Nigeria: Unhappy banks

Speculation aside, Nigeria’s banks have not welcomed the private-sector CRR increase, which they believe could harm their profits and reduce their ability to lend. These include Diamond Bank, whose officials recently stated that they will need to obtain more customer deposits to maintain profits now that – per deposit value – they may be unable to make the same income.

Some banks have in recent weeks reported decreased 2013 earnings, but it should be noted that some analysts – including Exotix – view Nigeria’s banking sector as a sound place to invest compared to other sub-Saharan African banking sectors. They highlight Zenith, United Bank for Africa, and Access Bank as good buys.

Nevertheless, the Nigerian commercial banking sector has been reassured by the installation of a new chief executive for pan-African Ecobank Transnational Incorporated (ETI), which has around 40 per cent of its revenues and assets in Nigeria. That feeling should be reinforced by soothing comments from the new man, Albert Kobina Essien.

Essien emphasises that ETI will focus on consolidation and efficiency improvements rather than overly rapid expansion, and that it will be more vigilant regarding important markets like Nigeria.

For more news and expert analysis about Nigeria, please see Nigeria Focus and Nigeria Politics & Security.

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