16 Nigerian Banks Among Top 1000 Global Banks

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16 Nigerian Banks Among Top 1000 Global Banks, Says Soludo

This Day
Ayodele Aminu
19 June 2007

The Governor, Central Bank of Nigeria (CBN), Prof. Chukwuma C. Soludo yesterday said 16 Nigerian banks are now in the league of top 1000 in the world while five of them are in the top 10 in Africa. This he said contrast with the situation four years ago when when none of them was in these top categories. He declared that Nigerian banks are now the soundest, and safest, having been described as the fastest growing in Africa by the Financial Times, in December 2006, he asserted. He also posited that global trends show Nigeria as one major promise in Africa.

Presenting a paper titled "Nigeria's Financial System Strategy 2020 Plan: "Our Dream," Soludo who took the gathering of eminent local and international financial experts through a well thought strategy towards achieving a modern and integrated financial system in Nigeria by the year 2020, said that if Africa must lay claim to the 21st Century; Nigeria must of necessity take the lead as one of the most populous and potentially the largest economy in the African continent.

Prof Soludo, quoting the Goldman Sachs report of 2001, which projected that after Brazil, Russia India and China, (BRICs), 11 countries (Nigeria and Egypt inclusive) have the potential to be among the largest economies in the world by the year 2025, maintained that Nigeria must grow her economy by annual average of 12.4 per cent.

This, according to him, informed the need to orchestrate a robust and vibrant financial system that will power the new economy and by extension propel the rest of the African economy to desired goal.

He gave insight into the Nigerian financial system characterized by systemic crisis arising from inadequate capital base and poor corporate governance. This development, he asserted, necessitated the banking industry consolidation, which has brought about the strengthening of the local banks streamlined from 89 banks to 25 relatively stronger banks.

Aside from the consolidation exercise, he identified other complementary reforms as adoption of risk-based and rule-based regulatory framework, zero tolerance in rendition of returns, new payment system and the adoption of new code of corporate governance, among others.

Also critical to the reform, he maintained, was the need or a more proactive monetary policy, which led to the establishment of a full-fledged department to ensure effective liquidity management, generation of daily CBN balance sheet and revamping of monetary targeting as framework for monetary policy.

The outcome of all these resulted in the emergence of 25 stronger banks, with over 7 banks, each expected to have more than US$1billion in Tier -1 capital by the end of 2007. Soludo also informed the audience that 11 Nigerian banks now have market capitalization ranging between $1billion and $5.3 billion; and would range from between US$ 2billion and $7billion by end 2007. Nigerian banks are beginning to finance big ticket projects unlike in the past when such could only happen with syndication of multiple banks, he said.

Prof. Soludo also touched on the enhanced external sector viability with the build-up of the external reserves standing at $44billion compared with $7.47 in 2003. Exchange rate convergence and stability has been achieved in the last one year with inflow of foreign private capital amounting to over $7 billion.

At the capital market, he further remarked that Nigeria is currently experiencing tremendous explosion with about 19 companies recording market capitalization of over $1 billion mark.

He also stated that the key elements of the FSS 2020 Vision were geared towards ensuring safest and fastest growing financial system among the emerging markets economies using an engineered approach. In this regard, the Lekki Financial Corridor (LFC) has chosen to locate the International Financial Centre to be funded through Public-Private Partnership. He also hinted that a Corporation will be established to implement the strategy and also take responsibility for marketing the LFC.

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