Banking Sector Consolidation
BANKING SECTOR CONSOLIDATION IN NIGERIA AND THE STRATEGIES FOR GENERATING SUPERIOR RETURNS
NOVEMBER 2005.
ABSTRACT
Since the bank consolidation promotion policy of the Federal Government began in earnest last year, a number of reforms have taken place in the Nigerian Banking sector. The ability of the industry players to embrace recapitalisation and the success of quite a number of banks in meeting the deadline stipulated by the regulatory authorities has indeed strengthened the faith of Nigerians in the financial system
With banks now embracing consolidation as a means of recapitalisation as well as the successes that have been recorded in this direction within the past 15 months, there are positive indicators that the previously shallow Nigerian financial system is on the verge of radical deepening.
The paper set out to examine the emerging trends in bank consolidation within the Nigerian banking sector till date with the aim of outlining strategies that will ensure increased efficiency and greater social and capital returns to both Nigerian banks and the national economy in a post consolidation era. In doing this, it will highlight the various challenges being faced by banks in the consolidation process and list out tested options to ensure that Nigerian banks achieve greater returns in real terms while improving on service delivery and repositioning for greater efficiency.
1.0
INTRODUCTION
It is with keen interest that most Nigerians have monitored the developments that have unfolded within the banking industry over the past year.
Many critics of the consolidation policy of the Federal Government have been proven wrong. It is now apparent that the need for recapitalisation and consolidation was justified and the directive was well informed. The developments in the sector in the past months have opened channels for new prospects for the industry and placed it in prime position to be the driving force for the expansion of the Nigerian
NOVEMBER 2005.
ABSTRACT
Since the bank consolidation promotion policy of the Federal Government began in earnest last year, a number of reforms have taken place in the Nigerian Banking sector. The ability of the industry players to embrace recapitalisation and the success of quite a number of banks in meeting the deadline stipulated by the regulatory authorities has indeed strengthened the faith of Nigerians in the financial system
With banks now embracing consolidation as a means of recapitalisation as well as the successes that have been recorded in this direction within the past 15 months, there are positive indicators that the previously shallow Nigerian financial system is on the verge of radical deepening.
The paper set out to examine the emerging trends in bank consolidation within the Nigerian banking sector till date with the aim of outlining strategies that will ensure increased efficiency and greater social and capital returns to both Nigerian banks and the national economy in a post consolidation era. In doing this, it will highlight the various challenges being faced by banks in the consolidation process and list out tested options to ensure that Nigerian banks achieve greater returns in real terms while improving on service delivery and repositioning for greater efficiency.
1.0
INTRODUCTION
It is with keen interest that most Nigerians have monitored the developments that have unfolded within the banking industry over the past year.
Many critics of the consolidation policy of the Federal Government have been proven wrong. It is now apparent that the need for recapitalisation and consolidation was justified and the directive was well informed. The developments in the sector in the past months have opened channels for new prospects for the industry and placed it in prime position to be the driving force for the expansion of the Nigerian