The rise in non-performing loans and imminent fall in naira value have put banks in a precarious position and needing to raise fresh capital in a distressed economy.
Palpable fear has gripped the chief executives of many large-tier and mid-tier Deposit Money Banks as an imminent fall in the naira exchange rate throws up a need for additional capital raising.
Checks by our correspondent show that the Capital Adequacy Ratio of a number of the country’s mid-tier and weak large-tier banks is currently at the threshold stipulated by the Central Bank of Nigeria. As at today $1 equals N500 in the parallel market.
The Chief Executive Officer, Financial Derivatives Company Limited, Mr. Bismarck Rewane, in the firm’s economic outlook for 2017 released recently, predicted that the naira would trade at 350 to the dollar at the official market and depreciate to 520 to the greenback at the parallel market.
Source: The Punch