The Central Bank of Nigeria (CBN) has said that there was no truth in a report that seven Nigerian banks were undercapitalised.
Mrs Tokunbo Martins, the Director, Banking Supervision, told journalists at the end of the Bankers Committee Meeting in Lagos on Wednesday that there was no truth in the report.
A Dubai-based international investment bank , Arqaam Capital, had reported that seven Nigerian banks were undercapitalised to the tune of N1tn (3.2 billion dollars).
The stress test by Arqaam Capital also reported that two banks were close to being insolvent.
Martins said that commercial banks were facing some challenges that were not peculiar to Nigeria, adding that Non Performing Loans (NPL) at 11 per cent was not the focus for now.
“As Director Banking Supervision, I wish to state that the report that seven banks are undercapitalised is not true.
“That our banks have non-performing loans at 11 per cent is not the focus for now.
“We should totally ignore such a story,’’ Martins said.
The director said that commercial banks in the country had huge capacity to generate income to absorb any losses that could arise from such loans.
“The fact that a country has non- performing loans at this period is expected, so I don’t think that any jurisdiction should be demonised because of NPL,’’ Martins said.