stated, is currently arguably the largest facilitator of foreign investment in the Nigerian capital market.