Banking consolidation: Mega banks boast N10tn capital base, others seek fresh investors

As the Central Bank of Nigeria’s proposal to initiate a new banking sector consolidation raises concerns among some industry operators, findings by The PUNCH indicate that major banks with foreign subsidiaries currently control N9.6 trillion capital base.

This is just data compiled by the papers showing that five key banks currently have capital above N1 trillion each.

An analysis of the current capital base data of leading commercial banks in Nigeria revealed that the proposed consolidation, which is yet to be fully conceptualized by the apex bank, will most likely affect national, regional and merchant banks.

A number of the national, regional and merchant banks have not grown their capital base over the years in the manner their counterparts with foreign subsidiaries have grown theirs.

The CBN Governor, Olayemi Cardoso, had on Friday in his keynote address at the Bankers’ Dinner said the apex bank would be asking banks to raise their capital base.

He premised the need to increase the bank’s capital base on servicing the $1tn economy projected by President Bola Tinubu as well as the effect of currency devaluation on bank operations.

He said, “In my recent speech at the 370th Bankers’ Committee meeting, I highlighted the economic agenda of President Bola Ahmed Tinubu’s administration. The administration, as outlined in the widely circulated Policy Advisory Council report on the national economy earlier this year, has set an ambitious goal of achieving a Gross Domestic Product (GDP) of $1tn over the next seven years, with clearly defined priority areas and strategies. Attaining this substantial target necessitates sustainable and inclusive economic growth at a significantly higher pace than current levels. The administration has already commenced this journey through fiscal reforms, including the removal of petrol subsidies and the unification of the foreign exchange market rate.