| ‘ No cause for
alarm over new branches
...Only one bank in Nigeria has up to 400 branches’
By TAIWO OLUWADARE
Saturday, February
23, 2008
 |
• Comrade
Adeleke Hassan, NUBIFIE national President
Photo: Sun News Publishing |
| |
Many Nigerians feel alarmed at the rate banks expand in branch
network since the consolidation and have the notion that the
banks may soon be too many for the users. But an expert in
the area and president of the bank workers has a different
view.
Comrade Adeleke Hassan, the NUBIFIE national President’s
position is that the banks have not afterall overreeached
their expansion limits and should still do more.
With his indepth knowledge of the sector, he noted that there
is just one bank in Nigeria that has up to 400 branches all
over the nation.
He also stated the reason banks fall over each other at the
stock market advertising IPOs and every now and then calling
for investors to bring more money. He also allayed the fear
that the IPOs may soon drain the liquidity in the market,
insisting the CBN which regulates the banks and their activities
has the task of checking such occurrence and creating a balance
between normal liquidity in the open market and that of the
banks as any tilt in the balance may be harmful for the economy.
Worried about expansion?
There is no cause for worry. At least, a bank can have up
to two branches. There is no bank in Nigeria now has up to
400 branches except the Union Bank that has up to 405 branches.
The expansion, I think is good because it brings banking services
closer to the people. If possible you go out of your house
and you find a bank near you to pick your money that will
be better.
Bank robbery
They only way to curb the menace is to create more jobs. There
are no two ways to this. There are a lot of people roaming
about without job. And once they don’t have any alternative
to their problems, there is the tendency that they will face
the temptation of resorting to robbery. The only solution
is that government should create jobs. Investigation and observation
has shown that the people in armed robbery fall within the
category of working age which is an indication of joblessness
that led them into robbery. Although they can have super power,
behind them, but creation of job opportunities will bring
down the rate of robbery.
Bankers’ safety
I can say sincerely that bank workers are exposed to serious
dangers and risks. Adequate security has not been attained
in banking sector. The system of evacuating or moving money
from a place to the other is not in the right track. I expect
Central Bank should make money transfer electronic or by a
super machine like an amoured tank for money and banker safety.
But the problem is the affordability of the services by the
banks so that such machinery will move money around. But if
the Central Bank can say as a regulatory body, we will give
a stipulated amount to execute this and the banks pay back
in installmental, I believe banks will embrace the change.
Impact of bank expansion
It has the benefit of creating more employment and it makes
it easy for people to have access to loans and other bank
services. Banks also empower traders by providing for them
the money to enhance the growth of their business. Today,
Banks are interested in low scale loans because of recapitalization.
There is no bank that cannot boast of N60 billion. That explains
that they are looking for big time projects that can fetch
them higher returns – that investments in areas such
as oil, gas, and telecommunication industry. I can now say
that banks are taking the lead role to improve the economy
of the country.
Expansion and other sectors
I don’t see how expansion in banking network can affect
other sectors of the economy, rather it will assist them.
For instance, the manufacturing company will love the banks
to be located close to them to save them the risk of carrying
money up and down.
The issue of shareholding, contrary to an insinuation that
it is exploitation, is as old as the economy itself. I want
to say that the banking sector just started selling shares
since they became public liabilities. No sector of the economy
that does not solicit for shareholding from the public as
a means of raising money or capital. Therefore, it is not
only the banks that sell shares.
The reason we see the banks in share solicitation is because
they need more money for further investment. The recapitalisation
exposed them to higher targets. The base line was N25b, but
any bank that wants to invest in bank settlement must have
up to N100 billion. Therefore, no bank wants to stay behind
and that is why they are very conspicuous in capital market
today. Everybody wants to compete effectively to meet the
demand. Also because of the vagary circumstance as the CBN
can still come up with another policy which may make them
lag behind as a result of lack of financial muscle. This fear
makes them struggle more and more to remain fit. They also
want to compete to meet the standard of the banks in the international
scene because to whom much is giving, much is expected. The
shareholders need the profit and something to show for their
investment in the bank and that another reason fpr a jostle
to remin relevant.
Investor as ultimate beneficiary
The investors in the sector remain the ultimate beneficiary
in bank expansion and better financial base. For example,
the share you bought at N4 turns or grows to N34 within a
period.
This is the indication that, if you invest N1 million, it
can fetch you nothing less than N30 million over time.
Money scarcity
To make sure the constant sale of shares does not cause cash
sqeeze in the society is the reason why we have regulatory
body in the system which is the CBN. The Central Bank of Nigeria
knows when we have much money in circulation and when it can
be evacuated. It also knows when there is excess liquidity
in gthe banks and how to offload that in order not to cause
a harmful economic trend. The expected question is that if
banks have much money but that is not utilized how the economy
would be affected. If you have much money and you don’t
ultilize it, there is not benefit for investors. I believe
banks cannot do this at the detriment of the investors. |
