Recapitalization: No Need For Panic, Banks Assure Customers | READ WHY

Recapitalization: No Need For Panic, Banks Assure Customers | READ WHY

The Association of Corporate and Marketing Communication Professionals of Banks (ACAMB) has said it welcomed the release of the circular of the Central Bank of Nigeria (CBN) on the banking sector recapitalisation.

Recall that at the first announcement of the planned recapitalisation by the CBN Governor, Dr. Olayemi Cardoso, ACAMB, as a key player in Nigeria’s banking sector, had, alongside other critical stakeholders, affirmed support for the recapitalisation.

The association said in a statement on Monday April 2nd 2024, that the support underlines its belief that while Nigerian banks are globally regarded as safe, resilient, and thriving; there is always room for growth.

The statement was signed by the President of ACAMB, Rasheed Bolarinwa.

“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 CBN circular on review of minimum capital requirement 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.

“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.

“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.

“We commend the CBN for the thoughtfulness it has put into the announced modality for the recapitalisation. ACAMB particularly notes 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.”

ACAMB in the statement said all the banks are on the same page as regards the recapitalisation adding that there is no need for any fear, as the banks have the capacity to meet the recapitalisation in line with allowable options stipulated by the apex bank.

The statement added, “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 until 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 the resilient performance of banks despite economic challenges, will come to the fore as investors know the recapitalisation means stronger banks and better returns.

“The banking industry will continue to work with financial authorities to build up the economy. 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.

“Banks will continue to cooperate with the CBN in the implementation of the recapitalisation programme.ACAMB shall also be engaging all stakeholders in order to ensure balanced and factual representation as the recapitalisation progresses.

“ACAMB reassures all depositors and shareholders to keep about their businesses with the Nigerian banks without fears.