Bailed-Out Banks’ Managers May Seek Tenure Extension
- By Abimbola Tooki
- Published May 31st, 2010
- News
- Unrated
The managers of the eight bailed-out banks may seek tenure extension from the Central Bank of Nigeria (CBN) because they are not likely to turn the banks around within the two years that the CBN said they would stay in office. The extension may become even unavoidable as there are indications that the CBN may not be able to sell the banks as it had planned.
BusinessWorld investigations reveal that the managers of the banks are also looking at a longer tenure as the chances of any successful recapitalization of the banks looks even more remote.
But there are strong indications that the banks are gradually finding their rhythm and may soon return to profitability even though they are plagued by poor liquidity. But the managers of the embattled banks believe that given the rate of favourable response they have so far recorded, which is reflecting in their 2010 first quarter reports, some of the banks will recover from their state of technical insolvency and would begin to function normally before long.
However, the managers believe that despite the enormous recoveries so far made by the various banks, the absence of any core investor coupled with the low prices of the shares of the banks, they will need more time than the stipulated period by the CBN to stem the tide in the banks.
They are of the opinion that the CBN may have taken a decision on their tenure without adequate understanding of the level of rot in the banks and all that is required to reposition the banks. They noted that a good number of the banks are being repositioned as business ventures but need money to go into business activities, especially lending.
BusinessWorld investigations reveal that the managers of the banks are also looking at a longer tenure as the chances of any successful recapitalization of the banks looks even more remote.
But there are strong indications that the banks are gradually finding their rhythm and may soon return to profitability even though they are plagued by poor liquidity. But the managers of the embattled banks believe that given the rate of favourable response they have so far recorded, which is reflecting in their 2010 first quarter reports, some of the banks will recover from their state of technical insolvency and would begin to function normally before long.
However, the managers believe that despite the enormous recoveries so far made by the various banks, the absence of any core investor coupled with the low prices of the shares of the banks, they will need more time than the stipulated period by the CBN to stem the tide in the banks.
They are of the opinion that the CBN may have taken a decision on their tenure without adequate understanding of the level of rot in the banks and all that is required to reposition the banks. They noted that a good number of the banks are being repositioned as business ventures but need money to go into business activities, especially lending.
