Rescued banks to conclude mergers, acquisitions this year, says Sanusi

CENTRAL Bank of Nigeria (CBN) has affirmed that the on-going merger and acquisition of the rescued banks, which is part of the banking sector reform, would be concluded by the end of this year.

Besides, in a bid to ensure a healthy financial system, the apex bank, in collaboration with the Securities and Exchange Commission, are currently working out modalities to revive the Abuja Commodity Exchange and make it more viable to lend to the real sector.

Delivering a speech at the seventh yearly PEARL Awards and public lecture in Lagos, at the weekend, Sanusi, who explained that Nigeria, as a frontier market, has shown a remarkable economic growth with an average of 10.3 per cent from 2001 to 2009, however, noted that a lot needs to done to enable the country become one of the top 20 countries in the year 2020.

Sanusi, who was represented by the Deputy Governor, Financial System Strategy, CBN, Mr. Kingsley Moghalu, at the occasion, stressed the need for banks to streamline their operations and restrain from diversifying into non-bank financial businesses in order to enhance efficiency and reduce excessive risk in the system.

He explained that universal banking system was abolished due to high level of risks inherent in its management, adding that for it to operate successfully, a robust and sophisticated risk management system must be in place.

“To ensure a healthy financial system, tried and tested and not based on excessive risk system, we have to abolish the one-size fits all model banking, which is universal banking that allows banks to diversify into non-bank financial businesses and the risk inherent in the operations and they were mandated to apply for licenses to suit their operations.

“This includes the international, national, regional, monoline and specialised licenses such as Islamic banks with different capital requirements, commensurate to the depth of their activities.”

He added: “The regional banking is an important banking model, which we are trying to operate. It allows to be located in a small geographical area and add value to the country. Every body must not be a big bank. It is not about how big you are but how strong your balance sheet is.

Sanusi stressed the need to put strategies in place that would encourage more inflow of foreign direct investments into the country, noting that only a robust capital market can stimulate this growth.

To further strengthen the capital market to serve this purpose, Sanusi said the draft of the new corporate governance codes, which is based on internationally accepted standards, have been provided to the public and will soon be released.

He assured that the regulators would continue to adopt appropriate measures to ensure that the financial system is well equipped to stimulate economic growth.