Author Topic: FIRST YEAR ANNIVERSARY: BANKING SECTOR GROWTH REMAINS STRONG ? EXPERTS  (Read 1526 times)

Offline furtune

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The banking sector has continued to grow in leaps and bounds since the conclusion of its restructuring in December 2005, experts have said.

According to them, even though other sectors of the economy appeared to have remained stagnant since the advent of the current administration, the huge funds now at the disposal of the products of consolidation, have made it possible for them to participate in big-ticket transactions and also explore other economies for improved profitability.

Asset base of the banks grew by approximately 277 per cent between 2003 and 2007, according to the Central Bank of Nigeria.

The Governor of the CBN, Prof. Chukwuma Soludo, in his recent paper, ?The unfinished revolution in the banking system?, said there were 11 banks with over $1bn in Tier 1 Capital by end, February 2008.

Financing at the micro level, has also received a remarkable boost, with more banks to join the already licensed 716 microfinance banks.

The CBN also stated that the share of banks in the Nigerian Stock Exchange rose from 30 per cent of the 20 capitalised stocks in 2003 to 65 per cent in 2007.

The Head Researcher, Price Analysts, an economic research firm based in Lagos, Dr. Nkiru Johnson, said that the sustained success of the banking sector could be linked with the watchfulness of the regulatory bodies ? the CBN and the Nigeria Deposit Insurance Corporation ? adding that it had nothing to do with policies of the current administration.

She, however, said that the growth recorded by the banking sector would only impact on the economy if efforts were geared towards lifting the real sector out of the rubble. This, she said, could be done by implementing funding policies to the letter.

?Right now, the only visible growth in Nigeria is in the financial services sector and that alone cannot drive the economy. Growth has to be all-encompassing to make a meaningful impact on the country,? she said.

The Bankers? Committee, at the end of its bi-monthly meeting in Lagos, said that the country?s economy had remained strong, despite fears that the economy had stagnated in the past one year.

The Managing Director, Bank PHB, Mr. Francis Atuche, however, noted that there had been a bit of pressure on the volume of money supply, adding that the banking sector provided 96 per cent additional credit to the real economy in 2007.

But the Group Managing Director, UAC of Nigeria Plc, Mr. Larry Ettah, said that Nigeria?s economic growth should be an inclusive one.

He said a situation where the economy was witnessing growth in financial indices alone could be dangerous, particularly when attention was shifting away from production to holding idle capital.

According to Ettah, banks must have the capacity to deploy capital raised and also earn good returns.

?I don?t want to talk-up the market, neither do I want to talk it down. But I do think that it is important that we recognise that although there has been huge level of activities in our financial services industry, there is a dearth in terms of management capacity. And quality decisions need to be taken as regards this,? he noted.

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