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The Banking Sector in Nigeria
BY Louise Mitchell
Nigeria
18 February 2020
R 14 400.00 (ZAR)  
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The Banking Sector in Nigeria


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. Some small- and mid-sized Nigerian banks are battling to rebuild capital levels after a slump in oil prices triggered a foreign-currency shortage, and a recession in 2016 made it difficult for businesses to repay loans. Some commentators said the large banks were guilty of reckless lending to the oil sector while oil prices were high. After the slump, oil prices have recovered and banks have once again extended credit to the sector. High unemployment, subdued economic growth and vulnerability to oil prices are still causes for concern.


Investment Deterrents


Corporate governance is viewed as one of the biggest challenges faced by Nigerian banks, and financial mismanagement or misconduct by executive management has hampered their performance and sustainability. No foreign banks have entered the sector in the last 10 years. Central bank regulations stipulate that the aggregate investment of foreign banks in any of the top 10 local banks must not be more than 10% of their total capital. The United Kingdom’s HSBC and Swiss UBS left Nigeria in June 2018.


Report Coverage


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. The report includes comprehensive information on the state and size of the sector and factors that influence it. There are profiles of 34 companies including major banks First Bank of Nigeria, Guaranty Trust Bank, United Bank for Africa, Access Bank, Polaris Bank, Ecobank Nigeria, and Zenith Bank. TAJ Bank, which was licensed in 2019, is also profiled, as is Unity Bank, which has been trying to raise funds from foreign investors to recapitalise.


Extract



Description


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.


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