Nigeria could face another systemic crisis in banking sector, says investment banking firm
The Nigerian banking sector could face another systemic crisis, according to the managing director of investment banking firm Afrinvest.The Nigerian banking sector could face another systemic crisis, according to the managing director of investment banking firm Afrinvest.
Ike Chioke told Vanguard newspaper that there is a growing pile of troubling power assets in the banking industry, and that the capacity of the CBN to pursue another bailout in the event of a banking crisis is doubtful.
"If there is a problem in the power sector and they are not able to service these loans, there is essentially going to be a problem in the banking sector. And if there is a problem, the balance sheet of CBN may not be able to accommodate another bailout," he said.
that there are indications that some banks are not making adequate provisions for bad and doubtful loans in their books as mandated by the Central Bank of Nigeria (CBN) in 2009 to avoid a repeat of the financial crisis.
Meanwhile, the Asset Management Corporation of Nigeria (AMCON) has said that it will no longer buy any bad debt from any bank.
According to official figures published by Business Day, it recorded a loss of N627 billion (€3 billion) for the 2013 financial year.