by Ademola Alawiye

The Deputy Governor, Financial System Stability, Central Bank of Nigeria, Dr. Kingsley Moghalu, has said that mergers and acquisitions among Deposit Money Banks in the country will be concluded this year.

Moghalu said this at the signing of a Memorandum of Understanding between FITC and International Finance Corporation in Lagos.

According to a statement obtained by our correspondent on Wednesday, Moghalu pointed out that corporate governance was key to the process of mergers and acquisitions, adding that it was not just about the money.

He said, “Now is a time of normalisation. The stability of Nigerian banks is returning gradually and we have seen the mergers and acquisitions’ negotiations going on within the banks. By the end of this year, we really expect the processes to have concluded in practice.”

On corporate governance, Moghalu said, “Corporate governance is very key in the process of M and As. It’s not just about bringing money, not just about who can bring the capital. We want partners who can demonstrate corporate governance skills and risk management skills. We need to enhance the quality of banks.”

Moghalu said that there were a lot of unresolved issues in corporate governance in the Nigerian banks.

He added, “We are not going to resolve them today because the reform is a process and not an event. It is a process that will take at least five years to 10 years and also have to be responsive to how situations develop in the future. Corporate governance problems in Nigerian banks are a reflection also of problems in public corporate governance.

“There is a problem in our society, there was a culture of impunity that existed in the past and that culture was reflected very heavily in a number of Nigerian banks because the private sector felt that it was making its own profit and therefore answerable to nobody, and so we had situations where chairmen and chief executive officers of Nigerian banks appointed members of the board of directors, and so they did not have cause exercising the responsibility as a supervisory board over the management.”

Source: Punch