Nigerian banking has changed almost unrecognizably over the past 10 years, and especially the past three. A decade ago, as a result of financial deregulation in the 1990s, there were more than 100 banks spread across the west African nation, often representing informal power bases, or ‘big men’.
Back then, brawls would break out in boardrooms – one story tells of a chairman using his honorific walking stick to break an uncooperative CEO’s jaw. Increased capital requirements in the mid-2000s led to a series of mergers, with more genuine banking business models often winning out.
Over the past three years, a massive clean-up after the 2009 margin-lending crash has weeded the sector still further of those banks that either never had any proper financial or governance controls, or that lost them during the mid-2000s boom years. From more than 100 banks, there are now 21.
Competition is still intense. It is probably too early to compare Nigeria’s big five to the stability and incumbency the biggest banks have enjoyed, say, in Turkey or South Africa. Yet Segun Agbaje, CEO of GT Bank, says Nigeria is moving to that model. He reckons just three banks now account for over half of sector profits.
