₦airaland Forum

Amid a worsening business environment, Deposit Money Banks (DMBs) may, “commence massive staff retrenchment in Q2 2016”, Managing Director, Financial Derivatives Company Limited (FDC), Mr. Bismarck Rewane, has predicted.

The influential economist, who made this forecast in his firm’s projection for 2016, also stated that State governments will retrench a significant number of workers in the first quarter of this year.

He, however, predicted that, “There will be massive civil works and construction (of roads, bridges, railways) in 2016 (and) oil prices will recover to $55pb by Q2’2016.” Rewane further forecast that, the benchmark interest rate-the Monetary Policy Rate (MPR)- will be reduced to 10per cent per annum while the Cash Reserve Ratio (CRR) to 15per cent.”

According to him, “Accommodative monetary policy- lower interest rate and increase liquidity -and expansionary fiscal policy- bailout payment and N6trillion proposed budget will reflate the economy.”

Other predictions made by the FDC boss include that, “Inflation will spike to 11per cent in Q1’2016 before falling to 9per cent in Q3’2016; official rate of the naira will depreciate to N220/$ (and) parallel market rate will appreciate to N235/$.”
Industry sources said that although 2015 was tough, banks are bracing for an even more difficult 2016.

This is because with the price of oil, which is responsible for 70 per cent of Nigeria’s revenue predicted to fall to $20 per barrel, lenders may be forced to restructure their credits and debts locally and abroad.

Findings reveal that majority of the debtor oil firms and others linked to it – that have calculated their repayment terms with the pre June 2014 price of crude oil, would be compelled to renegotiate their loans.

This implies that banking industry’s ratio of nonperforming loans would exceed the stipulated 5 per cent threshold. Indeed, in a statement issued last month, Fitch Ratings noted that Nigerian banks’ non-performing loans have been rising over the past 12 months.

“We expect them to rise above the central bank’s five per cent of total loans cap but to remain below 10 per cent at year-end,” the agency stated.
Similarly, banks that have borrowed foreign denominated currencies would also be forced to restructure their debts as the naira is being expected to be devalued by a minimum of 22 per cent – meaning that lenders would have to put in extra efforts to generate enough cash to repay their debts. Furthermore, analysts point out that banks are still reeling from the full implementation of the Treasury Single Account (TSA).
It will be recalled that the policy led to the withdrawal of public sector deposits-a cheap source of funds for lenders.
A bank executive, who spoke on condition of anonymity because of the sensitive nature of the issue, told this newspaper that the tough times that the industry faced last year were likely to be child’s play compared to what it will face this year.
SEE ALSO: 2016: Mark tasks Buhari on economy
He pointed out that the International Monetary Fund’s (IMF) recent prediction that oil could slump to $20 per barrel in 2016 had made prospects for Nigerian banks this year worse.
He said, “If the IMF’s prediction comes to pass, the impact on the industry will be devastating. Banks are highly exposed to the oil and gas sector. But these loans were given out when oil prices were above $100.
“Since June 2014 when the sharp decline in the price of oil started, many of these companies have begun to default on their loans. This has resulted in most banks having to restructure these loans.
“But any further decline in oil prices as the IMF is predicting will clearly make the situation unmanageable and we could have another crisis triggered by a surge in Non-Performing Loans (NPLs).”
The Central Bank of Nigeria (CBN) in its Financial Stability Report for December 2014 had noted that sustained low oil prices could trigger an increase in NPLs especially as the exposure to the oil and gas sector accounted for 25.70 per cent or N3.24 trillion of the total credits of N12.63 trillion at end- December 2014.

https://www.today.ng/business/61678/banks-to-sack-staff-in-second-quarter-rewane?utm_source=&utm_medium=twitter

Did i heard ngege denying about collecting CV? Only God will help us

merbenko:
Nijja

NA SO WE SEE AM, AND BUHARI DEY HELPLESS

Sacking isn't a new language in the banking sector.
Next news abeg

Today they are sacking, tomorrow they are recuriting. Next news abeg

UNTILL SOMEBODY FATHER, BROTHER OR SISTER IS SACKED, THAT WHEN SO PEOPLE WILL THIS THIS NEWS SERIOUS

Joblessness and loneliness are two things that can kill a man/ woman fast.

We are still complaining we don't have enough bank staff to attend to we the customers, here another report talks about probable sack... Nna mehn, everything in Naija odikwa risky.. Abeg is my IBO getting better?

God save the bankers and their banks.
Btw, why can't these people just get it into their skull? WE ARE NOT DEVALUING THE NAIRA AGAIN FOR NOW.

The CBN governor, Finance minister, and indeed President MB should reject in all ramifications these calls from IMF and these investors to further devalue the Naira, or allow it to be controlled by open market forces.

Should the Naira be devalued further, prices will skyrocket, inflation will go up, Naira will have no value, civil servants will demand for salary increase, poverty will reign supreme.

All these media sponsored campaigns are from heavy foreign investors who will make huge margins from their "hot cash" investments. They have been propounding all sorts of economic theories in support of devaluation. The same way they propounded theories upon theories for Greece and Greece is now forever indebted to EU nations and IMF with no sight of recovery.

We need sustainable, gradual growth that includes the low, average, middle income earners in the country.

Emefiele has my support on his theories.

By the time Buhari is through with this country... Nigerians would truly know the meaning of Change!!!


Chai Baba!!!

Shior

Blame the resource dependent economy.

When you rely on selling one resource....once the price of the resource drops....you get into trouble.....and IMF becomes your master.

When you rely on industries, and scientific development....you are wealthy and free from the IMF.

BUHARI OOOOOOOO

CHANGE..
don't worry Nigerian's PMB wants you all to be jobless so that he will pay you all 5k monthly......its a promise.

Well, most of the bankers should have grown their entrepreneurial skills & start-up capital by now since no one knows better than them on job insecurity in the Nigerian banking sector.

It's not fashionable to be a banker these days, one leg in one leg out.

Gods people exempted....... its for sure.

for those bankers who spend as they earn without any reasonable savings, e no go easy for una..

any smart and good thinking banker knows that saving for the rainy day is a priority...

Its expected. The banking industry aint a place to be

Ananana

Tension in the air. Heart beat increase from 71 to 150 beat per minute.

The Children of God are exempted.

k

Unfortunately man no be God, crude oil price have skyrocketed to 55 dollars per barrel, the geometric increase is a result of the Iran / Saudi Arabia lingering crisis

Change

People who blames PMB for this act caused by the last corrupt clueless government may as well blame PMB for none performance with their wives during S*x at night. Ignorance is worse than stealing.

na wa o

Hahaha
#Onechancebus

Nigeria is collapsing o

It is well