Analysts predict hard times for banks in 2015

Financial  analysts have  predicted that 2015 would be a more difficult year for banks  as they need to take courage to  face  major challenges that could severely affect their performance  at the end of the year.
Analysts were of the view that the CBN policy that the government funds would no longer stay in banking system would reduce  banks deposits, thereby affecting  availability of  funds in banks for lending. This challenges, according to them would  impact negatively on the banks business and profit making, and it will  as well  make things more difficult for manufacturers to borrow.
They explained that insecurity is still a challenges that could push  the banks to close down some of their branches in troubled areas, adding that  dwindling oil prices resulting to disposable income and less deposits and power supply which is still not looking up would also affect their performance this year.
They  expressed the need for the Central Bank of Nigeria (CBN) to monitor closely the banks non performing loan, stressing that it has been on the increase in the recent time.                                                  An analyst, Mr Chigozie  Anyanwu said that  increase in operating costs of banks  are expected to pull down the nation’s  banks’ overall  performance in 2014,  as the problem of  insecurity, especially in the North East, persisted.
According to him, “the operating  costs are still very high, infrastructure is a constraint to the banks, Insecurity in the Northern areas also  affect banks operation over there, so this will affect their performance no matter the  strategies adopted. Banks growth may not be as much as what we expect.”  He  pointed out that  the interest rate in the savings accounts which was moved up from one percent to about 25 to 30  percent of the MPR is another cost that would have implication on the books of banks.  Speaking further he said “once the MPR goes up, that is additional cost to banks.”
A banker who pleaded anonymity said that there is stability in the nation’s banking industry. He said that banks in the past had huge NPL and  a lot of the toxic assets were sold to AMCON and since then a limit of 5 percent has been put for the non-performing loans of the banking industry and the banks are now operating within that particular range.