This, they argue, will enable investors quickly think of injecting liquidity into any of the troubled banks. For instance, the new standard of reporting (International Financial Reporting Standard (IFRS)) is said to already be in practice in over 100 countries, and so, any interested bank from these countries will certainly find it easy to talk of processing the merger/acquisition processes.
IFRS is defined as a set of international accounting standards stating how particular types of transactions and other events should be reported in financial statements. IFRS are issued by the International Accounting Standards Board. Although, they are sometimes confused with International Accounting Standards (IAS), which are the older standards which IFRS replaced.
Investopedia says the goal with IFRS is to make international comparisons as easy as possible. But with only a handful of banks in the country yet to comply, it may be difficult for any such comparison of financials across the globe.
Unfortunately, many of the banks in the country are yet to meet with acceptable international standard of reporting. But even at that, it is still not yet late, even though experts warn that there is the need for banks, particularly, the troubled ones to be seen as taking the conversion process more seriously, as this could sway investments early to the troubled banks.
This argument funny enough does not however hold with Bismark Rewane, chief executive of Financial Derivatives who says that buying a bank or any asset for that matter depends on the value attached to it. According to him, there is the business and financial considerations. In the business consideration you think of the strategic reasons - why you are buying it, just as you also think of ratios for financial reasons.
On the whole, all, he opines that, whether the bank is IFRS compliant or not, may not matter much, since one could buy an asset with zero value, but for strategic reasons.
As such, he insisted that the IFRS is an important standard to follow.
Perhaps this explains why the CBN governor, Sanusi Lamido Sanusi has been publicly courting international banks to enter the market, in particular, UK, Chinese and South African banks. So far, only South African banks have made public their interest, with Standard Bank which currently is increasing its branch network and Nedbank, FirstRand and Absa all applying for banking licenses from the CBN. At the same time, it has been strongly rumoured that Barclays Bank and HSBC are considering their options at this time.
However, so far, only five banks are said to have complied by over 50 percent with the recommended International Financial Reporting Standard (IFRS). It is expected that after December 31, 2009, the banks will follow the IFRS in reporting all their financials next year, beginning from the quarterlies.
Details made available to BusinessDay reveal that these five banks have been guided to over 50 percent compliance with the new reporting standard, while other banks are far from the 50 percent compliance, even as some have yet to start at all.
According to James Walton, Clients and Markets Leader, Deloitte West and Central Africa, only Skye Bank, First Bank of Nigeria, GT Bank, Standard Chartered Bank, and United Bank for Africa (UBA) have complied to a reasonable level.
Walton noted that in terms of global use, the IFRS is used in more than 100 countries, and that by 2011, most countries will either require IFRS or at least permit IFRS.
Mohammed Abdullahi, spokesman of the apex bank meanwhile, insisted it is too early for any assessment, especially with regards to the level of compliance with the IFRS. He reminisced that, after all, the deadline for compliance is 2010, and as such, there is no need for immediate comparison.
But Isiaka Aliyu, an investment banker is of the view that, any of the foreign investors could come knocking on the door of any of the troubled banks, and when that happens, the level of transparency in financial reporting would come handy.
To that, Abdullahi responded to BusinessDay's inquiries, insisting it was one of the reasons the financial advisers were appointed in the first place, and as such, the CBN has taken care of all such expectations.
According to him, the merger and acquisition thing is on-going, suggesting there was no time limit set as to when to merge/acquire or not!
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News Banking & Finance Between IFRS compliance and call for foreign, local investors
News Banking & Finance Between IFRS compliance and call for foreign, local investors
Between IFRS compliance and call for foreign, local investors
This, they argue, will enable investors quickly think of injecting liquidity into any of the troubled banks. For instance, the new standard of reporting (International Financial Reporting Standard (IFRS)) is said to already be in practice in over 100 countries, and so, any interested bank from these countries will certainly find it easy to talk of processing the merger/acquisition processes.
IFRS is defined as a set of international accounting standards stating how particular types of transactions and other events should be reported in financial statements. IFRS are issued by the International Accounting Standards Board. Although, they are sometimes confused with International Accounting Standards (IAS), which are the older standards which IFRS replaced.
Investopedia says the goal with IFRS is to make international comparisons as easy as possible. But with only a handful of banks in the country yet to comply, it may be difficult for any such comparison of financials across the globe.
Unfortunately, many of the banks in the country are yet to meet with acceptable international standard of reporting. But even at that, it is still not yet late, even though experts warn that there is the need for banks, particularly, the troubled ones to be seen as taking the conversion process more seriously, as this could sway investments early to the troubled banks.
This argument funny enough does not however hold with Bismark Rewane, chief executive of Financial Derivatives who says that buying a bank or any asset for that matter depends on the value attached to it. According to him, there is the business and financial considerations. In the business consideration you think of the strategic reasons - why you are buying it, just as you also think of ratios for financial reasons.
On the whole, all, he opines that, whether the bank is IFRS compliant or not, may not matter much, since one could buy an asset with zero value, but for strategic reasons.
As such, he insisted that the IFRS is an important standard to follow.
Perhaps this explains why the CBN governor, Sanusi Lamido Sanusi has been publicly courting international banks to enter the market, in particular, UK, Chinese and South African banks. So far, only South African banks have made public their interest, with Standard Bank which currently is increasing its branch network and Nedbank, FirstRand and Absa all applying for banking licenses from the CBN. At the same time, it has been strongly rumoured that Barclays Bank and HSBC are considering their options at this time.
However, so far, only five banks are said to have complied by over 50 percent with the recommended International Financial Reporting Standard (IFRS). It is expected that after December 31, 2009, the banks will follow the IFRS in reporting all their financials next year, beginning from the quarterlies.
Details made available to BusinessDay reveal that these five banks have been guided to over 50 percent compliance with the new reporting standard, while other banks are far from the 50 percent compliance, even as some have yet to start at all.
According to James Walton, Clients and Markets Leader, Deloitte West and Central Africa, only Skye Bank, First Bank of Nigeria, GT Bank, Standard Chartered Bank, and United Bank for Africa (UBA) have complied to a reasonable level.
Walton noted that in terms of global use, the IFRS is used in more than 100 countries, and that by 2011, most countries will either require IFRS or at least permit IFRS.
Mohammed Abdullahi, spokesman of the apex bank meanwhile, insisted it is too early for any assessment, especially with regards to the level of compliance with the IFRS. He reminisced that, after all, the deadline for compliance is 2010, and as such, there is no need for immediate comparison.
But Isiaka Aliyu, an investment banker is of the view that, any of the foreign investors could come knocking on the door of any of the troubled banks, and when that happens, the level of transparency in financial reporting would come handy.
To that, Abdullahi responded to BusinessDay's inquiries, insisting it was one of the reasons the financial advisers were appointed in the first place, and as such, the CBN has taken care of all such expectations.
According to him, the merger and acquisition thing is on-going, suggesting there was no time limit set as to when to merge/acquire or not!