Nigerian Banks dominate the West African market by size with Customer deposit of N14.192 trillion, industry loans of N12,33 6 trillion and industry revenue of N909 billion according to a report.
A breakdown of banks financial position show that First Bank of Nigeria limited (FBN) took the highest share 18 percent of the total customer deposit followed by Zenith Bank international plc with 17 percent, UBA 13, percent GTB 11 percent, Access Bank 10 percent, Ecobank 9 percent, tier II capital 11 percent, and Tier III capital 12 percent.
The banking industry report by FBN revealed that in terms of the total industry loan, FBN and Zenith share 18 percent each, followed by GTB 10 percent, UBA and Access bank occupy 8 percent each, Ecobank 7 percent, Tier II capital 29 percent and Tier III capital 9 percent.
Maintaining its position, FBN occupy the largest share of the industry revenue with 14 percent of the total, seconded by Zenith 12 percent, GTB 10 percent, Access bank 9 percent, Ecobank, 8 percent, Tier II capital 27 percent and Tier III capital 12 percent. According to Asian Banker, with over 11million customer accounts and nearly 700 business locations, First Bank is the largest Financial Services institution in Nigeria.
However, granular views of retail market growth suggest significant opportunities with Small and Medium Enterprise (SME), affluent and mass segments.
It is an established fact that Retail and SME businesses remain the focal point for the much desired economic development in Nigeria. Making a presentation at 2nd annual West Africa International Retail Banking Dialogue held recently in Lagos, UK Eke, executive director, South, FBN, looked at factors required to build stronger retail and SME sector and measures to enhance the risk management structure.
Represented by Rosemary Asiegbu, group head retail banking South, FBN, he said adequate funding is required to build stronger retail and SME sector.
According to him, informal financing options are quite inadequate to guarantee sustainable growth and going concerns of the business. But in terms of formal financing options, he said availability of funds to retail and SMEs are largely influenced by the nature of risks inherent in the business which is usually high risk, high return. “How many SMEs can sustain growth with high priced loans and with short pay back period?”
He noted there has been Government Interventions specifically, the Central Bank of Nigeria (CBN) regular intervention funds, CBN moral suasion on banks to set aside a proportion of their profits for SMEs loans and advances at lower interest rate, existence of Micro Finance Banks and refined focus of Development Banks on SMEs.
He listed out measures to enhance the risk management structure to include good corporate governance, strong capital base, regular stress test on the business model, and compliance with industry rules and regulations.
Other measures are to align business policies, procedures and processes with International best practices, and transparent and accurate financial reporting.
“If the owners of and other stakeholders in retail and SME businesses in the country could harness the issues put forward in this presentation to explore the opportunities in the domestic economy, there would certainly be improvement in the risk management structure of this business segment in Nigeria”, he said.
HOPE MOSES-ASHIKE
