BANKS exposure to margin loans, which has greatly impacted negatively on their operations following the global financial meltdown, has been put at N1 trillion by the Nigerian Stock Exchange (NSE).Speaking at the yearly NSE parley with chief executive officers of quoted companies, the Director-General of the Exchange, Professor Ndi Okereke-Onyiuke, said contrary to reports that the banks loans was all advanced to dealing members of the exchange, only N300 billion was actually given to them while the remaining N700 billion was loaned to other institutional investors.The NSE boss, who said the statistics of the facilities by the banks were contained in the coffers of the Central Securities Clearing System (CSCS), a subsidiary of the exchange, noted that the money loaned to the dealing members and mostly to real estate investors had got stuck due to the global financial meltdown.

According to Okereke-Onyiuke with the exposure of the banks to the margin loans and controlling almost 50 per cent of transaction in the equities market, the economic crisis had impacted negatively on the stock market, causing a great loss in the value of investors’ wealth in the market.Onyiuke-Okereke, who said the effect of the meltdown on the market was huge, added that the controversy dogging margin loans and frosty relationship between many banks and their stockbrokers posed real danger to market stability.

On improving shareholders value, the NSE DG enjoined the quoted companies CEOs to improve their organisations’ culture of customer relationship while building a strong reputation, even as they should ensure periodic appraisal through risk management policy for efficiency and effectiveness.“Cost reduction without prejudice to building a strong revenue base, increasing productivity and product quality/service; ensuring compliance with regulations, guiding your organisation’s business,” should be your watchword,” she said