2020 Banking Industry Report

Overview of the Agusto & Co 2020 Banking Report

Agusto & Co.’s 2020 Banking Industry Report is the most current and comprehensive report on the banking industry in Nigeria. The report provides an overview of the banking industry’s architecture and in-depth analysis of its asset quality, earnings, capitalisation and liability generation. Our assessment of the Industry’s financial condition is based on figures and information published in the approved annual reports of nineteen commercial banks and five merchant banks as at 31 December 2019. These banks collectively accounted for an estimated 98% of the Industry’s total assets as at the same date and provide a good representation of the Industry.

In the last four years, following the 2015/2016 recession, the Nigerian banking industry has written off a minimum of ₦1.9 trillion of impaired loans from its loan portfolio. This volume of write offs has been driven by the weak macroeconomic climate and the introduction of the IFRS 9 accounting standard in 2019. In the wake of the unprecedented COVID 19 pandemic, the Industry’s asset quality is further threatened given significant exposures to vulnerable sectors. The Central Bank of Nigeria (CBN) has granted palliatives to banks in form of permitted loan restructurings to certain sectors that have been severely affected by the pandemic and we expect this to moderate the anticipated level of asset quality deterioration in the short term.

Our report provides a detailed analysis on the expected impact of the COVID-19 pandemic on the Industry’s asset quality, earnings and capitalisation in the short term. In addition, we have included recent trends and developments, highlighting measures adopted by banks to cope with macroeconomic and regulatory challenges. Also included in the report is an overview of the electronic payment systems embraced by the Industry and an analysis of the market share of some electronic banking platforms by banks. Our report provides five years financial data on the Industry (2017-2021f).

Agusto & Co’s 2020 Banking Industry Report answers questions such as:

  • What is the size of the banking industry in Nigeria?
  • How is the banking Industry faring with the novel COVID-19 pandemic?
  • How have regulatory policies impacted the Industry’s performance in the last 12 months and what are the implications for banks going forward?
  • What opportunities are available to banks to increase market share?
  • What is the overall outlook for the Industry in the near term?
  • Provides an overview of the Nigerian business environment and how it affects the Industry’s performance
  • Provides an assessment of the changing dynamics in the Industry’s payment systems and overall digitalisation drive
  • Ranks each bank across key parameters on asset quality, profitability, capitalisation and liquidity
  • Tracks key regulations, Industry trends and opportunities
  • Provides five years financial information on the Industry (2017-2021f)