Banking In Nigeria
   HOME

TheInfoList



Click Here for Items Related To - Banking In Nigeria
OR:
Banking In Nigeria on:   [Wikipedia]   [Google]   [Amazon]

The banking industry in Nigeria started during the colonial era with the establishment of Colonial Banks, with the primary aim of meeting the commercial needs of the Colonial Government. The banking system in Nigeria is regulated through the
Central Bank of Nigeria The Central Bank of Nigeria (CBN) is the central bank and apex monetary authority of Nigeria established by the CBN Act of 1958 and commenced operations on 1 July 1959. The major regulatory objectives of the bank as stated in the CBN Act are ...
. This apex bank started operation on July 1, 1959.


Background

In 1892, the
African Banking Corporation The African Banking Corporation was a British overseas bank; its headquarters were in London but all its branches were overseas. Unusually, it was a consortium bank (i.e., other banks jointly owned it), rather than being owned by individuals. It op ...
and the
Bank of British West Africa Bank of British West Africa (BBWA) was a British Overseas bank that was important in introducing modern banking into the countries that emerged from the UK's West African colonies. In 1957 it changed its name to Bank of West Africa, and in 1965 wa ...
, now
First Bank of Nigeria First Bank of Nigeria Limited is a Nigerian multinational bank and financial services company in Lagos, Nigeria. It is the premier bank in West Africa. The First Bank of Nigeria Limited operates as a parent company, with the subsidiaries 'FBN B ...
, were established in Nigeria. In 1925, Due to some difficulties the bank folded up its activities and the Bank of British West Africa Limited (BBWA) was established to take over the activities of African Banking corporation. The Bank of British West Africa Limited opened its first branch in Lagos in 1894, in the later part of the same year ,the name of the bank was change to Standard Bank of Nigeria known as the First Bank of Nigeria limited ow_a_public_limited_company_PLC._the_Anglo-Egyptian_Bank_and_
ow_a_public_limited_company_PLC._the_Anglo-Egyptian_Bank_and_First_National_Bank_(South_Africa)">National_Bank_of_South_Africa_ First_National_Bank_(FNB;__af,_Eerste_Nasionale_Bank_(ENB))_is_one_of_South_Africa's_"_big_four"_banks._It_is_a_division_of_FirstRand,_a_large_financial_services__conglomerate,_which_trades_on_the__Johannesburg_Securities_Exchange_(JSE),_under_th_...
_gave_birth_to_Barclays.html" "title="First_National_Bank_(South_Africa).html" "title="Anglo-Egyptian_Bank.html" ;"title="ow a public limited company PLC. the Anglo-Egyptian Bank">ow a public limited company PLC. the Anglo-Egyptian Bank and First National Bank (South Africa)">National Bank of South Africa First National Bank (FNB; af, Eerste Nasionale Bank (ENB)) is one of South Africa's " big four" banks. It is a division of FirstRand, a large financial services conglomerate, which trades on the Johannesburg Securities Exchange (JSE), under th ...
gave birth to Barclays">Barclays Bank Barclays () is a British multinational universal bank, headquartered in London, England. Barclays operates as two divisions, Barclays UK and Barclays International, supported by a service company, Barclays Execution Services. Barclays traces ...
 in Nigeria. In 1948, the British and French Bank for Commerce and Industry started operations in Nigeria, which metamorphosed into the United Bank for Africa. The first domestic bank In Nigeria was established in 1929 and called Industrial and Commercial Bank. The bank liquidated in 1930 and was replaced by Mercantile Bank in 1931. The African Continental Bank was created in 1949 as the only sustainable indigenous bank after the liquidation of the Industrial and Commercial Bank. The year 1947 shows the emergence of an agricultural bank called the Nigerian Farmers and Commercial Bank.


The modified universal banking model

In 2010, the Central Bank of Nigeria re-modified the existing universal banking model that permits a commercial banking license holder to operate in other non-core banking, either directly or indirectly, through designated subsidiaries. The introduction of this scheme classifies banking licenses into commercial, Merchant bank, Merchant and Specialised/ Development Banking Licenses.


Nigeria banking reform

Nigeria banking reform can be divided into two main phases, 2004 and 2009. Each phase had significant economic effects:


Banking Reform of 2004 and its effect

This reform focused on bank consolidation through the mechanism of merger and acquisition. This resulted in rebasing of commercial banks from ₦2 billion to ₦25 billion, while the 89 existing commercial banks in the country became 25. The apex bank apart from capitalization also invested in banking automation which enhances banking returns. The reform established a reporting portal for bank customers for the purpose of information sharing. Under this reform, deposits from public sectors and government-owned agencies can be collected by the commercial banks in order to enhance their level of liquidity.


Banking Reform of 2009 and its effect

The
Asset Management Corporation of Nigeria Asset Management Corporation of Nigeria (AMCON) is a body established by the Act of the National Assembly of Nigeria in July 2010 with an intended 10 years lifespan. The concept is in consonance with the operation of the National Asset Management ...
AMCON was established in 2009 by the
National Assembly of Nigeria National may refer to: Common uses * Nation or country ** Nationality – a ''national'' is a person who is subject to a nation, regardless of whether the person has full rights as a citizen Places in the United States * National, Maryland, ce ...
. The institution acquires
non-performing loan A non-performing loan (NPL) is a bank loan that is subject to late repayment or is unlikely to be repaid by the borrower in full. Non-performing loans represent a major challenge for the banking sector, as it reduces the profitability of banks, and ...
s of commercial banks. The financing of AMCON is composed of a ₦50 billion CBN fund and 0.3% of total assets of participating commercial banks. It also supports the implementation of
International Financial Reporting Standards International Financial Reporting Standards, commonly called IFRS, are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB). They constitute a standardised way of describing the company's f ...
(IFRS) for global reporting compliance in terms of reporting. This reform reviewed the universal banking model by restricting commercial banks to banking activities only. The reform also addresses excessive banking interest by the creation of a non-interest bank.
Sarah Alade Sarah Alade was the acting governor of the Central Bank of Nigeria during the suspension of Lamido Sanusi until his tenure ended. She was appointed to the post by President Goodluck Jonathan on 20 February 2014. Alade was appointed acting gover ...
, Deputy Governor of the
Central Bank of Nigeria The Central Bank of Nigeria (CBN) is the central bank and apex monetary authority of Nigeria established by the CBN Act of 1958 and commenced operations on 1 July 1959. The major regulatory objectives of the bank as stated in the CBN Act are ...
, announced that five Nigerian bank CEOs were being dismissed in August 2009. Five replacements were named with immediate effect including
Funke Osibodu Olufunke Iyabo Osibodu or Funke Osibodu is a Nigerian banker who led Ecobank Nigeria and the Union Bank of Nigeria. Life Funke Osibodu was born in January 1959. She attended the University of Ife and the Harvard Business School.< ...
to lead the
Union Bank of Nigeria Union Bank of Nigeria Plc is a commercial bank in Nigeria. It has been operating in Nigeria since 1917. Overview Union Bank is a large commercial bank, serving individuals, small and medium-sized companies, as well as large corporations and orga ...
and Suzanne Iroche who took over as CEO of FinBank.CBN sacks 5 banks' directors
Gabriel Omoh and Babajide Komolafe, 14 August 2009, VanguardNGR, Retrieved 23 February 2016 Anele explained that the product has been rolled out in Nigeria before subsequent release in other countries where UBA operates. On her part, Dupe Olusola, UBA’s group head of marketing, said the bank is committed to empowering its customers to fund their urgent needs


See also

*
Central Bank of Nigeria The Central Bank of Nigeria (CBN) is the central bank and apex monetary authority of Nigeria established by the CBN Act of 1958 and commenced operations on 1 July 1959. The major regulatory objectives of the bank as stated in the CBN Act are ...
*
Asset Management Corporation of Nigeria Asset Management Corporation of Nigeria (AMCON) is a body established by the Act of the National Assembly of Nigeria in July 2010 with an intended 10 years lifespan. The concept is in consonance with the operation of the National Asset Management ...


References

17 Asemota
History and origin of Banking in Nigeria"
Retrieved 5 May 2019. {{Africa topic, prefix=Banking in Banking in Nigeria,