Fact-check: Is CBN Planning New Round of Recapitalization For Banks?
Claim: There has been a viral report across several social media platforms that the Central Bank of Nigeria (CBN) is planning a new round of recapitalization for banks in Nigeria. The report was not only posted social media platforms, but also published by news platforms.
Full Text: The widely shared report has this caption:. ‘CBN Plans New Round of Recapitalization for Banks’.
It reported that the CBN Governor, Mr Olayemi Cardoso, announced the apex bank’s decision at the 58th Annual Bankers’ Dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN) last Friday night in Lagos.
Recapitalization is the process of restructuring a company’s debt and equity mixture, often to stabilize a company’s capital structure. The process mainly involves the exchange of one form of financing for another, such as removing preferred shares from the company’s capital structure and replacing them with bonds.
It’s also a strategy a company can use to improve its financial stability or overhaul its financial structure. To accomplish this, the company must change its debt-to-equity ratio by adding more debt or more equity to its capital. There are many reasons why a company may consider recapitalization including:
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Verification: in the bid to verify the authenticity or otherwise of the claim, PRNIGERIA fact-check team conducted keyword searches which showed that conventional print and ‘electronic’ media reported the same with varied captions which included: ‘CBN Plans New Round of Recapitalisation For Banks’
In all the reports, the Central Bank Governor Mr Olayemi Cardoso was quoted directly at the source.
A visit to the apex bank’s X handle indicates plans in the offing by the CBN to recapitalize banks in Nigeria.
Meanwhile, in a video obtained by PRNigeria, it was discovered Mr Cardoso made the announcement at the 58th Annual Bankers’ Dinner hosted by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos.
Cardoso observed that in his Policy Advisory Council report on the national economy, President Bola Ahmed Tinubu set an ambitious objective of generating a GDP of one trillion dollars by 2030, with clearly defined priority areas and tactics.
Cardoso said that in order to meet the target, Nigeria must experience more fast and inclusive economic growth.
“The administration has already commenced this journey through fiscal reforms, including the removal of petrol subsidies and the unification of the foreign exchange market rate.
“Considering the policy imperatives and the projected economic growth, it is crucial for us to evaluate the adequacy of our banking industry to serve the envisioned larger economy,” he said.
Conclusion:
PRNigeria therefore concludes that the claim that CBN is planning a new round of recapitulation for banks is true.
By PRNigeria
