Founder and managing director, Cowry Asset Management Limited, Johnson Chukwu, has stressed the need for the Central Bank of Nigeria (CBN) to deploy available Infrastructure technology and Bank Verification Numbers (BVN) to tackle delay in the verification of banks’ offers and ensure speedy conclusion of the process.
This follows the delay in the apex bank’s verification process which has continued to raise concerns among investors, especially as it has not been able to conclude any almost four months after the closure of some offers.
Chukwu stated this at the yearly workshop of the Capital Market Correspondents Association of Nigeria (CAMAN) with the theme: ‘Banks’ Recapitalisation: Bridging the Gap Between Investors and Issuers in the Nigerian Capital Market’ held in Lagos at the weekend.
He said the deployment of a high level of IT available at the CBN and the use of the BVN would fastrack the process of accepting or rejecting offers and enable investors to get their allotment or deploy their funds in other profitable economic activities.
He argued that while the apex bank’s role in verifying the source of the capital invested is important, the longer period for completion of the verification process is dampening investors’ confidence.
According to him, this is particularly worrisome for investors whose funds may be returned where the offers may be oversubscribed given the missed reinvestment opportunities.
Chukwu also stated that the current CBN requirements for investors investing in banks shares are seen by many as overly stringent and creating barriers for both issuers and investors.
He cited the provision of three-year audited financial statements, board resolution authorising the investment and tax clearance certificates for the past three years for corporate investors, noting that these requirements are disincentive to investment in the capital market.
He added that while regulation is necessary for maintaining the stability and integrity of the financial system in ensuring that unqualified capital is not invested in the banks, there is need to leverage on existing customer information in the banking system to avoid imposing onerous conditions on investors.
Chukwu described banks’ recapitalisation as a key strategy for strengthening the Nigerian banking sector and fostering economic growth, arguing that the success of these efforts hinges on effectively bridging the gap between investors and issuers in the capital market.
Outlining the role of the capital market in the recapitalisation exercise, Chukwu noted that when banks access the capital market and demonstrate their ability to raise capital through successful IPOs, rights issues and bonds, it strengthens investors’ confidence and sends a positive signal to the broader financial market.
He called for concerted efforts from both banks and investors, supported by regulators in ensuring that the Nigerian banking sector remains resilient, competitive, and capable of driving the country’s economic growth for the future.
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