Capital alone won’t prevent failure, NDIC cautions banks

The completion of Nigeria’s banking sector recapitalisation has strengthened the capital base of banks, but the Nigeria Deposit Insurance Corporation (NDIC) has warned that bigger balance sheets alone will not guarantee stability, insisting that stronger risk management, compliance and corporate governance must determine how the fresh capital is deployed. Managing Director and Chief Executive Officer of the NDIC, Thompson Oludare, gave the warning against the backdrop of the Corporation’s continuing role in resolving failed financial institutions and protecting depositors. He spoke in Lagos at a three-day workshop for senior management and executive staff of the NDIC, organised in collaboration with the Bureau of Public Procurement (BPP) with the theme, “Driving Excellence through Transparency, Compliance, and Efficiency.” Oludare described the banking industry’s recapitalisation, which ended on March 31, as a major development for financial-system resilience, but cautioned that raising capital was only the beginning of the process.