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The Status of Nigerian Banks |
 After wowing the world with their recapitalization exercise, Nigerian banks slipped into bad banking practices and a stock market bubble quickly followed. In the Nigerian banking community, and even at the Central Bank of Nigeria (CBN), there should certainly be some embarrassment now. Fortunately, a growing number of banks are beginning to equate more transparency with better returns. Nigerian banks have had a rough ride. The Nigerian Stock Exchange (NSE) has lost over 65% of its value since March 2008 and an estimated N8trn ($54bn) has been wiped off bank stocks, which represent two-thirds of total market capitalisation. The CBN believes that the sector could face up to N1trn of bad loans and has talked of setting up an asset management company onto which banks can offload their toxic assets. Download Full Report |
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Initiatives for Safe and Sound Banks: Lessons from the Recession |
 The cumulative effect of these was a confidence crisis that hinged on an unclear status of the health of the Nigerian banks. These fears were palpable as (a) the central bank had to overly expand liquidity conditions in order to salvage a systemic crisis. (b) some banks actually defaulted in meeting customer obligations at some point. One bank in particular was reported to be unable to meet depositor obligation for a period of three days. (c) retrenchment of good number of members of staff, salary cuts etc became widespread (d) de-marketing campaigns by other banks heightened. Download
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Bank Insolvency: Bad Luck, Bad Policy, or Bad Banking? |
 Since the late 1970s bank insolvencies have become increasingly common. Where these failures are systemic, they can drain a country's financial, institutional, and policy resources—resulting in large losses, misallocated resources, and slower growth. Using a new database covering some eighty-six episodes of insolvency, this article examines the causes and effects of these crises and how governments have responded. It finds that both macroeconomic and microeconomic factors have figured in bank crises and that, based on the criteria developed here, few governments have responded well to these episodes. To better manage insolvencies, policymakers must develop a regulatory framework that allows banks to respond more robustly to shocks and ensures proper management and oversight. That bankers have not regularly planned for shocks suggests that they have not had the incentive to do so. Download
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The Performances of Commercial Banks in Post-Consolidation Period in Nigeria |
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 An examination of the performances of government induced banks consolidation and macro-economic performance in Nigeria in a post-consolidation period using published audited accounts of twenty(20) out of twenty-five(25) banks that emerged from the consolidation exercise and data from the Central Banks of Nigeria(CBN) revealed the following: The consolidation programme has not improved the overall performances of banks significantly and also has contributed marginally to the growth of the real sector for sustainable development. The…banking sector is becoming competitive and market forces are creating an atmosphere where many banks simply cannot afford to have weak balance sheets and inadequate corporate governance. Download
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Capital Market Imperfections and Corporate Investment Behavior in Nigeria |
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 This work investigated the impact of capital market imperfections on corporate investment behaviour using panel data for Nigerian manufacturing firms from 1984-2000. Both static and dynamic misspecification problems were dealt with by using an endogenous switching regression model. The authors found out that financial factors have a significant effect on the investment behaviour of Nigerian firms, but the extent and impact of financing constraints are not uniformly distributed. Variables that capture firms’ credit worthiness, asymmetric information, agency problems and size increased the probability of a firm being in the high premium regime. The likelihood of being in either a low or high regime varies over the business cycle in line with general macroeconomic conditions. Download
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Last Updated on Friday, 03 July 2009 12:29 |
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