Large Nigerian banks have weathered a storm

THE COLLAPSE of the oil price that began in 2014 was bad news for Nigerian banks. A quarter of their lending was to oil and gas firms. Many businesses were left reeling after a currency crisis. The economy stuttered, then plunged into recession. Before the oil slump just 3% of loans were not being paid back. By 2017 some 15% had gone sour.

The oil shock underscored an old truth: in choppy waters, it helps to be a big ship. The country’s large banks made tidy profits and now sit on sufficient capital. But smaller ones look shaky, even as currency problems have eased and the economy has recovered. Last year the central bank revoked the licence of Skye Bank, a struggling midsized lender.

Diamond, another middling bank, was on the rocks before being taken over by Access, a bigger rival. The combined bank began operations this month, becoming Nigeria’s largest bank by assets (see chart). It now boasts more customers than any other in Africa.

Large banks were able to find ways to make money...



via The Economist: Finance and economics Business Feeds

0 nhận xét:

Post a Comment