2021 Banking Industry Report

Agusto & Co.’s 2021 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 an 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 twenty commercial banks and five merchant banks as at 31 December 2020.

The COVID-19 pandemic brought about an extraordinary test for the global community. Although the global COVID mortality rate stands low at about 2.2%, casualties increased from less than 3,000 in December 2019 to about 3.9 million as at 30 June 2021. Nigeria’s mortality rate stood comparably lower at about 1% as at the same date. However, the local economy had its fair share of pandemic-related adversities. However, leveraging lessons from the 2016/2017 economic recession, the Nigerian banking industry was better prepared in 2020. Proactive measures in the form of forbearance granted by the Central Bank of Nigeria (CBN) enabled banks to provide temporary and time-limited restructuring of facilities granted to households and businesses severely affected by COVID-19. There was a generally cautious approach to lending in the Industry, given the difficulties in the operating environment, resulting in negative real loan growth for the year, when the naira devaluation is considered. Underpinned by the forbearance and proactive measures adopted by banks, the NPL ratio declined during the year under review.

Our report provides a detailed analysis on the impact of the heterodox policies of the CBN and the COVID-19 pandemic on the Industry’s asset quality, earnings and capitalisation. 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. Agusto & Co.’s 2021 report captures the Nigerian business environment and the impact of recent trends on the banking industry. Our report provides five years’ financial data on the Industry (2017-2021f).

Agusto & Co’s 2021 Banking Industry Report answers questions such as:

  • What is the size and structure of the banking industry in Nigeria?
  • How have the heterodox policies of the CBN affected each bank in the Industry?
  • How have the 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 are the trends in the banking industry?
  • What is the overall outlook for the Industry in the near term?

Key benefits of the report include:

  • 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
  • Includes a comprehensive review of the Industry’s financial strength