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Massive Job Loss Imminent In 2016 As Banks Opt For Merger Or Acquisition

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Following a recent revelation that some three banks will need to raise their capital base in the first quarter of 2016, there are indications that some of the banks may opt for merger or acquisition as a way out of the problem.

These now raise the fears that there might be lots of job loss if some of the banks merge or one acquires the others.

Speculation is rife that about six commercial banks are in need of recapitalisation and would likely merger to stay in business by 2016, gathered Leadership Newspaper.

Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, had dismissed reports that eight banks were in need of fresh liquidity claiming “there is no Nigerian bank that has capital adequacy problem today and all the news around that is false.

“We stress-test banks’ balance sheet and profit loss accounts on a regular basis using different scenarios. That is what we do as a responsible central bank that monitors the strategic health of banks. We carry this exercise out as a practice and I hope this puts this matter to rest.”

Crude oil prices have fallen to as low as $38.11 per barrel from over $110 per barrel a year ago. This has adversely affected banks’ oil assets.

Besides, the level of non-performing loans in the sector has risen.

Managing Director, Sterling Bank Plc, Yemi Adeola, who gave a hint last week, said he envisaged possible shrinking in the number of local banks in the New Year.

There are already moves suggesting that trend, he said, but he did not name any bank.

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