Banking
From The Report: Nigeria 2016
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Against the backdrop of a slowing economy and low oil prices, the Nigerian banking sector – filled with heavyweight regional players and the largest sector on the Nigerian Stock Exchange – has sought to play an increasingly important intermediary role, facilitating efforts to diversify the economy by expanding private sector credit and lending to small and medium-sized enterprises. However, macroeconomic conditions, including a depreciating currency and changes to the government’s fiscal policy, are impacting the ability of banks to deploy capital in the real economy. Furthermore, the Central Bank of Nigeria has unveiled a number of plans to tighten the risk management of the sector and further reduce the exposure of banks to government debt, all of which could herald significant changes to the competitive landscape.

This chapter contains an interview with Godwin Emefiele, Governor, Central Bank of Nigeria; and a roundtable with Peter Amangbo, Group Managing Director, Zenith Bank; Uzoma Dozie, Managing Director, Diamond Bank; and Herbert Wigwe, Group Managing Director, Access Bank; and Adesola Adeduntan, Managing Director and CEO, First Bank.

Articles from this Chapter

Overview

Credit where it is due: While lending to the private sector is increasing, claims on the government continue to be a much larger source of assets
OBG
plus

Against the backdrop of a slowing economy and low oil prices, the Nigerian banking sector – filled with heavyweight regional players and the largest sector on the Nigerian Stock Exchange (NSE) – has sought to play an increasingly important intermediary role, facilitating efforts to diversify the economy through increased private sector credit and lending to small and medium-sized enterprises (SMEs). However, macroeconomic conditions, including a depreciating currency and changes to the government’s…

Overview

Credit where it is due: While lending to the private sector is increasing, claims on the government continue to be a much larger source of assets
OBG
plus

Against the backdrop of a slowing economy and low oil prices, the Nigerian banking sector – filled with heavyweight regional players and the largest sector on the Nigerian Stock Exchange (NSE) – has sought to play an increasingly important intermediary role, facilitating efforts to diversify the economy through increased private sector credit and lending to small and medium-sized enterprises (SMEs). However, macroeconomic conditions, including a depreciating currency and changes to the government’s…

Interview

Removing barriers: OBG talks to Godwin Emefiele, Governor, Central Bank of Nigeria (CBN)
OBG
plus

Interview:Godwin Emefiele What can the CBN do to help encourage private sector lending and financial intermediation? GODWIN EMEFIELE: An important mandate of the CBN is the promotion of a sound financial system in Nigeria. Therefore, we recognise that efficient financial intermediation contributes to high levels of output, employment and efficient income distribution, which invariably help in improving the living standards of the population. In other words, the CBN, through financial intermediation,…

Interview

Removing barriers: OBG talks to Godwin Emefiele, Governor, Central Bank of Nigeria (CBN)
OBG
plus

Interview:Godwin Emefiele What can the CBN do to help encourage private sector lending and financial intermediation? GODWIN EMEFIELE: An important mandate of the CBN is the promotion of a sound financial system in Nigeria. Therefore, we recognise that efficient financial intermediation contributes to high levels of output, employment and efficient income distribution, which invariably help in improving the living standards of the population. In other words, the CBN, through financial intermediation,…

Analysis

Bridging the gap: State efforts focus on encouraging banks to diversify lending
OBG
plus

Both the government and the Central Bank of Nigeria (CBN) have identified increased private sector lending as a priority, which has been made all the more urgent by a pressing need to stimulate the economy. As a result, the CBN has employed its monetary and regulatory tools to increase liquidity in the system and shore up banks’ balance sheets in the hope that lenders will increase lending in the real economy, especially outside of the oil and gas sector. Monetary Policy In an effort to inject…

Analysis

Bridging the gap: State efforts focus on encouraging banks to diversify lending
OBG
plus

Both the government and the Central Bank of Nigeria (CBN) have identified increased private sector lending as a priority, which has been made all the more urgent by a pressing need to stimulate the economy. As a result, the CBN has employed its monetary and regulatory tools to increase liquidity in the system and shore up banks’ balance sheets in the hope that lenders will increase lending in the real economy, especially outside of the oil and gas sector. Monetary Policy In an effort to inject…

Analysis

Flexible money management: Uptake in mobile and internet banking boosts penetration
OBG
plus

In January 2012 the Central Bank of Nigeria (CBN) launched the first phase of its “cashless” policy, which aims to reduce the volume of cash transactions and in turn cut the cost of banking services. Since then, the move towards electronic payments has spurred the growth of numerous electronic payment and commerce initiatives. The cashless strategy is part of the state’s Vision 20:2020, which seeks to make Nigeria one of the world’s top 20 economies. Mobile Payments While mobile phone…

Analysis

Flexible money management: Uptake in mobile and internet banking boosts penetration
OBG
plus

In January 2012 the Central Bank of Nigeria (CBN) launched the first phase of its “cashless” policy, which aims to reduce the volume of cash transactions and in turn cut the cost of banking services. Since then, the move towards electronic payments has spurred the growth of numerous electronic payment and commerce initiatives. The cashless strategy is part of the state’s Vision 20:2020, which seeks to make Nigeria one of the world’s top 20 economies. Mobile Payments While mobile phone…

Overview

Mitigating risk: OBG talks to Peter Amangbo, Group Managing Director, Zenith Bank; Uzoma Dozie, Managing Director, Diamond Bank; Herbert Wigwe, Group Managing Director, Access Bank; and Adesola Adeduntan, Managing Director and CEO, First Bank
OBG
plus

Interview:Peter Amangbo, Uzoma Dozie, Herbert Wigwe, Adesola Adeduntan Does the macroeconomic climate present a risk of higher non-performing loans? PETER AMANGBO: The challenging macroeconomic climate presents a medium level of risk in terms of higher levels of non-performing loans. It is important to note this is not the first time Nigeria’s economy has gone through a difficult spell, and the banking industry must prepare adequately to manage this risk. A major threat to the economy is…

Analysis

Data crunchers: Opportunities remain to expand the reach of credit bureaus
OBG
plus

A domestic margin lending crisis in 2008 and 2009 led to a significant shake-up of Nigeria’s banking sector. In the wake of the period, banking executives were charged with mismanagement, lenders were nationalised and the industry as a whole was in need of support. This was evident in a myriad of ways, but one of the most visible was the proliferation of non-performing loans (NPLs), which had risen to 28% of total loans outstanding by December 2009. The high rate of bad debt led to the establishment…