LegendHero:
The game is on. Let’s see how it goes.

That’s like $397m in today’s rate for that 500billi.

Which app is this abeg

Oyerinde16:
What it means is that.
1. Banks must have 500b untouched in reserve, they can only take it or cash it if they want to close or shut down the bank.
2. Banks will begin to look for ways and means to gather this money, either by savings, merging, borrowing and or using stringent or dubious methods to get the money.
3. Banks would need more marketing staffs to pay less but bring in more money into the bank.
4. Most banks would borrow to stand alone then spend years paying back the loan
5. Some banks would just merge to meet the target then consolidate and move on without owing.
6 you can add your own

I think the circular stated it must be Paid up share capital / share premium

Deposits won’t work in this instance

Thus is highly unrealistic!

Lungdick:


Which app is this abeg

Send App.

It’s from Flutterwave.

KingLennon:
Many workers will be retrenched and the suffering will increase. The banks will increase charges rate and the common man will still suffer it. Who dey advise BAT sef?









When stupid people are at the helm of affairs in the country, the people suffer

No bank will retrench. Most banks use contract staff systdm, which in essence is cheap labour. How cheaper can it be.

Nigeria is rapidly developing. The era of mass sack by banks is gone.

Even govt wont allow that to happen.

BRACE URSELVES FOR MASTER CARD LEVY AND ALL

KingLennon:
Many workers will be retrenched and the suffering will increase. The banks will increase charges rate and the common man will still suffer it. Who dey advise BAT sef?

When stupid people are at the helm of affairs in the country, the people suffer

Who are all these beer parlour economist for god sake 😂🤣😭

donleo92:
With all the noise gt fall hands.

but come to think of it, does this recapitalization not have a negative effect on the workers? like if this banks merger now, wouldn't some staff be layed off

Access bank swallowed diamond. Was there any mass layoff?

Oyerinde16:
What it means is that.
1. Banks must have 500b untouched in reserve, they can only take it or cash it if they want to close or shut down the bank.
2. Banks will begin to look for ways and means to gather this money, either by savings, merging, borrowing and or using stringent or dubious methods to get the money.
3. Banks would need more marketing staffs to pay less but bring in more money into the bank.
4. Most banks would borrow to stand alone then spend years paying back the loan
5. Some banks would just merge to meet the target then consolidate and move on without owing.
6 you can add your own

Just to add to what you've said

There's something called Tier 1 and Tier 2 capital for banks. Its used to caculate their capital adequacy ratio. Basically Tier 1 capital plus Tier 2 capital divided by their risk weighted assets( primarily the loans they have issued using customers deposits)gives you their capital adequacy ratio

Recapitalisation of banks has to do mainly with their "Tier 1 capital which covers shareholders equity(retained earnings, paid in capital etc) on their balanced sheet.

While Tier 2 capital is subordinated capital e.g debts and bonds they raised.

The most likely way out for banks is to issue new shares or merge

43Ronin:
Honestly this CBN governor is just very daft! Where will commercial banks get the funds from? Even if they issue IPO how many nigerians can purchase and for what exactly? Why would any nigerian wan to tie their funds as shares?Does this fool even realise that the eventual mergers will lead to lay-offs? Thereby increasing the unemployment situation in a country where farming is basically a deadly job? Gosh! Why can't he instead issue federal govt bonds at massive interest rate like 15% so that he can mop up excess liquidity in the economy thereby dropping inflation? Then govt invest the funds into capital projects?

Where are all these lazy and Illiterate economist coming out from 😭😭

43Ronin:
Honestly this CBN governor is just very daft! Where will commercial banks get the funds from? Even if they issue IPO how many nigerians can purchase and for what exactly? Why would any nigerian wan to tie their funds as shares?Does this fool even realise that the eventual mergers will lead to lay-offs? Thereby increasing the unemployment situation in a country where farming is basically a deadly job? Gosh! Why can't he instead issue federal govt bonds at massive interest rate like 15% so that he can mop up excess liquidity in the economy thereby dropping inflation? Then govt invest the funds into capital projects?

Why would you call someone's father, even old enough to birth you daft?

If he is daft indeed, he wouldn't be where he is today presiding over the economy of Nigeria and you have no say.

References1:


#CableIndex

Previous Thread
https://www.nairaland.com/8045096/cbn-pegs-minimum-capital-base#129158987

Union Bank doesn't have international presence hence, she doesn't fall within the N500b bracket.

naija4life247:


Next time, call him Professor Charles Chukwuma Soludo the Solution.

While the world was crying of recession in the late 2000s, hunger and starvation all over the world. Many rendered homeless in USA and Europe. But, we Nigerians were doing Owambe Parties from Monday to Sunday. Musicians were playing all days and night because Soludo the Solution managed the Fiscal and Monetary policy implementation so well. He sat with many banks Board of Directors and helped them negotiate balanced mergers and acquisitions. I know because I was in the industry then.

The world bank, IMF, European Economic Bank and others had to put their chairs and tables under mango tree and listen to the Professor Emeritus to teach them Micro and Macro Economics.

This is why I am very angry whenever someone says the useless Musa Umar Yar'Adua wey Ogun kill was a good man. That is the idiot that removed a Professor of Macro Economics as CBN Governor after his first 5-year tenure and replaced him with the pedophille Sanusi LamidoSanusi who has a Masters degree in Islamic Studies from a university in Sudan and Yar'Adua made such an idiot the CBN Governor.

The pedophille Sanusi Lamido Sanusi illegally took over 10 Southern Banks by colluding with some Southern crooks like the once that Ogun just killed in a plane crash in USA while going to have sex party with his family. And Goatluck Jonathan watched until Sanusi ruined 10 Southern banks.

The CBN Governor CAN NEVER manage the monetary and the fiscal policy together.

Please go and find out what is fiscal policy.

Do not argue further.

At what point did Soludo say with Banks board of directors before coming up with the policy.

Do not bamboozle us further.

As we speak, how many Nigerian banks has up to the N500Bn has that much? We need to know which banks are safe and those on the verge of failing.

Check the valuation well. It's true that Opay has a higher valuation than Zenith Bank.

Take it or leave it, it's a two (2) year myth that has stunned the industry.

Opay is an international country with major presence in Nigeria. As such it's business cuts across a global space. The valuation captures it's total Global Assets.

Trojan8:


Valuation is different from shareholders fund. Plus most Fintech coys have stupid valuation that defies logic. Explain to me why Access bank with a valuation of 821bn is lower than Opay. What structures that does Opay have to justify such valuation?

Dobodobo04:



Daft?? Wrong choice of word!!

CBN probably using it to mop off Naira off the system.

I say daft because he knows the excess money not in the banking system is in the hands of politicians, friends & cronies they printed the money for not the average working class. The previous recapitalization was to sanitize the banking industry that had several banks failing and loosing clients deposits. Funds were raised in the previous recapitalization through IPO(shares) & everyday nigerians bought those share which eventually turned out profitable because zenith, UBA/STB, Diamond, ICB, GTB & Access emerged stronger. The idiot is only recapitilizing so that CBN can have cheap funds to play with and mismanage at the detrement of unemployment. Do you even understand the multiplier effect of this policy, many bankers will japa and take away our funds to other European, Canadian & American economies, thus reducing our GDP. This Is a very wrong move. Also what about micro-finance banks and BDCs they don't need recapitalization too?

Massive lay off of bank staff coming soon.

500Billion is too much... Why not 250B or 300B Max... Na wa o.. job lay offs loading..

Oyerinde16:
What it means is that.
1. Banks must have 500b untouched in reserve, they can only take it or cash it if they want to close or shut down the bank.
2. Banks will begin to look for ways and means to gather this money, either by savings, merging, borrowing and or using stringent or dubious methods to get the money.
3. Banks would need more marketing staffs to pay less but bring in more money into the bank.
4. Most banks would borrow to stand alone then spend years paying back the loan
5. Some banks would just merge to meet the target then consolidate and move on without owing.
6 you can add your own

@2.so, banks will start saving,. borrowing and adopt.other.dubious methods to increase their capital bases?

Please go and educate yourself on what a bank capital base is.

@3 Is the employment of more marketing staff the method adopted when Soludo did the same thing?
Where do you people always get this beer parlour logics?
@4, most banks will borrow from where?
Perhaps,.the will borrow from NANS and NLC

Please go and do a bit of research on what the CBN Governor said and has requested the banks to do


And be less bold about spewing heresy.

KingLennon:
Many workers will be retrenched and the suffering will increase. The banks will increase charges rate and the common man will still suffer it. Who dey advise BAT sef?











When stupid people are at the helm of affairs in the country, the people suffer

What is the relationship between banks retrenching their staff and increasing charges?

I should have known you know next to nothing when you said " charges rate".

Angelfrost:


Well, mergers will be inevitable... The smaller banks will have no choice but to succumb to being absorbed into bigger ones.

Of course, in that event, some of the lower staff members of those small banks will have to be axed.

I understand they all have to recapitalise over a period of two years. That is a long enough time. They just have to cut cost, maximize their PATs and retain much of the earnings over two trading periods and they are done. They may not necessarily resort to M&A.
Yes retrenchment may come in, the only drawback I see here, and maybe reduced dividends payouts.

Svoboda:


Access bank swallowed diamond. Was there any mass layoff?

Yes there were. Access bank did it silently and methodically

All the dollars those bank chairmen hide in their homes would be brought out by fire by force now else you share your dominion with strangers

So you are so smart .... right ...

Trojan8:


What relationship does increasing capital base have with reducing costs?

The way some of you jump on issues that you have zero understanding of ehn.

KingLennon:
Many workers will be retrenched and the suffering will increase. The banks will increase charges rate and the common man will still suffer it. Who dey advise BAT sef?









When stupid people are at the helm of affairs in the country, the people suffer

CBN control the charges except banks deduct from customers account

donleo92:
With all the noise gt fall hands.

but come to think of it, does this recapitalization not have a negative effect on the workers? like if this banks merger now, wouldn't some staff be layed off

You shud have asked questions if u don't understand something before saying GTBank fall ur hand

The last Banking re-capitalisation programme done during the Obasanjo regime between 2005-2007, was one of the biggest achievements of the Obj era and it birthed Prof. Soludo into Global recognition.

For the records, Cardoso has modified his template by giving Banks a two (2) year window to recapitalise but strategies on how the Banks intend to raise capital should be articulated to CBN by April End, 2024.

The influx of Foreign Direct Investments (FDI) during the Obj era was majorly from Institutional and Portfolio investors into the Banking system during the Soludo era.

Tons of Jobs were created especially for fresh young graduates, retail branches were opened more to cover the unbanked, Nigerians who studied abroad came back home to fill vacancies for well paying Mid-level and Senior Banking roles.

The GUFAZ (GTB, UBA, First Bank, Access & Zenith) tier 1 Banks were properly rooted after the Soludo Banking Consolidation programme. Giving birth to Banking Wiz-kids like Jim Ovia, Bisi Onasanya, Tony Elumelu, Fola Adeola, Aig-Imokuede, Late Herbert Wigwe and the list is endless.

Depending on the medium of raising capital, Shareholding also became democratic as common men could afford shares and stock of Banks.

It's a commendable move by Cardoso and its projection to make the Nigerian Economy a $1 trillion economy would be feasible.

43Ronin:
Honestly this CBN governor is just very clueless! Where will commercial banks get the funds from? Even if they issue IPO how many nigerians can purchase and for what exactly? Why would any nigerian wan to tie their funds as shares?Does this fool even realise that the eventual mergers will lead to lay-offs? Thereby increasing the unemployment situation in a country where farming is basically a deadly job? Gosh! Why can't he instead issue federal govt bonds at massive interest rate like 15% so that he can mop up excess liquidity in the economy thereby dropping inflation? Then govt invest the funds into capital projects?

CBN Governor is clueless?
Wonderful!

Even if he issues IPO, how many Nigerians can purchase and for what?
Stupid question from someone calling another clueless.
Many Nigerians will buy for themselves and even for their children because they know what shareholding means.
Do not speak for all Nigerians based on your own personal economic situation or handicap.

Why would any Nigerian want to tie up their money in shares?
Another stupid question from someone uncultured enough to label man presumably old enough to be his father a fool.

Shareholding for you is tieing down capital? What happens to capital appreciation over time?

Why can he issue FG bonds instead?
We are talking about bank recapitalisation and Mr. Wise man is talking about issuance of bonds. Pathetic!
Is is the issued bonds that will recapitalize the banks?

If I have to address the issue of the bond issuance, I may have to educate you.

You are too crude for that education.

Endeavor to be too quick to advertise your ignorance. Though I recognize the fact that Nairaland seems to be the meeting point for the ignorant once like you.

Blazetrailer:
Two illiterates.....blind correcting blind....you cant use bank capitalisation to mop up excess liquidity...it is not a monetary policy tool for managing inflation.

You dey mind dem? Dey are all putting their nincompoop mouths for what dey have no knowledge about.

Foolish comments and foolish suggestions everywhere, who ask them?

43Ronin:

Yes there were. Access bank did it silently and methodically

Because you work in Access Bank HR right You sat on the board to lay off staff right?

Dialpad:
Will this not lead to layoffs and closure of branches etc

I see them using less human to significantly reduce costs

So unrelated.

Lanruze:
Check the valuation well. It's true that Opay has a higher valuation than Zenith Bank.

Take it or leave it, it's a two (2) year myth that has stunned the industry.

Opay is an international country with major presence in Nigeria. As such it's business cuts across a global space. The valuation captures it's total Global Assets.

Valuation is an excel work that was done by an analyst especially for an unquoted company. If I take the valuation you gave, then Opay is the biggest company in Nigeria and that's a big joke.

Talking about global assets like if I ask you to mention them, you would. In reality, most of the FUGAZ have branches that extends globally. So tell me, how's Opay more valuable? Access is about to buy one of the biggest banks in Kenya. Yet according to you, Opay with almost zero physical presence is Nigeria or Africa is like 10x bigger. Please na.