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Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed - Politics - Nairaland

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Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by softplaceng: 8:15pm On Oct 20, 2019
Don’t panic , no Nigerian bank is distressed… Emefiele …

As CBN comes hard on telcos extorting banks, customers with USSD Amaechi Ogbonna, and Juliana Taiwo Obalonye, Washington DC
Governor of the Central Bank of Nigeria ( CBN), Mr Godwin Emefiele, yesterday, allayed fears over speculated distress syndrome in Nigeria’s banking industry following seven banks failures to scale its recent stress tests.Emefiele who made the clarification at a briefing to roundoff the 2019 annual meetings of the International Monetary Fund and the World Bank in Washington DC, said the Nigerian banking industry still stands on a sound footing hence the widespread speculations about insolvency should be ignored by the banking community.The governor said “First, I will reiterate that the strategic health of the Nigerian banking industry remains very strong.

The Central Bank has as a matter of policy in 2015 tried to avoid being sensational about stress testing which has become part of our daily, normal routine in trying to check the strategic health of the Nigerian banking industry. So what you will find is that from time to time, maybe one bank fails one ratio, we advised that the bank should improve on that ratio, whether it is capital adequacy, liquidity or other forms of prudential ratio that we will prescribed to the banking industry.So the fact that you have read that seven banks failed stress test does not mean that those banks are weak.

”According to him, if for instance Bank A fails on liquidity, we will try to work with that bank to ensure it addresses its liquidity, and if another one fails capital adequacy which is also part of the stress testing parameters that we use, we also counsel it about the best ways of addressing the capital adequacy issue.Emefiele said that such alerts are all part of the bank’s regulatory functions and should not be seen as an indication of insolvency as it has nothing to do with the weakness of any bank in the industry that would warrant any panic or systemic crisis in the banking industry.The governor ‘s clarification came as the apex bank’s recent stress test showed that seven of Nigeria’s 24 banks were not adequately funded in 2018, according its latest financial stability report. The stress test is part of CBN’s efforts to significantly minimise the impact of risks on the Nigerian financial system.

Other highlights of the report showed a baseline capital adequacy ratio (CAR) for the banking industry at end-December 2018 was 15.26 per cent, indicating a 3.18 per cent points increase from the 12.08 per cent recorded at end-June 2018.
In a financial stability report published on its website on Thursday, October 17, the apex bank revealed that in less than 30-day period analysis, seven Nigerian banks were not adequately funded, while in the 31-90 day bucket, nine banks had funding gaps.Overall the cumulative position for the industry showed an excess of N4.8 trillion assets over liabilities Although the banking regulator did not mention the names of the seven of the banks, the entire industry has since been abuzz with wide speculations about institutions that could likely fit into the category.A stress test is used to test the resilience of financial institutions against any future situations. It is done to help check the level of a bank’s assets, as well as evaluate internal processes and control. The result also revealed that under 5-day and cumulative 30-day run scenarios on the banking industry, liquidity shortfalls declined to N1.58 trillion and N1.98 trillion respectively.

Meanwhile, the Central Bank of Nigeria ( CBN ) has ordered commercial banks to immediately reject telecommunications companies whose USSD transactions come at inflated costs. CBN Governor Godwin Emefiele, who gave the advice in Washington DC, said he had already told bank chief executives to move their businesses and traffic to telecom companies that are ready to provide USSD services at the lowest possible, if not zero cost, in line with the bank’s objective to raise the nation’s financial inclusion target to about 80 per cent by2020.He said the controversial issue of USSD came up at a meeting with the telecommunications companies a few months ago where he appealed to them to lower their charges. He however regretted that some of the mobile operators are still charging high rates which prompted the latest directive to banks.USSD (Unstructured Supplementary Service Data) is a Global System for Mobile(GSM) communication technology used to send text between a mobile phone and an application programme in the network. He said, “ On USSD, that is a very important one. About five months ago, you are aware that there was a drive for us to deepen financial inclusion in Nigeria. I had even made my commitment to Bill Gate Foundation and Queen Maxima that we will deepen financial inclusion and that by the end of 2020, the rate of financial inclusion would have been increased by 80 percent. At this time we are close to about 65 percent. We moved from 42 to about 65 percent in about 18 months. And we believe that we can achieve this 80 percent if everybody, including the banks and the telecom companies cooperate with us.About five, four months ago, I held a meeting with some telecom companies as well as the leading banks in Nigeria at Central Bank Lagos. The issue of the cost of USSD came up, it is not actually N4 I hear is about N1,500 per minute. And at that time, we came to a conclusion that the use of USSD is a sunk cost. What we mean by a sunk cost is that it is not an additional cost on the infrastructure of the telecom company. But the telecom companies disagreed with us, they said it is an additional investment on infrastructure and for that reason they needed to impose it.

I appealed to them that they should please review this downward but they refused. I understand almost about three four weeks ago, rather than even reducing they went ahead and increased it from N1,500 to N4,500, that is 300 percent. I opposed it. And I have told the banks that we will not allow this to happen.The banks are the people who give this business to the telecom companies and I leave the banks and the telecom companies to engage. I have told the banks that they have to move their business, move their traffic to a telecom company that is ready to provide it at the lowest possible if not zero cost. And that is where we stand and we must achieve it.
Meanwhile, in its reaction to text messages on N4 per second charge on USSD, from October 21, the Minister of Communications, Dr Isa Ali Pantami the Federal Ministry of Communications said his ministry is unaware of the development and has hereby directed the sector regulator, the Nigerian Communications Commission (NCC) to ensure the operator suspends such plans until he is fully and properly briefed.

https://www.sunnewsonline.com/no-nigerian-bank-is-distressed-cbn-governor-emefiele/amp/

Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by Dewze(m): 8:22pm On Oct 20, 2019
When they say "don't panic", that is when you should start panicking.

31 Likes 1 Share

Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by Virus99: 8:22pm On Oct 20, 2019
cool ok good
Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by softplaceng: 8:24pm On Oct 20, 2019
Dewze:
When they say "don't panic", that is when you should start panicking.

lol lalasticlala

1 Like 1 Share

Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by Virus99: 8:27pm On Oct 20, 2019
softplaceng:

lalasticlala

softplaceng:


lol lalasticlala

Wait... why are you calling lala... Is he a bank owner ?! undecided
Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by rentAcock(m): 5:10am On Oct 21, 2019
Whether they want to admit it or not, the global economy is due for a recession next year and many banks may become insolvent. China's economy grew the slowest in 30yrs. Trump will be impeached and the economy is already showing signs of of a pending crash. BREXIT is a total mess and there's no leadership in the UK. Germany and the rest of Europe have negative yield, meaning you can borrow money from the bank as loan and instead of you paying interest, the bank will pay you interest. Nigeria has closed its borders which will result in economic downturn in west africa that may ripple to affect the whole continent and Nigeria as well.

The global economy is intertwined, no one lives in a vacuum anymore.

14 Likes 2 Shares

Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by africandollar: 5:14am On Oct 21, 2019
Nje kin se wipe awon kini oponu wonyi fe fi owo wa ta tete bayi? Ki Oluwa re yara m'orin lo gba gbogbo owo e ki won to maa so 'stories that touch' o!

3 Likes

Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by MetroBaba1(m): 5:14am On Oct 21, 2019
Do something to stop this nonsense. Don't tell us not to panic.

1 Like 2 Shares

Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by donaldde2: 5:16am On Oct 21, 2019
Who get time for Monday morning to read all this handout material. Una try well. U see person wey no get work shey?
Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by HacheNoire: 5:18am On Oct 21, 2019
Thanks for the re assurance


I was almost going to withdraw my remaining NGN1250 this morning

2 Likes

Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by Atari28: 5:18am On Oct 21, 2019
Inflated cost??
This is total bullshit

1 Like 1 Share

Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by chriskosherbal(m): 5:21am On Oct 21, 2019
Dewze:
When they say "don't panic", that is when you should start panicking.
grin savage



Check out my signature for your sexual stamina .
Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by mercyviv(f): 5:21am On Oct 21, 2019
Mr Emefiele please be honest with us, which 7 Nigerian banks currently failed this your distress test?! I can't make money with my sweat and one bank will now crash with it...with this Nigeria of today?!!
Meanwhile...
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Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by InvertedHammer: 5:31am On Oct 21, 2019
Dewze:
When they say "don't panic", that is when you should start panicking.
/
They need more time to milk the last drop.

That's why bank failures are announced on Fridays. By Monday, stern-looking policemen will be manning locked gates.

ACB, CCB, UCB, Progress and Community banks came to mind.

/

1 Like

Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by Myself2(m): 5:44am On Oct 21, 2019
rentAcock:
Whether they want to admit it or not, the global economy is due for a recession next year and many banks may become insolvent. China's economy grew the slowest in 30yrs. Trump will be impeached and the economy is already showing signs of of a pending crash. BREXIT is a total mess and there's no leadership in the UK. Germany and the rest of Europe have negative yield, meaning you can borrow money from the bank as loan and instead of you paying interest, the bank will pay you interest. Nigeria has closed its borders which will result in economic downturn in west africa that may ripple to affect the whole continent and Nigeria as well.

The global economy is intertwined, no one lives in a vacuum anymore.

Some will call you a prophet of doom.
However you are 90% on point

4 Likes

Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by Domclem(m): 5:47am On Oct 21, 2019
Na so we de always hear stories like dis, b4 u knw voooom, all hell break loose and deris distress in the banking sector undecided undecided undecided

1 Like

Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by Criticaltemp: 5:49am On Oct 21, 2019
How can they be distressed, do u know how much they chop from our little savings every day? Charging us at every little transactions? Useless government

2 Likes 1 Share

Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by ecolime(m): 5:53am On Oct 21, 2019
CBN Policies are the main reason for all these "distresses" coupled with mismanagement on the part of the banks' top officials.

Banks are struggling to survive yet you fine them at the slightest opportunity. You want them to give out loan to every Tom, dick and Harry. When the loan goes bad, you want them to make full provision for it. You penalize them for recycling old notes yet you still charge them for replacing mutilated notes while you still refuse to print new notes. Even when new notes are printed, they are diverted to road side resellers.

Doing business is Nigeria is harsh. Regulatory headwinds is too tough.

CBN is killing our banks!

5 Likes 2 Shares

Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by lyriclekidd(m): 6:05am On Oct 21, 2019
Okay

Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by eneyoduke(m): 6:12am On Oct 21, 2019
Dewze:
When they say "don't panic", that is when you should start panicking.
Their panic with MMM has no different
Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by VivyZub(f): 6:48am On Oct 21, 2019
Affordable children educational android tablets. Please go through my thread for pictures, functions and specifications and please check my signature for contact
Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by chachanga: 6:53am On Oct 21, 2019
Why would any be?

With all the terrible deductions and surcharges made on customers and CBN anti-people/pro-Banks policies?!

They did her celebrating supernormal profits.
Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by einsteine(m): 7:06am On Oct 21, 2019
Never believe any news until it has been officially denied.

2 Likes

Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by Josh44s(m): 7:29am On Oct 21, 2019
I know Access Bank and Diamond Bank holds the number one and two spot among the 7 distress banks. If you know you know. I don move my cash in those banks to an old papa bank called Union Bank

2 Likes

Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by bixton(m): 7:32am On Oct 21, 2019
rentAcock:
Whether they want to admit it or not, the global economy is due for a recession next year and many banks may become insolvent. China's economy grew the slowest in 30yrs. Trump will be impeached and the economy is already showing signs of of a pending crash. BREXIT is a total mess and there's no leadership in the UK. Germany and the rest of Europe have negative yield, meaning you can borrow money from the bank as loan and instead of you paying interest, the bank will pay you interest. Nigeria has closed its borders which will result in economic downturn in west africa that may ripple to affect the whole continent and Nigeria as well.

The global economy is intertwined, no one lives in a vacuum anymore.


It's insincerity about businesses and financial institutions that is causing all this challengees.
If only they can modify the trade by barter system to suit the times, we would have less issues.

1 Like 1 Share

Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by CotenantNIG: 7:42am On Oct 21, 2019
Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by Burgerlomo: 7:43am On Oct 21, 2019
Why should I panic when all my money is under my bed and ceiling cool

2 Likes

Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by MichaelUweh(m): 7:55am On Oct 21, 2019
But let me ask, Do we have any reason to believe this government again 'coz for 4yrs+ now it's always negativity....
Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by samorobo: 8:11am On Oct 21, 2019
rentAcock:
Whether they want to admit it or not, the global economy is due for a recession next year and many banks may become insolvent. China's economy grew the slowest in 30yrs. Trump will be impeached and the economy is already showing signs of of a pending crash. BREXIT is a total mess and there's no leadership in the UK. Germany and the rest of Europe have negative yield, meaning you can borrow money from the bank as loan and instead of you paying interest, the bank will pay you interest. Nigeria has closed its borders which will result in economic downturn in west africa that may ripple to affect the whole continent and Nigeria as well.

The global economy is intertwined, no one lives in a vacuum anymore.

If Trump is Impeached that might stop the us-china trade war and return resources prices back to normal....
Let's just see how this credit plays out
Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by COURVOISier(m): 8:19am On Oct 21, 2019
There's fire on the mountain
Re: Godwin Emefiele: Don’t Panic; No Nigerian Bank Is Distressed by kelvxyn: 8:25am On Oct 21, 2019
Are the banks complaining?
ecolime:
CBN Policies are the main reason for all these "distresses" coupled with mismanagement on the part of the banks' top officials.

Banks are struggling to survive yet you fine them at the slightest opportunity. You want them to give out loan to every Tom, dick and Harry. When the loan goes bad, you want them to make full provision for it. You penalize them for reclying old notes yet you still charge them for replacing mutilated notes while you still refuse to print new notes. Even when new notes are printed, they are diverted to road side resellers.

Doing business is Nigeria is harsh. Regulatory headwinds is too tough.

CBN is killing our banks!

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