ItisWell22:
Not again 😩

Buddha3:


To run a bank, like any other business, there's a basic capital you must have. That capital is measured according to the dollar rate at any given time.

Over the years, seeing how naira has fallen drastically, most of the banks have lost their basic capital. A lot have merged with others because they couldn't keep the shop open anymore. The existing banks as of this moment, will have to gear up to increase their capital base from the previous amount, if they want to stay in business.

That means, more banks are going to fold up and be merged into others. Same way Diamond banks staffs across the Nation lost jobs when the bank merged with Access, is the same way more people are going to lose their jobs in the banks that will fold up.

Jboynokiaphone:


The recent devaluation of the Nigerian naira against the US dollar has raised concerns about the need to increase the capital base of Nigerian commercial banks. Analysts argue that the 2004 banking industry recapitalization, which raised banks' capital from N2 billion to N25 billion, has weakened due to the devaluation. The current exchange rate has significantly reduced the capital base of banks when converted to dollars. The Capital Adequacy Ratio (CAR) of the banking system stood at 12.8% as of April 2023, indicating a relatively stable banking system. However, experts suggest that recapitalization may be necessary to strengthen the banking industry and financial institutions due to the significant depreciation of the naira. They predict potential recapitalization amounts, such as N100 billion, which could lead to mergers and acquisitions and possibly job losses in Tier 2 and 3 banks. Some banks have already been engaged in capital-raising exercises through bonds and rights issues. However, there are differing opinions on whether regulatory-induced recapitalization should be implemented, with some advocating for market-driven recapitalization through mergers, acquisitions, or stock market participation. The incoming Central Bank of Nigeria (CBN) governor is expected to play a significant role in determining the approach to recapitalization. Overall, the sector's stability and ability to support economic growth will be crucial factors in the decision-making process.

CondenseMilk:


In 2004, before you owe a license to operate a bank, you must have 25billion naira ($250m as at then ) Worth of asset


Now, that 25b naira with the current dollar rate is worth less than $33m as at now.


Meaning that your money in the bank is at risk, so there's need for those Banks to raise their assets to about 100b naira so as to protect their customers.





The only solution is Merging of Banks