Burdened by the difficult operating environment typified by pressure on the naira, rising inflation and interest rate seemingly affecting financial inclusion, limited access to foreign currency as well as slow gross domestic product (GDP) growth, among others, Nigerian banks have yet another major obstacle to contend with in growing uncertainty and negative perception threatening their survival.
Specifically, the current moves by the Central Bank of Nigeria (CBN) ocassioned by the new capital requirements and sanitization of the industry which have recorded the first causality in the liquidation of Heritage bank may have polarized the industry, with those regarded as ‘capable of weathering the storms and those that may look for extra strength’ for survival
While the former are intensifying Investment in digital transformation and technology, improvement in risk management and asset quality improvement and innovative funding and capital raising strategies, among others, the later, are rather focusing on customer retention, consolidation and mergers, strategic partnerships and collaboration as well as cost optimization and efficiency measures to attract prospective investors.
Some analysts who spoke to metrobusinessnews.com say the industry and the foreign exchange market will remain unsettled for a
few more months and any
expectation of stability should
be much later in the year or possibly next year.
Indeed, some of the banks, particularly those under the management of the regulatory authorities as well as those whose plans were aborted by the new leadership of CBN on assumption, have started sending messages of hope and confidence to their embattled customers who troop in to their headquarters and various branches nationwide for clarifications and withdrawals, development that is worsening their situatios.
.
In one of the test messages, one of the banks wrote, “Be rest assured that your bank and deposits are safe, sound and secure as management and staff are working tirelessly to meet your expectations.”
Also, some of the banks have started experiencing resignations of both staff and Management, exposing further rhe weaknesses of rhe banks.
According to a management staff who resigned from one of the banks under the superintendent of CBN after expiration of two months notice, the action became necessary as things were begining to fall apart.
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Speaking in measured tone, he said “I have finally resigned from the bank after over 20 years. I gave them some months in lieu with my accumulated leave and they all expired last week. Having considered my career part and advancement and considering the peculiar situation of the bank and as well as the huddle of meeting the recapitalisation requirement, I came to the conclusion that the earlier I take voluntary resignation the better. I can confirm to you that some of these banks would need regulatory forebearances before they can survive,”
MBN investigations further reveal that some staff are still with their present employers because they feel, ‘outside is worse.’
“Some of us are still with our present employers because most of the banks believed to be doing well are not just recruiting but head hunting for some special skills in certain areas. So we are here not necessarily because there is hope of survival but, the fact that it is no better outside,” says a banker who pleased for anonymity.
Speaking further, he said, “The most annoying thing is that some elements of de-marketing, ocassioned by rat-race for recognition and high level packaging are creeping into the system gradually, and I can assure you that part of the demand to meet up with the competition will be the greatest undoing of some of the banks as much money might be expended in repackaging, at the expense of energy and resources to meeting the capital base requirement.”
Banks are considered as pivotal entities within the financial landscape, embodying significant economic prowess and serving as pillars of stability.
With a collective asset value nearing N150 trillion across 26 commercial banks, Nigeria’s financial sector has witnessed substantial growth, with formal financial inclusion reaching 64% by 2023.
The ever growing discerning customers, will, when considering whether to continue with a bank, would consider, among others, how big and reliable the bank is because that will determine the kind and quality of services provided and how easy these services could be accessed.