The Central Bank of Nigeria (CBN), has said that the Nigerian banks have very strong capital buffers to weather the country’s economic crisis.
Director of Banking Supervision, CBN, Tokunbo Martins, said this at a press conference after a meeting with the heads of the country’s banks. He also assured that supply of foreign exchange for manufacturers will be improved.
Nigeria, which has Africa’s biggest economy, is in recession as a slump in vital oil revenues has hammered public finances and the currency, driving up the prices of imported goods.
The clarification became necessary after a report by a Dubai-based international investment bank, Arqaam Capital, indicated that seven Nigerian banks are undercapitalised to the tune of N1tn ($3.2bn). It also reported that two other banks were close to being insolvent.
The investment bank said the Nigeria’s banking industry “is experiencing a full-blown financial crisis” as failed fiscal and monetary policies had led to a credit crunch.
The stress test identified the undercapitalised banks as First Bank of Nigeria, Unity Bank Plc, Diamond Bank Plc, Skye Bank Plc, FCMB Group Plc, Sterling Bank Plc and Fidelity Bank Plc