Nigerian Banks’ Profits to Drop in 2015, Says FitchPaul Wallace
Nigerian banks’ asset growth and earnings will fall in the next 18 months because of the central bank’s moves to protect the economy and banking customers, Fitch Ratings Ltd. said in a report.
“All these moves led to weaker profitability and stemmed credit growth” in the first half of 2014, Fitch said in the report published today in London. This is likely to continue into 2015, it said.
The Central Bank of Nigeria has increased cash reserve requirements on public sector deposits to 75 percent from 12 percent since July last year to curb inflation and limited how much banks can charge account holders when they withdraw money. The Asset Management Corp. of Nigeria, a state company created to buy bad debt from lenders after the country’s 2009 financial crisis, also last year raised its annual levy on banks from to 0.5 percent of their assets from 0.3 percent.
“A lot more money could have been made if they had not increased the cash-reserve ratio,” Herbert Wigwe, the chief executive officer of Access Bank Plc, Nigeria’s fifth-largest lender said in an interview this week.