who keyshia cole dating Soludo consolidating nigerian banking

In addition, while there exists a growing body of theoretical and empirical studies that attempt to appraise the effects of bank reforms and consolidation programme on various measures of organizational performance in the banking sector (Hesse, 2007) its effects on bank lending activities is yet to witness the same level of academic enquiry within the Nigerian banking empirics.

This is apparently a serious omission and the present study stands to fill this gap.

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Rather than performing its crucial financial intermediary roles, overwhelming proportion, especially and particularly the new generation banks were not interested in intermediating funds from depositors to borrowers but rather made quick profits from interest arbitrage and other rent seeking activities.Thus, the need to engender a banking system that can nurture and support the growth and development of the real sector, widely recognized as an economy’s growth engine, stands out prominent as justification for the reform package.Specifically, the objectives of the banking reform, which is part of the general agenda of the Government overall economic reform programme (the National Economic Empowerment and Development Strategy (NEEDS)), include: The main thrust of the reform package, which is anchored on a thirteen-point agenda, is to consolidate and recapitalize banks by increasing their shareholders’ funds to a minimum of N25 billion (about US0 million) with effect from December 31st, 2005.Other highlights include: the adoption of risk-focused and rule-based regulatory framework; the adoption of zero tolerance in the regulatory framework, especially in the area of data/information rendition/reporting; enforcement of dormant laws, especially those relating to the vicarious liabilities of banks’ board members in cases of bank failure; revision and updating of relevant laws and drafting of new ones relating to the effective operations of the banking system etc.The reforms, widely referred to as consolidation of the banking system, are part of the broad on-going national economic reforms.

As at the end of 2004, there were 89 universal banks operating in Nigeria, comprising institutions of various sizes and degrees of soundness.

Consequent on the foregoing, major thrusts of the reforms and consolidation programme in the banking sector had been crucially targeted to alter those factors that theoretical constructs postulated to alter supply of loans from the banking system.

Such factors as identified in the literature include: the bank’s size, the liquidity level of the banking firm and the level of bank capitalization (Hubbard, 2000).

For policy, the need to strengthen the overall financial system within which the banking sector operates becomes fundamental if the potentials of the bank consolidation exercise will be fully realized. Substantial body of empirical literature agreed that for sustainable growth, the banking sector has to be effective and efficient to respond favorably to the needs of the productive sectors of the economy.

Bank Consolidation Programme and Lending Performance in Nigerian Banking System: An Empirical Analysis with Panel Data.

The foregoing suggests that the alteration of the structure of the banking system in terms of the size, liquidity and capitalization position of the typical post-consolidation banking firm portends proportionate and significant alterations in the lending capabilities of the banking system.