The document provides an overview of Nigeria's banking industry, including its history, major players, products/services offered, and growth drivers. It analyzes the industry's strengths, weaknesses, opportunities, and threats. Some key points are: - The industry has experienced consolidation and now includes commercial banks, merchant banks, microfinance banks, and more. Major players include FirstBank, Zenith, UBA, and GTBank. - Products and services include deposits, loans, trade finance, portfolio management, and more. Competition is high among rivals while buyers have significant bargaining power. - Growth is driven by factors like expanding lending scope and customer trust, but high costs and economic instability pose threats.

1. NIGERIA’S
BANKING
INDUSTRY
Abii-Ndoh, Godwin Tunmise

2. CONTENTS
Industry Outlook
SWOT Analysis
Growth Drivers and Influencing Factors
Player Positions
Porter’s Five Forces
Products and Services
Economic Features
Industry Overview

3. INDUSTRY OVERVIEW
Commercial
Banks
Merchant
Banks
Micro-finance
Banks
Non-interest
Bank
Primary
Mortgage Banks
The African Banking Corporation and
First Bank of Nigeria(which was
formerly known as the Bank of British
West Africa (BBWA) were established.
Between 1892 and 1894
The indigenous
banking boom of
the 1930's and
1940's
The first banking
ordinance in
1952
Lyones
Commission and
Central Bank
introduced in
1959
First era of
consolidation between
1959-1969 as a result
of bank failures owing
to illiquidity.
Currently, there are:

4. ECONOMIC FEATURES
45%
55%
Nigerian Population with Bank
Accounts
Banked
Population
Non-banked
Population
-
5.00
10.00
15.00
20.00
25.00
2010 2011 2012 2013 2014
Trillions
Commercial Bank Deposits (NGN)
Demand Deposits Time and Savings Deposits
Foreign Currency Deposits Government Deposits
Commercial banks own N27.5trn in total assets,
and N22.3trn in total deposits as at 31st Dec, 2014
EPPAN estimates that only 76 million Nigerians have
bank accounts
0%
10%
20%
30%
40%
50%
60%
70%
2010 2011 2012 2013 2014
Key Financial Ratios
Loans to Deposits Ratio Liquidity Ratio
Zenith Bank and GTBank’s post tax profits grew 4.3%
and 10% respectively at the end of 2014 to
N99.45bn and N98.69bn, from N95.31bn and
N90.02bn in 2013

5. Others
Portfolio
Management
Tenored Deposits
FX Forward
Contracts
PRODUCTS AND SERVICES
International Trade
Finance
Visible Transactions
Letters of Credit
Form M
Custom Duties
Collection
Invisible
Transactions
Bills for Collection
Confirmed and
Unconfirmed LC
Shipping Documents
Endorsements
Short and Long
Term Finance
Overdraft
Time/Term Loans
Bankers
Acceptances
Loans, Bonds and
Guarantees
Leases

6. PORTER’S FIVE FORCES
Rivalry among Competitors
High number of players, low
switching costs, undifferentiated
services
Bargaining Power of Buyers
Large number of players, low
switching costs, undifferentiated
services, full information about the
market
Threat of New Entrants
Regulation, distribution
considerations, market growth, brand
identity
Threat of Substitutes
Very high, new substitutes
include credit unions and
investment houses
Bargaining Power of
Suppliers
Few alternatives, CBN rules
and regulations, suppliers
are not concentrated,
forward integration

7. PLAYER POSITIONS (2014)
Bank Earnings Total
Assets
Customer
Deposits
Profits
before Tax
ROA MRK Share
(Assets)
MRK Share
(deposits)
FirstBank N410.6bn N4,131.6bn N2,989.7bn N94.4bn 2.05% 15% 13.5%
Zenith N403.3bn N3,755.2bn N2,537.3bn N119.7 2.74% 13.9% 11.2%
UBA N290bn N2,762.5bn N2,169.6bn N56.2bn 1.64% 10.2% 9.9%
GTBank N278.5bn N2,335.8bn N1,618.2bn N116.4bn 4.2% 8.4% 7.2%
Access N245.1bn N2,104.3bn N1,454.4bn N52bn 2% 7.6% 6.7%
Tier 1 Banks
Bank Earnings Total
Assets
Customer
Deposits
Profits
before Tax
ROA MRK Share
(Assets)
MRK Share
(deposits)
Diamond N208.4bn N1,933.1bn N1,493.1bn N28.1bn 1.3% 6.9% 6.7%
Ecobank N221.3bn N1,772.9bn N1,251bn N28.7bn 1.4% 6.5% 5.8%
Skye N136.7bn N1,421.1bn N952.3bn N10.4bn 1% 5.1% 4%
Fidelity N132.4bn N1,187bn N820bn N15.5bn 1.2% 4.4% 3.6%
FCMB N148.6bn N1,169.4bn N733.8bn N23.9bn 1.9% 4% 3.1%
Tier 2 Banks

8. PLAYER POSITIONS (2014)
0
2000
4000
6000
8000
10000
12000
14000
16000
Earnings Total Assets Customer Deposits
Tier 1 vs Tier 2 Commercial Banks
(Nbillion)
Tier 1 banks Tier 2 Banks (Top 5)
Market Share (Deposits)
Tier 1 banks
Tier 2 Banks (Top 5)
Others
Market Share (Assets)
Tier 1 banks
Tier 2 Banks (Top 5)
Others
The total Industry Herfindahl-
Hirschman Index (HHI) at the end
of 2014 was estimated to be 786.66
and 750.91 for assets and deposits
respectively. This points to a fairly
competitive industry.

9. GROWTH DRIVERS AND INFLUENCING FACTORS
Widening Bank’s Lending Scope
Increased Customer Trust
Weak Financial Infrastructure
Sound Ethical Banking Practices
High Operating Costs
Legal Reforms and Improved Regulatory Framework
Security
Bank Consolidation
Stable Macroeconomic Environment
Robust Economic Growth
Effective Regulation and Supervision
Efficient Risk Management Practices
Technological Advancement
Influencing
Factors
Growth
Drivers

10. SWOT ANALYSIS
Weaknesses
Inadequate deposit mobilisation efforts, high
level of non-performing assets, high level of
financial exclusion, inadequate risk management
practices, weak corporate governance, poor and
inadequate infrastructure, poor attitudes of
employees
Strengths
Improved regulatory guidance, growth is relatively high
when compared to other emerging markets especially in
Africa, increased access to mobile banking, growing
levels of confidence in the industry, healthy competition
among banks
Threats
Threat of instability of the financial
system, liquidity problems (TSA),
bank failure, exchange rate
volatility, interest rate risks
Opportunities
Globalisation and access to foreign
financial markets, low levels of financial
inclusion means more markets to tap
from, increased access to and use of new
technologies

11. INDUSTRY OUTLOOK
Nigeria’s capital importation has reduced year on year from $2.67159bn to $2.66636bn
in 2015’s Q2 and is likely to continue to do so given the economy’s troubles. This is
poised to continue to adversely affect the economy’s banking industry
Nigerian banks’ strong dependence on the domestic economy may
prove detrimental given the economy’s recent sluggish state
Tier 1 capital ratios could fall below 15 per cent for banks
at the end of 2015
Though already falling, regulatory capital adequacy ratios
are likely to fall further due to lower earnings, weaker
asset quality and a limited ability to raise capital.
Fitch estimates that the industry’s non-performing loans
will rise above the central bank informal cap of 5% but
below 10% of total sector loans by the end of2015

12. THANK YOU!