MANAGING Director and Chief Executive of Afrinvest Nigeria, Ike Chioke has said Nigerian banks will have to become more agile and proactive in lending to the real sector if they are to survive the next decade.
Speaking at the launch of the Banking Sector Report and 20 years Anniversary dinner of Afrinvest, Chioke lamented that despite the huge contribution of the real sector to the country’s GDP, the percentage of banking sector credit to manufacturing, small businesses and the agric sector still remain in single digit.
Citing the BRICs countries as examples, he said no country grows with a low lending to the real sector. Chioke said lending in the BRICs countries is “much more diversified and do impact more on the real sector than what we have in Nigeria. Most of our lending is concentrated in the oil and gas sector.”
Presently, the oil and gas sector which contributes about 11 per cent to Nigeria’s GDP takes up more than 27 per cent of the credit given by Nigerian banks, while the power sector a new entrant, which contributes about 0.6 percent is taking about five percent of all credit.
Stating that “banks would have to more agile to make more money in the years ahead”, Chioke said “most Nigerian banks are taking more aggressive look at their cost structure and also adopting more strategies to take their customers online to cut costs.”
Adding that the fears of recession may be overblown, he said the reforms being undertaken by the government and an increased focus on infrastructure will allow bank to reposition their portfolio.
Accessing the banking sector, he said “we have not seen the level of non performing loans we saw between 2008 and 2009 as a result. Nigerian banks seem much more resilient and more prepared going forward in the years ahead.
“We are witnessing a cycle in the oil price environment that is very similar to what happened in 2008. And how are the banks holding up to those challenge from $100per barrel down to below $50 per barrel. What is remarkable is that the Nigerian banking sector has withstood that challenge very well much so than what happened in 2008- 2009.
“There has been very strong growth performance amongst the tier 1 and tier 2 banks. We have seen top line growth in high single digits, and we have seen bottom line growth in the double digit area. So all the banks seem to have done well not withstanding what should be a constrained economy.

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