Improving economy positive for banking sector

The economy which is beginning to recover from recession occasioned by drop in oil prices and foreign exchange shortage is seen to impact positively on the banking sector.

There has been a record of improvement on the oil prices and production capacity. For instance, Brent oil traded at $53.86 per barrel as at Monday May 22, 2017 afternoon, extending gains as Saudi Arabia said all producers participating in output cuts have agreed on prolonging the deal till the end of the first quarter of next year.

Also the naira/dollar exchange rate has recorded some improvement, with the local currency presently trading at the rate of between N378 and N380 to the dollar from N520/$ sold in January and early February. This follows the intervention of the Central Bank of Nigeria (CBN) by way of increased dollar supply in the foreign exchange market as well as the creation of various forex windows to ease pressure on access to foreign exchange and to close the huge gap between the official and Bureau De Change (BDC) segment of the market.   

“I believe the economy is recovering fast from recession that it found its self in the last two years. The global oil market is recording some improvement and some other sectors of the economy are growing and making some new wave. All these put together, we expect some modest improvement in the overall economy and when this happens it will be positive on the banking industry”, Segun Ajibola, president/chairman of council, Chartered Institute of Bankers of Nigeria (CIBN) said.

Speaking with journalists in Lagos at the end of the annual general meeting of the Institute, Ajibola said, “as at today, there are a lot of challenges in the banking industry in the area of performance of borrowers in particular honouring their obligations as at when due and in other key performance indicators but as the economy improves, we expect that to rub positive on the Nigerian banking and financial institutions generally”.

Looking at the performance of the Institute in 2016, Ajibola said “the 2016 is an improvement over the previous year, but we do know that the economy was challenged in 2016. There were a lot of global developments that created disequilibrium in the economy but through some new initiatives, the doggedness of the leadership of the institute, and our courage into new areas and the activities of the institute, we were able to record some special improvement in all aspect of the institute life”.

Seye Awojobi, Registrar/CEO of the Institute said the year 2016 was both challenging and rewarding, adding that the Institute weathered the storm with remarkable achievements.

During the year under review, he said the membership of the Institute grew slightly from 118,802 in 2015 to 122,680 in 2016 representing an increase of 3.26 percent.

HOPE MOSES-ASHIKE