Nigerian Banks’ Profits to Drop in 2015, Says Fitch

Rating agency Fitch, in its latest reports say 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.

Fitch said in the report published today in London, that the moves led to weaker profitability and stemmed credit growth in the first half of 2014, adding that it is likely to continue into 2015.

It would be recall that the Central Bank of Nigeria has increased cash reserve requirements on public sector deposits to 75 percent from 12 percent since July last year to curb inflation and limited how much banks can charge account holders when they withdraw money.

The Asset Management Corp. of Nigeria, a state company created to buy bad debt from lenders after the country’s 2009 financial crisis, also last year raised its annual levy on banks from to 0.5 percent of their assets from 0.3 percent.