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HomeBusinessNigerian banks see 22.5% surge in combined assets in Q1 2024

Nigerian banks see 22.5% surge in combined assets in Q1 2024

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In the first quarter of 2024, the combined assets of ten listed Nigerian banks experienced a significant growth of 22.5%, reaching N140.3 trillion, up from N114.5 trillion in December 2023.

This increase underscores the robust performance of these financial institutions amid the country’s economic landscape.

The banks in focus include 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, Sterling Financial Holdings Company Plc, and Wema Bank Plc.

Despite this growth, a report by Afrinvest Limited reveals that the asset base of Nigerian banks remains relatively low compared to their global counterparts.

Nigerian banks’ total assets are only 16.4% of the country’s $0.5 trillion Gross Domestic Product (GDP). This figure contrasts sharply with countries like Egypt (100%), South Africa (74%), and Kenya (47%).

Globally, the comparison is even more stark. For example, in Brazil, banks’ assets represent 125% of its $1.9 trillion GDP, while in Mexico, the figure stands at 45% of a $1.5 trillion GDP.

The Netherlands, with a GDP of $1 trillion, sees its banks’ assets at 104.6% of GDP.

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Group Managing Director of Afrinvest West Africa Limited, Ike Chioke highlighted the need for Nigerian banks to undergo a recapitalization exercise to enhance their financial stability.

“Based on the CBN capital requirement, there’s a need for Nigerian commercial banks to reach N3.7 trillion to bolster the N1.9 trillion they currently have,” Chioke said, emphasizing the substantial work required to achieve this target.

In the rankings of asset growth, Access Holdings Plc led 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 also rose by 22.7%, reaching N123.6 trillion from N103 trillion in December 2023.

A bank’s total assets represent everything it owns that has economic value, crucial for its operations and revenue generation. Positive net equity or net worth is achieved when total assets exceed total liabilities.

In terms of asset growth rate, GTCO recorded the highest increase at 35.4%, followed by FBN Holdings with 27.2%, and UBA at 22.8%.

This significant asset growth amidst a call for recapitalization highlights the dynamic nature of Nigeria’s banking sector and the ongoing efforts required to align with global standards.

(Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

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