Nov 29 (Lagos) - The Central Bank of Nigeria has ordered banks to task and asked them to stop all misleading advertisements that basically lead to 'inducement' rather than actual advertising.
CBN is on point with this agenda. Nigerian banks have for so long managed to publish misleading advertisements that sound like lotteries than an advertisement for actual banking products.
Overall advertising standards in Nigeria are laughable with Companies able to claim outrageous results as result of using their products.
CBN has gained respect for making this long overdue move.
Generally CBN is re-gaining its lost trust from the 2014-2024 period. This is another step in the right direction.
As for banking stocks, this will be another strain for them. The fact remains that Nigerian banks act more like round tipping agents than real banks doing banking. They are highly complicit in aiding the devaluation of the Naira as well as their usual tactic of offering loans to their 'friends' which later get written off and and no one is help accountable.
Just 20 years ago, these banks were re-capitalized and now they are re-capitalizing again. Their dividend pay-out ratios are laughable while their managements enjoy a luxury lifestyle. If you take all the Nigerian banks and put them together, their collective valuation can be matched by just 1 bank of South Africa. That is the true picture of Nigerian banking system.
What kind of banking sector does that?
It is no wonder that the real companies that offer 'banking' to consumers are not even listed on the stock exchange - companies like Opay and moniepoint that are actually micro-finance banks do more real banking than these public listed banks.
So the move by the CBN is definitely valid and is good for Nigerian consumers.