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Fitch predicts drop in profits for banks

By on October 10, 2014

European rating agency, Fitch Ratings, has predicted a drop in profits for Nigerian banks due to the Central Bank of Nigeria’s policies which are aimed at protecting the economy and the banking system.
Quoting  Fitch’s rating yesterday, Bloomberg stated: “Nigerian banks’ asset growth and earnings will fall in the next 18 months because of the central bank’s moves to protect the economy and banking customers. All these moves led to weaker profitability and stemmed credit growth in the first half of 2014.
The reported said that the trend was likely to continue into 2015.
The recent CBN increment of cash reserve requirements on public sector deposits to 75 per cent in an attempt to curb inflation rates and also its limitation on how much banks can charge account holders when they withdraw money played a major role in these decline.
Also speaking exclusively to THISDAY last week on the effect of tightened monetary policy, the Group Managing Director/Chief Executive Officer, First Bank of Nigeria Limited, Mr. Bisi Onasanya pointed out that actions taken to defend the naira had impacted directly on the growth of the real sector.
Also in an interview with Bloomberg, the Managing Director, Access Bank Mr. Herbert Wigwe said:  “A lot more money could have been made if they had not increased the cash-reserve ratio.”

 

[This Day]