CBN okays 17 banks to manage foreign reserves
THE Central Bank (CBN) has given 17 Nigerian banks approval to manage the nation’s foreign reserves. The apex bank has also allotted between $325 million and $1billion to the 17 banks depending on the class of their mandate .Besides,the least capitalised Nigerian bank achieved a capital base of about N25 billion ($188 million) as against N1.3 billion ($10 million) before consolidation, while total capitalisation of the sector rose significantly from N311 billion ($2.4 billion) to N932 billion ($7.3 billion) by December 31, 2005.
Recall that Nigerian banking industry was struggling, trying to overcome several challenges which made it very difficult for the sector to support the real sector of the economy before July 2004.There used to be 89 banks comprising institutions of various sizes and degrees of soundness.Evidently, the industry was highly concentrated on the 20 largest banks which accounted for over 70 per cent of total industry deposits, assets and liabilities.In addition, the sector was battling with some challenges among which were: poor capital base, capacity issues, poor corporate governance, unethical practices, distress syndrome and accelerated erosion of public confidence.
As at December 31, 2005,N360 billion and Direct Foreign Investment of $652 million and £162,000 were raised by banks.The unexpected level of success achieved has not gone unnoticed in the global market as evidenced by the improved rating of Nigerian banks. In the rankings, 20 of the 25 Nigerian banks are now in the top 100 banks in Africa; 17 are in the top 40 banks, while four are among the top 10 in Africa. Seventeen of the 25 banks are in the top 1,000 in the world.The banking sector was able to grapple with the Consolidation exercise and came out successfully.
Recall that Nigerian banking industry was struggling, trying to overcome several challenges which made it very difficult for the sector to support the real sector of the economy before July 2004.There used to be 89 banks comprising institutions of various sizes and degrees of soundness.Evidently, the industry was highly concentrated on the 20 largest banks which accounted for over 70 per cent of total industry deposits, assets and liabilities.In addition, the sector was battling with some challenges among which were: poor capital base, capacity issues, poor corporate governance, unethical practices, distress syndrome and accelerated erosion of public confidence.
As at December 31, 2005,N360 billion and Direct Foreign Investment of $652 million and £162,000 were raised by banks.The unexpected level of success achieved has not gone unnoticed in the global market as evidenced by the improved rating of Nigerian banks. In the rankings, 20 of the 25 Nigerian banks are now in the top 100 banks in Africa; 17 are in the top 40 banks, while four are among the top 10 in Africa. Seventeen of the 25 banks are in the top 1,000 in the world.The banking sector was able to grapple with the Consolidation exercise and came out successfully.
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