As the Federal Government set in motion the plan to have a $1 trillion economy in the next five years, about 10 Nigerian banks who are gearing up for a recapitalisation exercise now have a combined assets of N140.3 trillion as at the first quarter of 2024....Read The Full Story Here ▶
This represents an increase of 22.5 per cent from what they closed at the end of 2023.
The lenders are Zenith Bank Plc, United Bank for Africa (UBA) Plc, Access Holdings Plc, FBN Holdings Plc, FCMB Group Plc, Stanbic IBTC Holdings Plc, Guaranty Trust Holding Company (GTCO) Plc, Fidelity Bank Plc, Sterlings Financial Holdings Company Plc and Wema Bank Plc.
According to their financial statements, their total assets grew to N140.3 trillion in Q1 from N114.5 trillion as of December 2023.
Recent data by Afrinvest Limited shows that banks’ total assets are only 16.4 percent of the country’s $0.5 trillion Gross Domestic Product (GDP), well below the level for banks operating in countries with similar GDP
Banks’ asset-to-GDP ratio in Egypt is 100 per cent, 74 percent in South Africa, and 47 percent in Kenya.
In Brazil, whose economy is worth $1.9 trillion, bank assets as a percentage of GDP is 125 percent. The figure is 45 percent in Mexico with a GDP of $1.5 trillion and 104.6 percent in the Netherlands with a GDP of $1 trillion.
The low asset base of Nigerian banks relative to peers makes a compelling case for a recapitalisation exercise, according to Ike Chioke, group managing director of Afrinvest West Africa Limited.
“We looked at all the commercial banks in Nigeria today and all the non-interest banks. We see that based on the CBN capital requirement, there’s a need for the Nigerian commercial banks to get to N3.7 trillion to bolster the N1.9 trillion they currently have,” he said.
“Clearly, we have quite a lot of work,” Chioke added.
Further findings from the statements revealed that Access tops the list with total assets of N32.6 trillion as of March 2024, followed by UBA with N25.3 trillion and Zenith Bank with N24.3 trillion.
During the reviewed period, the lenders’ liabilities rose 22.7 percent to N123.6 trillion from N103 trillion
A bank’s total assets represent the sum of everything it owns that has economic value. These assets are essential for the bank’s operations and revenue generation.
However, when total assets exceed total liabilities the result is a positive net equity or net worth.
In terms of growth rate in assets, GTCO recorded the highest increase of 35.4 percent followed by FBN Holdings with 27.2 percent and UBA at 22.8 percent.
