The Central Bank of Nigeria (CBN) thursday described as false, a report by an online news website that a recent stress test it conducted on Nigerian banks showed that nine commercial banks demonstrated some level of distress that required that they recapitalise.
The Director, Banking Supervision, CBN, Mrs. Tokunbo Martins, who spoke in a telephone chat with THISDAY, maintained that all banks operating in the country were healthy.
The news site had listed the affected banks to include the United Bank for Africa (UBA), First Bank of Nigeria Limited, Diamond Bank, Sterling Bank, Skye Bank, Heritage Bank, Wema Bank, Unity Bank and Fidelity Bank.
The online newspapers quoted a CBN source to have also said the regulator did not wish to create a panic in the banking sector, adding that the capitalisation order to the affected banks was to avoid the recurrence of the 2010 banking crisis that saw Nigeria giving banks a huge bailout.
It also stated that the Treasury Single Account (TSA) also led to further stress in the banking sector, alleging that the bank merely served as purveyors of stolen government funds or illegally obtained fund deposits that were diverted from government accounts.
But reacting to the report, Martins said: “That report is not true, I don’t know where the online publication got the report. All Nigerian banks are sound, we stress test the banks regularly. A stress test is not even the reflection of reality. But our stress test has not revealed anything that shows that the banks are in danger.”
Also, the Director, Communication at the CBN, Mr. Ibrahim Muazu, in a statement on the matter, described the report as fictitious, stating that no Nigerian bank was “experiencing disstress.”
“The story as published is not only false and baseless but a figment of the writer’s imaginations. The CBN hereby assures the banking public that the Nigerian banking system is sound and all banks are in compliance with both the regulatory and prudential requirements. The Governor, on November 24, 2015, during the Monetary Policy Committee (MPC) press briefing, also made it categorically clear that no Nigerian bank is in distress.
“The CBN therefore urges all bank customers and the general public to disregard the publication as it is false, mischievous and aimed at throwing the banking public into unnecessary panic,” he added.
CBN Governor, Mr. Godwin Ifeanyi Emefiele, last Tuesday explained that the speculation that some banks had low capital adequacy was false.
“Let me use this opportunity to confirm that there is no bank that has capital adequacy problem today and all the news around that is false. The central bank has its own internal mechanism with which it conducts daily stress-testing of the operations and activities of banks.
“ We stress-test their balance sheet and profit and loss accounts on a regular basis using different scenarios. That is what we do as a responsible central bank that monitors the strategic health of the banks. We carry this exercise out as a practice and I hope this puts this matter to rest. There is no bank that has a capital adequacy problem, we carry out our work and hold informal discussions with the banks,” he said.
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