₦airaland Forum

cckris:
In 1929 Bankers were committing suicide, & you're talking of sack.

HiddenShadow:
Keep dreaming of a war that won't breakout
You guys wanted Change and now you guys are complaining after seeing your mistake.
Live with your choice.
No war will breakout.

kayfra:
Folks pray and pray hard coz our economy is about to get worse.

Our banks are seriously exposed to the oil and gas sector and are currently sitting on a heavy debt and bad loans that are dollar denominated. Most of our banking liabilities are in dollars. We already know of first banks issue with SeaWolf oil and Atlantic energy. TSA has taken easy government money off the table.

On the flip side, our banks have most assets denominated in naira and the only saving grace is the fake official exchange rate that pegs naira at an artificial value. If CBN devalues naira, to track with the market, i see bank balance sheets going into the toilet. Net liabilities will go high and not a lot of room to write off. AMCON is already in the red with so many debt write offs and it will take a very long time for inflation to catch up. We are headed for a tail spin crisis. Major Murphy's law.

Already, most banks are in distress and it's been a hush hush affair. But the impending devaluation will crash everything.

Am I missing anything?

This is not a PDP vs APC post. Just facts on ground.

HiddenShadow:
Oil will never rise
Do you know wreplace any oil not supplied by OPEC and others.
Now tell your dumb President to restructure Nigeria along True Federalism so that all states will be encouraged to become productive

kayfra:
Folks pray and pray hard coz our economy is about to get worse.

Our banks are seriously exposed to the oil and gas sector and are currently sitting on a heavy debt and bad loans that are dollar denominated. Most of our banking liabilities are in dollars. We already know of first banks issue with SeaWolf oil and Atlantic energy. TSA has taken easy government money off the table.

On the flip side, our banks have most assets denominated in naira and the only saving grace is the fake official exchange rate that pegs naira at an artificial value. If CBN devalues naira, to track with the market, i see bank balance sheets going into the toilet. Net liabilities will go high and not a lot of room to write off. AMCON is already in the red with so many debt write offs and it will take a very long time for inflation to catch up. We are headed for a tail spin crisis. Major Murphy's law.

Already, most banks are in distress and it's been a hush hush affair. But the impending devaluation will crash everything.

Am I missing anything?

This is not a PDP vs APC post. Just facts on ground.

735i:
I respect your point of view...but i do not totally agree.
Impairments are rising...True
but the banks are also making a killing from exchange rate differentials...
Q3 results of some Tier 1 banks are not as bad as people make them look.

Look out for FY results of Tier 1 banks... Some of them will shock you positively.
Then i know that some banks have already recorded Y-o-Y growth in revenues for Q1 2016 from activities in Jan and Feb alone....

Mate...theres quite a lot going on that you're not aware of

cekhoe:
so should we start making withdrawals?

cckris:
APC people who talk before thinking.
You people hired Obama's campaign manager, now do in Nigeria what Obama did for America in 2008.

seguntijan:
A quick reminder for those who wore the pro-Jonathan uniforms between 2010 and 2015:
Our obsessive assessments of President Muhammadu Buhari's administration, and his candidacy years before he was sworn into this Office, aren't expressions of regrets or mortal disappointments in him.
If an election is conducted even today between Buhari and Jonathan, I won't have a second thought before I cast my vote against Jonathan, whose government almost legitimised corruption, and was cruel to the point of diverting funds meant for counterterroris
m to personal accounts of party stalwarts and the president's men. Which was the reason for the populated IDP camps across the north!
Our criticism of Buhari is exactly the mindset we expected you to exhibit when you were busy singing praises of atrocious mismanagement of resources and disdain for honest critics of the government.
Jonathan failed because you and yours asked us to give him more time - even sharing his statements that 4-year tenure isn't enough to fix Nigeria - while things were falling apart. Jonathan failed because, even after squandering his goodwills and unable to meet our collective expectations, you allied and formed a sycophantic group paraded as "Transformation Ambassadors of Nigeria" to extend the sufferings and dying of the Nigerian.
It's easy for us to identify with Buhari based on shared religion and region, in your fashion. But how would such sentimental advocacy fix the problems of the average Nigerian from Aba down through Oyo to Zaria?
Don't you think it's easy for us to appeal to sentiments and be seen as conformists for "deferring to the elders" and thus be invited for appointment by a government headed by a fellow Muslim and northerner?
Perhaps because I've no marital responsibility yet, I've never found political appointment attractive, which is why I push for a functional country where you don't have to praise the government to earn a living.
Some people may think we are bitter because we aren't invited for an appointment yet, unknown that we are frequently approached for political engagements. And even yesterday, wallahi tallahi I got an offer of an appointment, and if this is untrue, may God never forgive me for making it up. In fact, friends like Jaafar Jaafar and
Abdulaziz Abdulaziz will even tell you of the "lucrative" that came in the early days of this government. Some appointments are simply to have you silenced, because your job description screams "no impact!"
We are all equal stakeholders in the building of this country, and we shouldn't allow any politician manage our affairs as though they were his or her private enterprise. Some day, we will have the resources and connections to head a relevant office, but until then we must be resilient and honest in keeping our serving leaders on their toes.

kayfra:
I'd like to confirm your information with a stress test. Let's really see how fundamentally sound the banks are. I have seen Nigerian banks declare profits to high heavens till they folded up or got bought out. Let's stress test the banks.

Flexherbal:
Our banks , now. It will soon get to schools.

solid3:
So, what's the way out?

735i:
A stress test will not be out of place....but what would be your variable? Oil prices? Naturally if the present price sustains till Q3 or Q4, it will be catastrophic. What if prices recover to $40, or $45...
Most O&G loans have been restructured such that once oil prices touch $40, the banks will be sitting quite comfortably.
Don't forget the cbn cut them some slack on charges. I see GTB redeeming its Eurobond at a premium...even as people complain about scarcity of dollars...
See...the banks are smart...they've been burnt before...and I daresay they'll be carefull not to get burnt again...

kayfra:
No.

Buhari is not devaluing the naira. I'd only get scared when our reserves starts running dangerously low and he is forced to devalue.

chubhiee:
If Nigerians truly understand what's about to hit them, they either escape from that country or take to the streets as revolutionaries.

The clock ticks.

kayfra:
Folks pray and pray hard coz our economy is about to get worse.

Our banks are seriously exposed to the oil and gas sector and are currently sitting on a heavy debt and bad loans that are dollar denominated. Most of our banking liabilities are in dollars. We already know of first banks issue with SeaWolf oil and Atlantic energy. TSA has taken easy government money off the table.

On the flip side, our banks have most assets denominated in naira and the only saving grace is the fake official exchange rate that pegs naira at an artificial value. If CBN devalues naira, to track with the market, i see bank balance sheets going into the toilet. Net liabilities will go high and not a lot of room to write off. AMCON is already in the red with so many debt write offs and it will take a very long time for inflation to catch up. We are headed for a tail spin crisis. Major Murphy's law.

Already, most banks are in distress and it's been a hush hush affair. But the impending devaluation will crash everything.

Am I missing anything?

This is not a PDP vs APC post. Just facts on ground.

kayfra:
CBN cut them the slack so they can recover from the reduction in interest rates. I really do hope the banks are as smart as you indicate here. I haven't seen massive layoffs which means they still haven't adjusted to current realities. Not that I am hoping for layoffs. God knows Nigerians have been dealing with major economic stress.

Let's stress test the banks based on current crude prices remaining under $35 a barrel for the better part of the year, 35-40% bad loan ratio and our reserves going down to $15 billion dollars. Those are feasible scenarios.

stonemasonn:
Alarmist

735i:
The reduction in interest rates is actually working in their favour because most if not all are yet to review their lending rates downwards. So their margins have increased. Layoffs too have started...albeit a bit subtle to avoid "noise".
But you'll be correct if you say they'll be stressed if oil hovers around at $35...
The big bet then is on the recovery of oil prices.