How can nigerian banking industry ensure profitablility and liuidity in the on going merger syndrome and accui

Question

How can nigerian banking industry ensure profitablility and liuidity in the on going merger syndrome and accuisition

Answer 1

The discernible sub-sectors in the Nigerian financial services industry are banking, insurance, capital markets, investment management, real estate, and regulatory. Financial services companies are concentrated in Lagos and national companies dominate the various sub-sectors. Except for the banking industry, the majority of the operators in the financial services industry are small-sized companies. There is a dearth of long-term funds in the industry and the real estate sub-sector is relatively insignificant.
While the banks, capital markets and investment management companies seem to be well capitalised, the insurance industry is plagued by under-capitalisation. Competition is high across all sub-sectors but more so in the banking sub-sector. Entry barriers are high for banking, moderate for insurance and low for investment management and capital market activities.

The banking sector is currently undergoing major restructuring. In July 2004, the Governor of the Central Bank of Nigeria (CBN), Professor Charles C. Soludo announced banking sector reforms. The first phase of the reforms is designed to ensure a diversified, strong and reliable banking sector, which will ensure the safety of depositors money, play active developmental roles in the Nigerian Economy and become competent and competitive players both in the African and global financial systems, while the second phase will involve encouraging the emergence of regional and specialised banks.

Under the reforms, banks must now hold minimum financial reserves of 25bn naira ($190m; £110m), compared with 2bn naira previously with full compliance by the end of December 2005. The reforms have led to a series of mergers and takeovers as businesses tried to build up sufficient financial reserves to escape sanctions. As a result of the process the number of banks operating in Nigeria has shrunk from 89 to 25.

Industry consolidation is also envisaged in the insurance sector.

The restructuring is part of President Olusegun Obasanjo's efforts to clean up the financial services sector, in an effort to attract more foreign investment.

Use of technology is high in the banking sub-sector but low in the rest of the financial services industry. Within banking, the average number of years of service of staff in each institution is low due to the relatively high mobility of bankers. The banks achieve significantly greater profitability and growth than many other sectors of the Nigerian economy, and pay higher staff compensations.

The universal banking system currently operating in Nigeria enables most banks offer a wide range of services covering core banking areas such as lending, treasury, trade finance, private banking and financial advisory services. Some of the products and services include: asset based finance, structured trade finance, equipment leasing, finance leases, loan syndication, advances, bonds, guarantees, cash management, mutual funds, company flotation, capital reconstruction and restructuring, mergers and acquisitions, project finance, custodial services, and trust services among others.

The insurance sub-sector offers insurance cover for various types of risks. Most non-life businesses cover risks such as fire, burglary, marine, accident, engineering, workmen's compensation and loss of income; while most life businesses offer life assurance and increasingly pension administration and funds management services. The composite business is growing rapidly with significant number of insurance companies now underwriting both life and non-life risks.

The financial services industry is highly regulated by the following bodies: The Central Bank of Nigeria, Nigerian Deposit Insurance Corporation, National Insurance Commission, Securities & Exchange Commission, Corporate Affairs Commission and the Federal Ministry of Finance.

Answer 2

its about the Nigerien profit ratios in their banks ,the dollar keeps on hammering the Nigerian pound for sometime now, which causes this syndrome

Answer 3

nicely you need to circulate lower back to historic previous, whilst Nigeria broke independence in 1876 from Somalia, they declared themselves a unfastened democratic republic, yet quickly it grow to be the ecu colonist got here there in seek of diamonds and gold...and so it is going to handle your question