Urgent1Million:
Male marketers in banks should start looking for other jobs.
Female marketers should start polishing their kuntus to fvck like mad because they're the only ones who'll meet the new outrageous targets that the banks are about to set for them.
And the male money bags are already planning their escapades with the marketers.
I wish I didn't type this. Sadly, it's the unfortunate truth.

Seat out on issues beyond you. U think it's marketers that will shore up capital base??

emkz:


Only banks with international accreditation would need 500 billion naira. Others with national accreditation need 200 billion while regional banks need 50 billion naira.

With 500 billion naira funds as capital base, the bank is seen as very strong, and systemically important to the country and continent. With such strength, they can mobilize more deposits from more customers, capture the unbanked population, and that means they may attract more investors to take loans for business, mortgage, auto, fees and so on; or buy more shares and they'd be able to mobilize high ticket loans which servicing can give them more profits and shareholders are happy.

Corporate governance and internal controls would be more stringent. The era of bank MDs living like kings would also be over because people who have put their funds into those banks as investors would put them under pressure.

Almost all Nigerian banks except for few have offices and branches outside the shores of Nigeria.

I see alot of them the last time I was in Nairobi Kenya

This does not smell right.

Why is the country going back to the pre-Soludo days when poorly capitalized banks were always crashing?

Why does the CBN governor want to take us back to the dark days?

I suspect the primary reason why Soludo preferred banks be well capitalized was that when banks failed, those involved went scot free. It is better then that the banks be too big to fail.

With this new low capital base for some banks, I suspect it's to give way to many who wanted to set up banks but did not have the financial muscle to do so.

I also suspect it's too enable corruption. It's now easy for corrupt politicians and businessmen to use this to launder money and get very rich.

Paraman:
we shall see

as usual a f00000l talking from his anus

See people under rating Wema bank not knowing that Wema has affiliation with most financial tech institutions like flutter, piggy vest and so on

This is one of the APC trained economists.

None of them have degrees in economics or finance, none of them run a successful international business but ALL of them pop up on Nairaland to tell us how Tinubu's fart will lead to the appreciation of the Naira.

When you try to tell them that the strength of a currency is dependent on the goods and services that country is producing and exporting, they simultaneously shout you down since they have been instructed from APC misinformation quarters that they should attack anyone who says that Production and Export are the foundation of currency appreciation.

Anybody who believes that increasing capital base is what makes your currency stronger is a compound fool.

Naira is rising currently because a lot of people are selling off their forex in fear of loss.

When this period passes and there are no more private dollars to sell off- it will be clear that the Naira is standing on one leg in a hurricane.

Donaldoni:


Just shut up if you don't know what to say.

Now, the banks will be in a mad. desperate rush to have Naira thereby mopping up excess liquidity from the system.

The Naira will then appreciate!

seunmsg:
All our commercial banks will have to source for more capital including investment from foreign partners. This will bring more forex into the country and strengthen the banking system. The positive impact will flow to the capital market and other associated organizations. This is super bullish for the country.

It's open to abuse.

I come from an era where those responsible for bank failures went scotfree. That was one reason why Soludo wanted s huge capital based so they'll be too big to fail.

Also, the low capital may invite many unsavory characters from politicians to fat cats to set up banks to launder cash or engage in sharp practices.

What stops many Northern politicians setting up non-interest banks to protect their ill-gotten wealth?

Too many banks are bound to be set up and I doubt the quality of CBN supervision. Also, can it take on untouchable fat cats and politicians.

Penguin2:
When I said in the other thread that buffoons have taken power in Nigeria, it seemed like I was just hating on Tinubu government but it’s the truth.

Or tell me what this particular policy is meant to achieve.

Explain it to me like I’m in nursery school.


In the end, what they will achieve is that banks come together and merge together so they can get the 500billion naira base capital. That’s how we will end up having about just 5 commercial banks remaining.

So, ultimately they will end up shrinking Nigerians’ choices and leaving us at the mercy of just few banks who will treat us as they like because our options are limited.

If you disagree with this, then tell me the advantages of this policy.

I’ll wait

Stop judging!

The 500bn capital base is not as draconian as it sounds. I won't be surprised if many of those expected to having done so already or can easily do.

The N200bn base is also easily achievable for those involved. 125bn in 2004 was $800m. N200bn today is $140m. It's only N75bn existing banks needs to hit the N200bn mark. 75bn is about $55m.

At the end of the days, perhaps the number of presently existing banks will be reduced to 15 from the current 21.

You also overlooked the new capital base for regional banks, merchants bank and non-interest banks. This will bring in more players into the industry.

Paraman:
The likes of wema and unity bank might become regional banks again.

Yes oo. FCMB may not make the cut as the founder with his contacts is no more. Polaris , octopus, parallax and providus may also become regional banks.

Elliotwaveforec:

Don't be lazy guy!

Wema has 118b already projecting 156b this year

I think you're wrong.

Shareholders fund is not the same as Share capital.

Based on the information you attached, Wema's current share capital is only N6.3b.

However, I believe (I stand to be corrected) it can convert part of its Shareholders fund of N118b to boost its share capital by for example, issuing bonus shares to existing shareholders.

This is jus too much .

From 25 b to 200 b

Haba

Most banks Will withdraw from international transaactions

seunmsg:


Who told you Wema bank can’t raise the new N500b capital base?

They cant

DeLaRue:


Wema is not international, so it will only need to raise its capital to N200b. That's still a lot for Wema.

I even thought Wema bank shut down sef

The capital base is promising sha..

grandstar:


Stop judging!

The 500bn capital base is not as draconian as it sounds. I won't be surprised if many of those expected to having done so already or can easily do.

The N200bn base is also easily achievable for those involved. 125bn in 2004 was $800m. N200bn today is $140m. It's only N75bn existing banks needs to hit the N200bn mark. 75bn is about $55m.

At the end of the days, perhaps the number of presently existing banks will be reduced to 15 from the current 21.

You also overlooked the new capital base for regional banks, merchants bank and non-interest banks. This will bring in more players into the industry.

How would regional and merchant banks stimulate growth of the economy?

Penguin2:

How would regional and merchant banks stimulate growth of the economy?

They'll perform the actions of a commercial bank but only for a region i. e Southwest.

For some reason, I sense Tinubu has a hand in this.

I see many drawbacks as the low capital base may see the influx of sleazy fat cats and politicians setting up banks, especially non-interest banks.

What stops a Northern governor setting up such a bank to launder his I'll gotten wealth?

There are advantages and disadvantages to the present policy. But the biggest drawback is we live in a country where those responsible for bank failures rarely go to prison and where depositors (uninsured portions of their savings) wail in despair.

I come from an era from bank failures were very common.

kolamilan:
Make I go remove my #1,500 from Wema. Cos I no say dem no fit meet up.

LoL. The way una dey under-rate Wema Bank eh. I think Wema Bank happens to be Nigeria's most under-rated bank.

This is a bank that already has the following as per their 2023 financial year report:

Cash and cash equivalents: N264.81 billion

Restricted deposit with CBN: N503.32 billion

Loans and advances to customers: N802.36 billion

Total Assets: N2.175 trillion

You guys should try and get the most current information on Nigerian banks and stop all this habits of relying on hearsay.

grandstar:


They'll perform the actions of a commercial bank but only for a region i. e Southwest.

For some reason, I sense Tinubu has a hand in this.

I see many drawbacks as the low capital base may see the influx of sleazy fat cats and politicians setting up banks, especially non-interest banks.

What stops a Northern governor setting up such a bank to launder his I'll gotten wealth?

There are advantages and disadvantages to the present policy. But the biggest drawback is we live in a country where those responsible for bank failures rarely go to prison and where depositors (uninsured portions of their savings) wail in despair.

I come from an era from bank failures were very common.

You can imagine the reason for my misgivings with the policy.

My suspicion is that they are trying to run some bank owners out of business and try to use their men to set up new banks.

Tinubu has that tendency

Good one.

seunmsg:


Who told you Wema bank can’t raise the new N500b capital base?

And they have been regional bank for ages?

DeLaRue:


I think you're wrong.

Shareholders fund is not the same as Share capital.

Based on the information you attached, Wema's current share capital is only N6.3b.

However, I believe (I stand to be corrected) it can convert part of its Shareholders fund of N118b to boost its share capital by for example, issuing bonus shares to existing shareholders.

Issued capital plus reserved is equal to new capital.

13 billion shares issued at the nominal price of 50k is equal to 6.3 billion.

Companies usually issue shares at a premium far above the nominal price of 50k; they could sell at 1,000 per share. The difference between the nominal and selling price is transferred to Reserve.

May I ask you? Have you bought shares from primary market before? If yes, bring out the prospectus and educate yourself.

If you make profit and plough it back into your business, does your capital increase or decrease? Come on, this is basic accounting! Weren't you a commercial student in secondary school?

🤔

Antoeni:
This will force some consolidation but given the macro conditions at the moment might not be the best time for the rebase.

Penguin2:

How would having about 5 commercial banks with 500billion naira capital base attract investment?

They have other funds like retained earnings, fixed assets etc.
What CBN wants them to do is to increase what they are keeping as ‘insurance money’ or investors’ money to N500billion.

Some of them have trillions of Naira in retained earnings and profits.

When come together, there’s synergy and economy of scale.
They are then able to fund big projects like private railways, independent power generations, transmissions, distributions etc. because they now have resources pooled together that only one bank cannot boast of before.

It’s like you are 5 boys in a room and you all can’t afford a double decker radio tape of N3 because you all, individually, have N1 each.
If you all pool your money together, you now have N5 and can, conveniently, buy a double decker radio tape of N3 and still have N2 remaining.

bitbillionaire:


LoL. The way una dey under-rate Wema Bank eh. I think Wema Bank happens to be Nigeria's most under-rated bank.

This is a bank that already has the following as per their 2023 financial year report:

Cash and cash equivalents: N264.81 billion

Restricted deposit with CBN: N503.32 billion

Loans and advances to customers: N802.36 billion

Total Assets: N2.175 trillion

You guys should try and get the most current information on Nigerian banks and stop all this habits of relying on hearsay.

All these may not add to the N500b CBN wants them to have.

XBN only what’s their issues and fully paid up capital ( including premium) to be minimum of N500b.

They can’t use retained earnings or other assets value.

So, many banks would have to go and issue fresh ordinary shares to meet up.

VanuatuWycombe:


They have other funds like retained earnings, fixed assets etc.
What CBN wants them to do is to increase what they are keeping as ‘insurance money’ or investors’ money to N500billion.

Sone of them have trillions of Naira in retained earnings and profits.

When come together, there’s synergy and economy of scale.
They are then able to fund big projects like private railways, independent power generations, transmissions, distributions etc. because they now have resources pooled together that only one bank cannot boast of before.

It’s like you are 5 boys in a room and you all can’t afford a double decker radio tape of N3 because you all, individually, have N1 each.
If you all pool your money together, you now have N5 and can, conveniently, buy a double decker radio tape of N3 and still have N2 remaining.

Thank you!

At least it’s good to see that there good sides to the policy.

Penguin2:

Thank you!

At least it’s good to see that there good sides to the policy.

You are welcome sir.

seunmsg:


We are going to see more. This will be very massive.

Kadoooooso Mutairu! Bo o o ni o? Eku odun o. I am with Cardoso Michael, your younger brother, to celebrate Easter. Care to join us?