Some experts in the financial and capital market have applauded banks over their recapitalisation progress reports.
They noted that banks’ recapitalisation progress reports from the Central Bank of Nigeria (CBN) were encouraging.
The experts also appealed to the CBN to support banks that were yet to meet the recapitalisation requirements to move the financial sector forward.
Prof. Uche Uwaleke, the President, Capital Market Academics of Nigeria, said the report suggested that the banking sector understood the importance of stronger capital buffers in supporting economic growth, absorbing shocks, and maintaining financial stability.
Uwaleke said having thirty banks already meeting the new minimum capital requirements according to the CBN, demonstrated that the industry had responded positively and proactively to the recapitalisation policy.
According to him, it also shows that the recapitalisation policy itself is realistic and achievable for well-managed institutions.
He also commended the role played by the capital market in the recapitalisation process.
Uwaleke said a large proportion of the funds raised by banks came through the capital market via rights issues, public offers, and private placements.
”With over N4 trillion reportedly mobilised from the market so far, the recapitalisation exercise has clearly demonstrated that the Nigerian capital market is capable of supporting large-scale capital raising.
”This is a strong indication that the market may not be as shallow as it has sometimes been perceived,” he said.
Uwaleke urged banks who were yet to meet the recapitalisation requirements to intensify their capital-raising efforts before the March 31, deadline.
Also speaking, Chief Okechukwu Unegbu, a former President of the Chartered Institute of Bankers of Nigeria (CIBN), also described the recapitalisation progress as “somewhat encouraging”.
He urged the apex bank to support the banks that had yet to meet the requirements for a period of six to nine months until they were able to meet up.
Unegbu who described support from the CBN as normal in the industry, noted that bank failure or liquidation would be detrimental to the system.
He said merger was another option for banks that were yet to meet the recapitalisation requirements.
”The CBN can make sure that these banks continue to operate and help them to get recapitalised or to get them to come together in a team to merge as a body.
”So, the CBN can do a lot to help those banks, either to take them on for a period of maybe six months or nine months until they are capable of continuing their operate,” he said.
Mrs Bisi Bakare, the National Coordinator, Pragmatic Shareholders Association of Nigeria, said a stronger capital base would enable banks to support economic growth, have good returns for the shareholders and remain competitive.
Bakare urged banks that had yet to meet the requirement to act with urgency and be transparent to shareholders about their recapitalisation plans.
She said that options like raising fresh capital through rights issues or public offers, bringing in strategic investors, or exploring mergers and acquisitions were available for banks yet to meet the recapitalisation threshold.
”We all know what happened during the last recapitalisation exercise when few banks hurriedly did their merger and acquisitions on the eve of the deadline, the outcome was disastrous, as at today, many of those banks are no more.
”That is why planning is very necessary in every aspect of life. I do not wish for any bank to fail,” she said.
CBN said that 30 banks had met the new minimum capital requirements applicable to their respective licence authorisations.
CBN said the capital positions of the remaining three lenders were currently undergoing routine verification by regulators ahead of final confirmation of their compliance with the new capital thresholds within the stipulated recapitalisation timeline.
