Daily Independent Online.
*
Wednesday, July 21, 2004.
N25 billion capital base: Three banks eye
merger
•Stanbic, Citibank, Standard Chartered await UK
By Ntai Bagshaw
Development Reporter, Grahamstown, South Africa
The new Central Bank of Nigeria (CBN) directive that
increased the capital base of banks from N1 billion to N25 billion is not
likely to be adhered to within the specified 18 months period.
Speaking to journalists in Grahamstown, South
Africa, Deputy Chief Executive of Stanbic Bank Africa, Mr. Greg Brackenridge,
said the CBN’s insistence on the time-frame for the policy might fuel
instability in the financial sector. He said it was likely that Stanbic would
merge with Standard Chartered Bank and Citibank (now Nigerian International
Bank) in order to meet the new requirement.
“The underlying philosophy of this particular
policy thrust is laudable. I mean, I don’t have any quarrel with
that,” Brackenridge said. “The only issue that I think the industry
will disagree with the governor (of the Central Bank) is the pace at which he
is seeking to do so.
“His bid to increase the minimum capital
requirements for banks by 20 fold in 18 months is akin to actually promoting
systemic instability in the industry because clearly, that is not going to be
possible by that time.”
Brackenridge said only six banks, currently operating
in the country, had the capacity to meet the target. The decision for
Stanbic’s merger, he noted, will be taken at the group’s London
head office.
“From the 92 banks or so operating in the
country, I think only six banks will be able to comply excluding ourselves
(Stanbic), Standard Chartered and Citibank, where clearly we can comply -
but it’s the choice of the head office in London,” he said.
The Stanbic chief hailed Nigeria’s new economic
reform programme, stressing that focus is shifting away from macroeconomic
reforms towards the much-needed infrastructural development. He acknowledged
the nation’s crude oil output but said its large informal economy needed
to be tapped.
Still on the economy, Brackenridge lamented the
persistent political instability, “with political assassinations
on-going,” adding that corruption remains endemic.
Stanbic Bank Africa operates in 16 African nations,
including Nigeria, where it has one of the group’s largest portfolios.
