The Central Bank of Nigeria (CBN) has rated the Nigerian banking system very strong with bright outlook despite failure by some to pass the liquidity requirement used in its latest stress test conducted in the sector.
In its latest Financial System Stability 2018 report, the apex bank reported in the stress test conducted recently, seven of the 24 banks were not adequately funded in 2018.
According to the report, in less than 30-day period analysis, seven Nigerian banks were not adequately funded, while in the 31-90 day bucket, nine banks had funding gaps.
Commenting on the report and some media reports on the findings, the CBN Governor, Godwin Emefiele, who spoke at the just ended International Monetary Fund/World Bank meetings in Washington D.C, said that despite the failure of the seven banks to meet the minimum requirement on liquidity, the financial system remained stable.
He clarified: “On the strategic health of the Nigerian banking industry, first, I will reiterate that the strategic health of the Nigerian banking industry remains very strong.
“So the fact that you have read that seven banks failed stress test does not mean that those banks are weak, Emefiele stressed.
“If for instance Bank A fails in liquidity, we will try to work with that bank to make sure it address its liquidity, if they fail capital adequacy which is also part of the stress testing parameters that we use, we also counsel them about the best ways of o address the capital adequacy issue.
“So it has nothing to do with the weakness of any bank in the industry that will lead to any panic or system crisis in the banking industry” Emefiele assured.
The stress test is being conducted as part of the apex’s efforts to monitor the banking system with a view to minimising their risk exposure and the attendant implications for the financial system and the economy.
