CBN: Nigerian banks are safe

The CBN says Nigerian banks are safe, following the outcome of a stress test it conducted.

Ibrahim Mu’azu, the director of corporate communications, said in a statement on Sunday: “Following the recent top-down stress tests of Deposit Money Banks carried out; the CBN re-affirms that the banks have adequate capital to absorb unexpected losses.”

It noted that unaudited results of banks and the results released so far indicated that the economic meltdown had not significantly affected returns.

Banks had been directed to have effective risk management system in place, especially price hedging, he said.

The apex bank would continue to monitor banks to ensure sufficient internal retention of capital to serve as buffers.

Mu’azu recalled that the IMF in a report on March 4 on the outcome of the executive board 2014 consultation with Nigeria commended the CBN in ensuring financial system soundness.

Financial soundness indicators remained above prudential norms but that the concentration of credit risks and foreign currency exposures called for continued close oversight, he said, adding that  the CBN welcomes the progress in strengthening supervision and regulation, including cross-border activities.

CBN encouraged additional initiatives to foster financial market development, including hedging instruments and improved financial inclusion.

The statement noted that Nigeria’s economic data were broadly adequate for surveillance, and that the CBN agreed on tightening fiscal policy and allowing the exchange rate to depreciate.