Nigerian banks’ profits to fall in 2015 – Fitch

Measures to protect the economy by the apex bank, Central Bank of Nigeria CBN, will make the profits of Deposit Money Banks in the country for next year to drop, according to a latest release by Fitch Ratings, a global rating agency.
While recalling that some of the regulatory headwinds had led to weaker profitability and “stemmed credit growth” in the first half of 2014, the rating agency said Nigerian banks’ assets growth and earnings would experience further fall over the next 18 months.
Fitch, however, observed that the nation’s banks were performing well despite the twin hurdles of tight monetary policy actions and new banking rules.
The Director, European Middle East and Africa Financial Institutions’ team, Fitch, Mr. Mahin Dissanayake, said, “This is mostly supported by continuing robust economic growth. Nevertheless, we expect bank performance and growth to moderate over the next 18 months due to the Central Bank of Nigeria’s actions aimed at protecting the economy and the banking system.
“The CBN’s stance also shifted towards protecting the consumer through its revised rules on banking charges introduced in 2013. All these move, however, led to weaker profitability and stemmed credit growth in H114 – a trend that is likely to continue into 2015.”