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Nigeria Banking Sector Outlook for 2012 by GTBank

By GTBank on January 2, 2012

Nigeria Banking Sector Outlook for 2012

FG plans to spend N4.75Trillion in 2012 (up 6% from 2011)

FG budget premised on average daily production of 2.48mbpd and an average price of USD70/barrel.

Slight exchange rate devaluation expected.

CBN is expected to maintain monetary policy.

Proposed removal of subsidy may result in upward inflationary pressure.

Build up in foreign reserves expected with stable oil prices and successful removal of oil subsidy.

Strong GDP growth to be driven by:

Government initiatives promoting growth in the non-oil sector, especially Agriculture.
Government infrastructure policies especially on Power
Increased confidence and business opportunities following the resolution of the financial industry crises

Strong growth and positive banking sector outlook to be driven by:

Increased government spend on priority sectors e.g Power, Agriculture, Infrastructure, Security etc
Retail Market growth
Stronger and more robust financial sector offerings.

Increased competition and capacity among banks following AMCON resolution.

Current consolidation expected to give rise to larger banks with increased capacity.

Mobile money set to drive banking services for un-banked sector.

Cashless Lagos pilot test to enable banks prepare for full roll-out of CBN’s cashless society initiative.

Strong drive to deploy POS terminals and other e-banking initiatives.

Strong retail market growth driven by rising middle class.

Margins to remain strong despite tightening as it is that deposit rate will rise slower than lending rates.