Business
New regulations may impact growth in Nigerian bank sector
New regulations in Nigeria that will reduce fee income and raise reserve requirements could curb growth in the financial sector.
Nigerian banks enjoyed a prosperous 2012, coming off a productive period of recovery that saw a wave a consolidation in the sector and the Asset Management Company of Nigeria (AMCON) soaking up N4.5 trillion (US$27.8 billionn) in toxic assets.
Banks in the Francophone region have remained stable due to the strict polices of the CFA franc zone.
The list of the top 200 African banks features 18 Nigerian banks, with US$130 billion in assets. Nigerian banks dominate the West Africa region and hold 62 percent of the assets in the top 200.
Nigeria’s banking sector is expected to see some strain as its neighbors continue along the path to prosperity and healthy competition.
A number of new regulations to strengthen the sector and make it more accessible to individuals and businesses are, according to ratings agency Fitch, “likely to constrain profitability over the next 18 months” and erase some of the gains made in recent years.
The Central Bank of Nigeria has mandated a phasing out of commission on turnover, a customer transaction fee, by 2016.
