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No Nigerian bank is very sound — Imala Director of banking supervision at the Central Bank of Nigeria (CBN), Mr. Ignatus O. Imala, has said that no bank in the country can be described as very sound. In an address at the three-day seminar for finance correspondents and business editors in Bauchi, last week, Imala said that based on the “CAMEL” parameters used by the CBN, the best performing bank in the country could just be described as “sound”. He said that based on this judgement there were genuine fears that the performance of the banking sector could further deteriorate. The CBN director said that contingency planning framework introduced for banks in 2002 had also confirmed the deteriorating conditions of the banks in the country. He said that the framework showed that about 13.84 per cent of banks’ total deposits were under threat as at June, 2004 while about 14.95 per cent of their total assets were also under threat. Imala said that as at the end of September this year, 25 banks were exhibiting serious weakness which had manifested in forms of solvency, liquidity and poor assets quality. He said that these fears confirmed the need for the ongoing consolidation in the banking sector, whose main objective included the repositioning of the sector to enhance its soundness. The CBN director said that the other objectives of the reform programme was to move the economy forward as well as enhance the competitive edge of the Nigerian banks in the international market. He said that adequate capitalization was essential for the safe banking system since it would help them withstand market shocks among other benefits.   TO NEXT BUS PAGE...

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