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N500b Capital Base: Capital Needed By Commercial Banks With International Spread - Business (5) - Nairaland

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CBN Pegs Minimum Capital Base For Banks At ₦‎500 Billion / Kano, Ondo, Anambra Depositors Flood Banks With Old Notes / Customers Scam Banks With Fake Visas, Tickets For Forex (2) (3) (4)

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Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by phemray(m): 6:46pm On Mar 29
43Ronin:
Honestly this CBN governor is just very clueless! Where will commercial banks get the funds from? Even if they issue IPO how many nigerians can purchase and for what exactly? Why would any nigerian wan to tie their funds as shares?Does this fool even realise that the eventual mergers will lead to lay-offs? Thereby increasing the unemployment situation in a country where farming is basically a deadly job? Gosh! Why can't he instead issue federal govt bonds at massive interest rate like 15% so that he can mop up excess liquidity in the economy thereby dropping inflation? Then govt invest the funds into capital projects?

You are pitying banks that do remove customers money and declares heavy yearly profit, so where are the profits of several years. Restructuring of this kind has rendered many jobless even churches buying factories is the worse but people celebrate that cos it's religion. Cardoso is a world bank consultant, I believed he knows better. So anything that will make our financial institutions firm is welcome.
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by bluefilm: 6:53pm On Mar 29
What's the fate of Opay?

That's my only concern.

Other banks can close down or merger, if they so wish

But nothing should happen to my dear Opay in Jesus name

Amen
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by SWATMan: 7:08pm On Mar 29
43Ronin:
Honestly this CBN governor is just very clueless! Where will commercial banks get the funds from? Even if they issue IPO how many nigerians can purchase and for what exactly? Why would any nigerian wan to tie their funds as shares?Does this fool even realise that the eventual mergers will lead to lay-offs? Thereby increasing the unemployment situation in a country where farming is basically a deadly job? Gosh! Why can't he instead issue federal govt bonds at massive interest rate like 15% so that he can mop up excess liquidity in the economy thereby dropping inflation? Then govt invest the funds into capital projects?
...



He was once a bank CEO. He failed because he couldn't manage CITIZENS bank to profitablity. Now he wants to copy Soludo's bank recapitalization without a working document like the NEEDS doc developed and implemented as part of the OBJ's economic reforms. The present government needs a similar blueprint for this unrealistic economic approach to succeed.
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by alezzy13: 7:21pm On Mar 29
Dobodobo04:


Because banks would have to pass it to customers, don’t u agree?

I’m not illiterate. The fiscal system is still in its infancy, monetary tool of selling bonds and increasing interest rate are being deployed.

Asking banks for recapitalisation which CBN knows they will pass to customers is another subtle way of mopping up liquidity.

Unless there is some attraction or incentive, why on earth would I want to keep more of my funds in a bank?? Can they banks match the current mouth watering rates securities are offering??

Come on, if that was the intention - which I doubt - it doesn't make any sense

CBN has many tools in its arsenal to handle excess liquidity, recap is NOT one of them.
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by iamclime(m): 7:46pm On Mar 29
Even if GTBANK, UBN, and UBA join body, the money never still reach! Wahala go dey o!
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by FreeStuffsNG: 7:48pm On Mar 29
Lorddominic:


Union bank is 94% owned by the owners of Titan Trust bank....it was delisted from the NGX last year ending and has finally gone private
The sale has been cancelled and now owned by FG. It was part of the recommendations of the CBN special investigator and it was immediately implemented.

1 Like 1 Share

Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by ivandrag0n: 7:49pm On Mar 29
KingLennon:
Many workers will be retrenched and the suffering will increase. The banks will increase charges rate and the common man will still suffer it. Who dey advise BAT sef? sad



You’re so daft that even the daftest will call you daft!

So, strengthening the banking system in light of global economic challenges and risks to customers deposits is a crime, right?

You CHILDREN OF HATE are actually the world’s most stupid set of people, apart from the fact that you’re very evil.







When stupid people are at the helm of affairs in the country, the people suffer sad
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by Konquest: 7:51pm On Mar 29
References1:

Capital base of Nigerian commercial banks with international spread

New capital base: N500bn

Present capital => Capital need

1. Access: N251.81bn => N248.19bn

2. Fidelity: N129.71bn => N370.30bn

3. FCMB: N125.29bn => N374.71bn

4. First Bank: N251.34bn => N248.66bn

5. GTBank: N138.19bn => N361.81bn

6. Union Bank: N148.09 => N351.91bn

7. UBA: N115.82bn => N384.19bn

8. Zenith Bank: N270.75bn => N229.25bn


#CableIndex

Previous Thread
https://www.nairaland.com/8045096/cbn-pegs-minimum-capital-base#129158987
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by ivandrag0n: 7:51pm On Mar 29
43Ronin:
Honestly this CBN governor is just very clueless! Where will commercial banks get the funds from? Even if they issue IPO how many nigerians can purchase and for what exactly? Why would any nigerian wan to tie their funds as shares?Does this fool even realise that the eventual mergers will lead to lay-offs? Thereby increasing the unemployment situation in a country where farming is basically a deadly job? Gosh! Why can't he instead issue federal govt bonds at massive interest rate like 15% so that he can mop up excess liquidity in the economy thereby dropping inflation? Then govt invest the funds into capital projects?



You were not taught well in school and you’re shaming yourself by publicly propounding economy theory upside down.

Mergers usually create Economics of scale, ensure more robust financial entities and brings about more economic opportunities including but not limited to increased employment.

Stop exposing your illiteracy. It’s too crass.
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by Emperor5(m): 8:09pm On Mar 29
Instead of merger the bank should invite investors to buy share
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by ppogba: 8:19pm On Mar 29
Emperor5:
Instead of meager the bank should invite investors to buy share

Nobody including the CBN has mentioned merger except of course illiterate economists on Nairaland advertising their stupidity.
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by Emperor5(m): 8:20pm On Mar 29
43Ronin:
Honestly this CBN governor is just very clueless! Where will commercial banks get the funds from? Even if they issue IPO how many nigerians can purchase and for what exactly? Why would any nigerian wan to tie their funds as shares?Does this fool even realise that the eventual mergers will lead to lay-offs? Thereby increasing the unemployment situation in a country where farming is basically a deadly job? Gosh! Why can't he instead issue federal govt bonds at massive interest rate like 15% so that he can mop up excess liquidity in the economy thereby dropping inflation? Then govt invest the funds into capital projects?
Merger can't lead to lay-off employee... Lay-off employee happened when company wind-off
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by ppogba: 8:22pm On Mar 29
ivandrag0n:




You were not taught well in school and you’re shaming yourself by publicly propounding economy theory upside down.

Mergers usually create Economics of scale, ensure more robust financial entities and brings about more economic opportunities including but not limited to increased employment.

Stop exposing your illiteracy. It’s too crass.

Nairaland is a place to get enough laugh if you are bored especially with the comments of the ignoramuses you quoted.

I stopped replying him the moment he said the price of Access Bank today is N10.
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by Oyerinde16(m): 8:36pm On Mar 29
ppogba:


@2.so, banks will start saving,. borrowing and adopt.other.dubious methods to increase their capital bases?

Please go and educate yourself on what a bank capital base is.

@3 Is the employment of more marketing staff the method adopted when Soludo did the same thing?
Where do you people always get this beer parlour logics?
@4, most banks will borrow from where?
Perhaps,.the will borrow from NANS and NLC

Please go and do a bit of research on what the CBN Governor said and has requested the banks to do


And be less bold about spewing heresy.

Let me educate you small...

Banks can borrow from foreign financial institutions or organisation...

Banks have sold all thier shares but can become dubious by half. Or where will they get shares to sell again

If they don't do aggressive marketing, how do they want to do it... and yes during Soludo time a lot of people got bank jobstatement. ..
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by Oyerinde16(m): 8:38pm On Mar 29
OGUAF:


Just to add to what you've said

There's something called Tier 1 and Tier 2 capital for banks. Its used to caculate their capital adequacy ratio. Basically Tier 1 capital plus Tier 2 capital divided by their risk weighted assets( primarily the loans they have issued using customers deposits)gives you their capital adequacy ratio

Recapitalisation of banks has to do mainly with their "Tier 1 capital which covers shareholders equity(retained earnings, paid in capital etc) on their balanced sheet.

While Tier 2 capital is subordinated capital e.g debts and bonds they raised.

The most likely way out for banks is to issue new shares or merge


Issue new shares from where...

Yes a merger is a way out... but issues new shares from thin air, and in 352 days share holders are back for Thierry money and dividend... no way
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by Lekan239(m): 8:39pm On Mar 29
KingLennon:
Many workers will be retrenched and the suffering will increase. The banks will increase charges rate and the common man will still suffer it. Who dey advise BAT sef? sad
Is it bank that increased rate or CBN?








When stupid people are at the helm of affairs in the country, the people suffer sad
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by Denko2721987(m): 8:43pm On Mar 29
No wonder them just they debit person anyhow these days
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by Trojan8(m): 8:50pm On Mar 29
Dobodobo04:


Because banks would have to pass it to customers, don’t u agree?

I’m not illiterate. The fiscal system is still in its infancy, monetary tool of selling bonds and increasing interest rate are being deployed.

Asking banks for recapitalisation which CBN knows they will pass to customers is another subtle way of mopping up liquidity.

In reality, you can maneuver a definition that looks like this is to mop up liquidity and it can work but in reality you use debt instruments to do that. When you use instruments, you can guide those that you expect to subscribe to them hence mopping up liquidity.

When you ask banks to expand capital base, you don't exactly control where they source for funds which could make the desire to mop liquidity impossible. Say Access bank finally meet this recapitalization via foreign investment, would you say that the goal to mop up liquidity from the system was achieved? Meanwhile, if you were to issue Tbills via auction you know exactly who's buying.
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by Alliswell248: 8:53pm On Mar 29
KingLennon:
Many workers will be retrenched and the suffering will increase. The banks will increase charges rate and the common man will still suffer it. Who dey advise BAT sef?

U are the one suffering.









When stupid people are at the helm of affairs in the country, the people suffer sad
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by Solsix(m): 9:16pm On Mar 29
Finesse247:
U dey whine Opay? Don't play!
Opay can buy 3 banks. But that's not their strategy to have physical branches
Valuation does not mean capital base. The valuation of access bank is in trillions
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by Henrydata(m): 9:23pm On Mar 29
CartelKenneth:
Mergers and acquisitions galore loading
The big fish wil eat the small fish 😂😂😂
Bye bye keystone, sterling , fidelity and fcmb!!!

What of wema
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by LaIabobo: 9:46pm On Mar 29
Finesse247:
U dey whine Opay? Don't play!
Opay can buy 3 banks. But that's not their strategy to have physical branches

Capital base is different from valuation.

All big 5 banks -First Bank, Access Bank, UBA, Guaranty Trust Bank and Zenith Bank- all have market capitalisation of at least N1 Trillion each.

UBA declared 404billion profit last year alone.
Moreover, opay’s valuation is not 100% reliable like banks that we can all see their records on the stock exchange.
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by Bimpe29: 9:52pm On Mar 29
richidinho:
GTB fall my hand
The bank has not been doing any better.
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by LaIabobo: 9:53pm On Mar 29
Lanruze:
Check the valuation well. It's true that Opay has a higher valuation than Zenith Bank.

Take it or leave it, it's a two (2) year myth that has stunned the industry.

Opay is an international country with major presence in Nigeria. As such it's business cuts across a global space. The valuation captures it's total Global Assets.

You shouldn’t just believe valuation of private companies , especially fintechs o.

Banks are public companies and we can all verify their valuation every day on stock exchange. Zenith is currently valued over 1trillion naira. But Based on your news, Opay’s last valuation is around 822billion naira.
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by 43Ronin: 10:46pm On Mar 29
Elobolo:


Because you work in Access Bank HR right You sat on the board to lay off staff right?
Ask anybody you know who worked in Acces bank- I don't mean tellers. The organizational culture of Access was quite different than that of DB. Access recruited at most 24 entry level while DB was 30. Access had younger managers and brighter brains who had ethics DB did not have any of those. In fact while most AB loans were performing that of DB was not. Many of their staff had wrecked the bank by profiting of the bad loans and it was definitely a no-brainer for Access to retain them. Many DB peeps took the cash offer of AB and resigned others took their chances and still got fired. Most of the senior managers & EDs now of access bank are access core staff, what happened to that of DB. See ehn there's something called comparative management- it means that a mgt theory though correct might not necessarily work when employed. The biz mgt books will tell you that merger will bring more biz, gbogbo, but you have to compare it with naija situation. Imagine the overhead costs banks are running. GTB & AB lay-off every year (dey say it's those whose appraisal fall below acceptable limit grin) If they lay-off their own people to keep costs down how much more one small bank like Wema or Sterling that they acquire/merged just to meet CBN directive? Lots of people will lose their jobs as it is withergers and acquisitions
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by 43Ronin: 10:54pm On Mar 29
ivandrag0n:




You were not taught well in school and you’re shaming yourself by publicly propounding economy theory upside down.

Mergers usually create Economics of scale, ensure more robust financial entities and brings about more economic opportunities including but not limited to increased employment.

Stop exposing your illiteracy. It’s too crass.
This is just textbook definitions. The economies of scale in mergers benefit mostly manufacturing companies or commerce based companies. Banks are service companies and their economies of scale might even be negatively affected because costs have doubled with staff having duplicate functions. Below is a disadvantage of mergers according to CFI- the owners of CFA certification. Now who's illiterate

Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by Trojan8(m): 11:08pm On Mar 29
43Ronin:

This is just textbook definitions. The economies of scale in mergers benefit mostly manufacturing companies or commerce based companies. Banks are service companies and their economies of scale might even be negatively affected because costs have doubled with staff having duplicate functions. Below is a disadvantage of mergers according to CFI- the owners of CFA certification. Now who's illiterate

Keyword aggressive merger. There's no guarantee this would happen like that. Plus this requirement has levels to it. International, National and Regional. All banks know their levels and I personally feel that we won't see a lot of mergers.

The goal has always been to increase the capital base of our banks so they can be able to absorb shocks. If you look at the fact that the last recapitalization was done in 2008, then you would know this is long overdue. Infact naira and dollar exchange then was barely 100 naira to $1, you know the rate today. Why would I need a Nigerian bank to be valued at $1m in 2008 and rn that's less than $100k, doesn't make any sense. So this is a welcomed development. It's not even supposed to make noise because most banks have been waiting for this.

The only headache most banks have rn is the fact retained earnings was exempted otherwise it would have been a walk in the park for them. Best bet is to start pumping market price. If I need 100m GT bank shares to achieve this recapitalization. I would find a way to double my share price so I would need half of it to make it happen thereby reducing dilution.

I honestly don't see why the Cardoso administration is being dragged for doing what Emefiele should have done. It's needed and very much necessary.
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by naija4life247: 11:10pm On Mar 29
ppogba:


The CBN Governor CAN NEVER manage the monetary and the fiscal policy together.

Please go and find out what is fiscal policy.

Do not argue further.

At what point did Soludo say with Banks board of directors before coming up with the policy.

Do not bamboozle us further.


Na Agriculture Minister dey manage am nah. Nonsense without ingredients. Go and sit down somewhere before I forcefully sit your ass down.
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by Rolings: 2:45am On Mar 30
43Ronin:
Honestly this CBN governor is just very clueless! Where will commercial banks get the funds from? Even if they issue IPO how many nigerians can purchase and for what exactly? Why would any nigerian wan to tie their funds as shares?Does this fool even realise that the eventual acquisitions will lead to lay-offs? Thereby increasing the unemployment situation in a country where farming is basically a deadly job? Gosh! Why can't he instead issue federal govt bonds at massive interest rate like 15% so that he can mop up excess liquidity in the economy thereby dropping inflation? Then govt invest the funds into capital projects?

What's the use of 20 commercial banks that can't give common man loans they need?
If it's one or two strong banks that's will be able to do proper commercial banking that will emerge after this exercise so be it.....
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by Chienex24(m): 3:38am On Mar 30
Finesse247:
U dey whine Opay? Don't play!
Opay can buy 3 banks. But that's not their strategy to have physical branches

Wooow!! But biko, how true is this. Is Opay's market capitalization really around this amount?
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by Chienex24(m): 3:39am On Mar 30
aspabay:


The last recapitalization created more jobs This will bring in more investment and consequently more jobs

How? Please enlighten me.
Re: N500b Capital Base: Capital Needed By Commercial Banks With International Spread by Armaggedon: 5:28am On Mar 30
CartelKenneth:
Mergers and acquisitions galore loading
The big fish wil eat the small fish 😂😂😂
Bye bye keystone, sterling , fidelity and fcmb!!!
fide Wetin?

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