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The Central Bank of Nigeria (CBN) said yesterday that banks’
overhead costs would go down by about 30 percent in the next three years if
their managements build independent sources of power supply for their
operations.

Lamido Sanusi, the bank governor, said at the 4th annual banking
and finance conference in Abuja that Central Bank will provide support and
encouragement to facilitate this initiative.

Mr. Sanusi, who spoke on the topic ‘Evolving financial
landscape: Strategies for economic resilience”, said:

“Given the criticality of efficiency to cost of funds, the CBN
has recently started a shared services project, in collaboration with banks,
aimed at centralising back offices and the industrialisation of common
processes.

“In the next three years, we will reduce overhead costs in the
banking industry by 30 percent. We are also working towards establishing an IPP
for independent power supply for all banks operating in Lagos as a pilot
cluster.”

The governor added that the recent decision to review the
universal banking model adopted in 2001, was to enable banks re-examine their
existing business models to identify their strengths and see what opportunities
they could apply to enhance maximum returns.

He told the participants, including vice president, Namadi
Sambo; president of the Chartered Institute of Bankers of Nigeria, Laoye
Jaiyeola; Accountant General of the Federation (AGF), Ibrahim Dankwaabo, and
managing directors of banks, as well as their counterparts in the financial
services sector, that the financial system is experiencing stability, pointing
out that Nigeria is the only country that witnessed a banking sector crisis
during the global economic crisis without a depositor losing money.

More efficient industry

Mr. Sambo noted the pivotal role of the Central Bank in the
implementation of the power sector reforms, pointing out that the Federal
Government will continue to support its efforts to ensure market discipline in
the financial sector.

“The Federal Government identifies with the CBN reforms at
repositioning the banking sector, and it is our hope that a more efficient
banking industry will emerge from the whole exercise,” Mr. Sambo said,
underscoring the need for all to continue to rally round the Central Bank to
support the sector by ensuring market-driven competition, as well as bringing
greater efficiency of the banking industry and the economy at large.

Mr. Sambo assured that government would give all the support
needed to encourage the real sector achieve single digit rate, adding, “We need
to address power to ensure that power is stable. We have expended N10 billion
on thermal plants for distribution to sub stations.”

He challenged participants to take the opportunity of the
conference to take a critical look at the country’s financial system and come
up with ideas to support its safety and soundness, pointing out that this would
not only help the system withstand both internal and external shocks, but would
enhance the confidence of both the depositors and investors.