While the world has grappled with a once-in-a-lifetime health crisis, the Nigerian banking sector has remained resilient.
The pandemic stumped investors who were wary about the impact of piling loan loss expense on the profit, and perhaps more worrisome was that a harsh regulatory environment could pressure lenders’ source of revenue, interest income.
In the face of these uncertainties, we have decided to rank operators in the industry by total assets as the regulator is paying attention to the capital bases of lenders and their ability to weather the storm since they operate in an unpredictable and tough macroeconomic environment.
Notable, Access Bank Nigeria Plc has emerged as the largest lender by asset. Its total assets stood at N9.05 trillion as at March 2021.
That compares with Zenith, (N8.68 trillion); United Bank for Africa or “UBA”;(N7.89 trillion); FirstBank Holdings (N7.83 trillion); Guaranty Trust Bank or “GTBank”; (N5 trillion); Fidelity Bank, (N2.89 trillion0); Stanbic IBTC Holdings, (N2.56 trillion); Union Bank, (N2.15 trillion), and First City Monument Bank or FCMB Group, (N2.14 trillion).
Access Bank has seen steady growth in earnings and deposit base since it acquired beleaguered Diamond Bank a few years ago in a deal that was crystal clear a success.
Despite the difficult business environment, it recorded the fastest net income expansion among the big five players in the industry; what’s more, it is on the verge of displacing Zenith Bank as the largest lender by profit.
Data gathered by MoneyCentral shows the ten largest banks collectively grew total assets by 15.13 percent as at March 2021, from 2020’s N36.24 trillion.
According to recent data from the Central Bank of Nigeria (CBN), total credit from the sector to the economy rose 15.26 per cent in the same period of April 2020 and April 2021.
The regulator attributed the uptick in credit to the economy to its loan to deposit ratio policy it implemented in 2019 as it deemed it fit to spur small and medium scale businesses who are pivotal to economic growth.
Interestingly, gross banking sector credit increased by N0.85 trillion from N22.68 trillion at the end of December 2020 to N23.53 trillion at the end of March 2021, according to data from the Apex bank.
While the tough regulatory environment inadvertently created by the central through its dovish stance is an existential threat to future profitability, asset quality has improved on the back of gradual reopening of the economy which shrank band loans.