United Bank for Africa, one of Nigeria's biggest banks, sees opportunities for growth in the central bank's new policies on the naira currency, its chief executive said on Tuesday.  UBA, which says it is Nigeria's biggest bank by customer base and balance sheet, welcomed the central bank's moves. "This will create a lot of opportunities for banks with the scale and capacity to play in the forex market. If they are smart there is a lot they can do," Tony Elumelu, UBA's chief executive officer, told reporters. "It seems like a well thought out process and given the record of the current management of the central bank, they have the discipline and the firmness of mind to execute it," he said. Elumelu said he saw President Umaru Yar'Adua, who took office on May 29, as a hands-off leader who would not interfere in the central bank's plans. Soludo oversaw a forced consolidation of the Nigerian banking sector in 2004-2005. UBA was one of 25 banks that emerged from the process from an original 89.

Analysts cite the banking consolidation as one of Nigeria's most successful reforms of recent years and banking stocks have boomed on the Lagos stock market since the process ended. Elumelu said partial liberalisation of the forex market that has already been achieved had been good for banks and the new measures would further improve the market. He said he expected the reforms announced on Tuesday to result in the federal government making greater use of commercial banks instead of using the central bank. "It will multiply the volume of transactions," he said. He also said that by forcing Nigerians to exchange their old naira notes for new ones by August 2008, the re-denomination could have the knock-on effect of persuading many of them to place their money in banks instead of keeping it in cash. Nigeria, Africa's top oil producer, is mostly a cash economy and the majority of people keep their earnings at home in bundles of notes. Elumelu also noted that automatic cash machines, which are extremely rare, would have 100 times more capacity after the re-denomination and this would accelerate the development of a cash machine network across the country

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