‘ Banks' recapitalisation will birth new sectors, opportunities’

THE new recapitalisation of banks will lead to the emergence of new sectors and opportunities as Nigeria’s financial institutions explore means of meeting the new operational figures, a research and rating agency, Agusto & Co. has said.

In its ‘ The CBN reviews capital requirement for banks: Our perspective’ issued, yesterday, the rating agency noted that while the exercise was crucial to strengthen the banking industry, support the rejuvenation of the economy and attract foreign currency inflow, adequate measures must be instituted to ensure that the exercise was not used as an avenue for laundering illicit funds.

It added: “We believe new sectors will be created while some existing industries will be expanded as the banks seek to generate returns for the enlarged capital base.” It also charged the Central Bank of Nigeria to put in place strategies to prevent money laundering through banks’ consolidation process.

“The CBN must also ensure that each bank has the adequate governance structure and risk management framework to support the new financial institution,” it added.

Overall, the rating agency anticipated an inflow of circa 4 trillion to meet the new capital regulation, noting that significant pressure could be mounted on the CBN to use the total shareholders’ funds for the computation of regulatory capital or at least to include retained earnings.

To the agency, should the retained earnings be used for the computation, a reduction in the capital inflow to circa 1.5 trillion could happen.