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The capital base of banks in Nigeria has been eroded due to rising inflation and the recent harmonization of foreign exchange rates, according to interviews with The PUNCH.
Fidelity Bank and FBN Holdings have both announced plans to raise additional capital in the coming weeks.
Financial analyst Okechukwu Unegbu attributed the situation to Nigeria’s inflation rate, currently at 22.79%, and the floating of the naira.
Unegbu described the state of banks as endangered and called for caution.
Kurfi Garba, Managing Director of APT Securities and Fund Limited, predicted that more banks would seek fresh capital injection.
He emphasized the need for local banks to boost their capital base in order to compete on the global stage.
However, concerns were raised about the purchasing power of investors, which has also been impacted by inflation.
The success of the capital raise will depend on the confidence and willingness of the populace to invest in shares.
