Fear not, Depositors appealed to by CBN , assures Nigerian banks are stable

The Central Bank of Nigeria (CBN) has disclosed that the stress tests revealed that the banks have adequate capital to absorb unex­pected losses.

A statement from CBN at the weekend disclosed that unaudited results of banks, and the results re­leased so far, indicated that economic headwinds had not significantly af­fected returns.
The apex bank stated that the banks have been directed to have effective risk management system in place especially price hedging, adding that the CBN would continue to monitor them to ensure sufficient internal reten­tion of capital to serve as buffers.
This statement became necessary following its recent top-down stress tests of Deposit Money Banks (DMBs) in the country.
Recall that, last week, the International Mon­etary Fund (IMF), dis­closing the outcome of the IMF Executive Board 2014 Article IV Consul­tation with Nigeria, com­mended the efforts of CBN in ensuring financial system soundness.
Its statement, made available to newsmen, said its “directors noted that financial soundness indicators remain above prudential norms, but the concentration of credit risks and foreign currency exposures call for contin­ued close oversight. They welcomed progress in strengthening supervision and regulation, including of cross border activities, and encouraged additional initiatives to foster finan­cial market development, including of hedging in­struments, and improve financial inclusion.”
The Directors also com­mended the unification of DAS and the interbank foreign exchange market rates, noting that greater exchange rate flexibility could help cushion exter­nal shocks.
IMF noted that Nigeria’s economic data are broadly adequate for surveillance, just as it agreed that tight­ening fiscal policy and al­lowing the exchange rate to depreciate, while using some of the reserve buf­fer were appropriate re­sponses to the recent fall in global oil prices.