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Banking Industry Nigeria

The Banking Industry in Nigeria 2020

Louise Mitchell | Nigeria | 18 February 2020

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Introduction

This report on Nigeria’s banking industry covers financial institutions which include banks, other credit granting, lease financing, and loyalty and reward programmes, as well as central banking. Nigeria’s banking sector is the second largest in sub-Saharan Africa behind South Africa. Total assets were worth N39.6-trillion (naira) in August 2019. Domestic systemically important banks (D-SIBs), which are banks that may have a major impact on the economy if they fail, accounted for N22.39-trillion (63.8%) of N35.10-trillion total industry assets at the end of December 2018. Domestic credit was 0.19% (N34.3-trillion) of real GDP in Q3 2019, increasing from 0.15% (N26.4-trillion) in Q3 2018.

Strengths

• A robust banking regulatory framework has been implemented.
• Digital banking is helping to increase financial inclusion.
• The banking system is well capitalised, safely above the capital adequacy ratio.

Weaknesses

• Mergers of large banks with failed or distressed banks are increasing impaired loans for the merged entities.
• Oil-dependent economy vulnerable to commodity price shocks.
• Operating expenses of large commercial banks are increasing due to staff costs and implementation of technology platforms.
• Security concerns, including high levels of crime and terrorism.
• Shortage of skills.
• The sector is dominated by the major commercial banks.
• Weak and corrupt institutions.

Opportunities

• The expected growth of Islamic banking locally and continentally.
• The large unbanked population can be reached through digital banking.

Threats

• An increase in bank robberies endanger lives of customers and staff and affect banks’ profitability.
• Continuing slow economic growth, rising unemployment, and double-digit inflation may keep consumer spending under pressure.
• Government expenditure assumes relatively stable international oil prices.
• Increase in security threats and cybercrime activities.
• Pressure from the regulator to increase loans that might lead to increasing non-performing loans.

Outlook

Some stakeholders believe the biggest challenges facing Nigerian banks will be the increasing number of non-performing loans resulting from deteriorating macroeconomic conditions. Low levels of economic growth could impact on financial stability through higher unemployment and the reduced ability to service debt by households and companies. This, in turn, could lower the profitability of banks and affect the quality of banks’ assets. The central bank wants to boost economic growth in line with government policy. It is likely to keep using non-traditional policy tools, such as raising lenders\' loan-to-deposit ratios to force them to give out credit and support private sector output. New non-bank entrants and technological advances will challenge banks’ business models and fundamental change is inevitable.

The Banking Industry in Nigeria
The Banking Industry in Nigeria 2020

Full Report

R 1 900.00(ZAR) estimated $105.22 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 73.65 (USD)*

Table of Contents

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PAGE
1. INTRODUCTION 1
2. COUNTRY INFORMATION 1
3. DESCRIPTION OF THE INDUSTRY 2
3.1. Industry Value Chain 7
3.2. Geographic Position 9
4. SIZE OF THE INDUSTRY 10
5. STATE OF THE INDUSTRY 13
5.1. Local 13
5.1.1. Corporate Actions 20
5.1.2. Regulations 20
5.1.3. Enterprise Development and Social Economic Development 24
5.2. Continental 25
5.3. International 31
6. INFLUENCING FACTORS 33
6.1. Economic Environment 33
6.2. Government Initiatives 35
6.3. Financial Inclusion 35
6.4. Operating Costs 37
6.5. Information Technology (IT), Research and Development and Innovation 38
6.6. Environmental, Social and Governance (ESG) Factors 41
6.7. Terrorism and Security 41
6.8. Labour 43
6.9. Cybercrime and Fraud 45
7. COMPETITION 46
7.1. Barriers to Entry 47
8. SWOT ANALYSIS 47
9. OUTLOOK 48
10. INDUSTRY ASSOCIATIONS 49
11. REFERENCES 50
11.1. Publications 50
11.2. Websites 51
APPENDIX 1 52
Summary of Notable Players in all sub-Sectors of the Banking Industry 52
COMPANY PROFILES 56
ABBEY MORTGAGE BANK PLC 56
ACCESS BANK PLC 59
ASO SAVINGS & LOANS PLC 74
BANK OF AGRICULTURE LTD 77
BANK OF INDUSTRY LTD 79
CENTRAL BANK OF NIGERIA 82
CORONATION MERCHANT BANK LTD 84
DEAP CAPITAL MANAGEMENT & TRUST PLC 88
ECOBANK NIGERIA LTD 90
FCMB GROUP PLC 97
FEDERAL MORTGAGE BANK OF NIGERIA 100
FIDELITY BANK PLC 103
FIRST BANK OF NIGERIA LTD 106
FSDH MERCHANT BANK LTD 111
GUARANTY TRUST BANK PLC 115
INFINITY TRUST MORTGAGE BANK PLC 122
INFRASTRUCTURE BANK PLC (THE) 125
JAIZ BANK PLC 127
LETSHEGO MFB NIGERIA LTD 131
MULTIVEST MICROFINANCE BANK LTD 133
NATIONAL ECONOMIC RECONSTRUCTION FUND (THE) 135
NIGERIAN EXPORT-IMPORT BANK 137
OMOLUABI MORTGAGE BANK PLC 140
POLARIS BANK LTD 143
RAND MERCHANT BANK NIGERIA LTD 146
STANBIC IBTC BANK PLC 148
STANDARD CHARTERED BANK NIGERIA LTD 157
STERLING BANK PLC 161
TAJ BANK LTD 166
UNION BANK OF NIGERIA PLC 168
UNITED BANK FOR AFRICA PLC 173
UNITY BANK PLC 177
WEMA BANK PLC 180
ZENITH BANK PLC 183