Banking Industry in Nigeria
THE BANKING INDUSTRY AND THE NIGERIAN ECONOMY POST-CONSOLIDATION
By B. B. EBONG GROUP MANAGING DIRECTOR/CHIEF EXECUTIVE UNION BANK OF NIGERIA PLC ABSTRACT Against the backdrop of the role of banks as financial intermediaries and their function as the engine of growth of the economy, this paper examines the extent to which the banking industry has helped to stimulate economic activities in Nigeria and what the prognosis looks like in the post-consolidation era. The paper notes that the banking industry in Nigeria witnessed a remarkable growth in terms of deposit base, number of branches, total asset and volume of loans and advances, especially since the de-regulation of the financial services sector in the last quarter of 1986. However, given the potentials of the market, banks need to do more, particularly in financing the real sector of the economy. It is argued that the consolidation programme is expected to have a positive effect on employment in the long-run, and that has drastically altered and redefined the nature of competition in the banking industry. Furthermore, it argues that mere size would no longer be a critical factor in the customers’ choice of which bank to patronize. Rather, emphasis would shift to the ability to deliver superior value to customers.
THE BANKING INDUSTRY AND THE NIGERIAN ECONOMY POST-CONSOLIDATION
By
DR. B. B. EBONG GROUP MANAGING DIRECTOR/CHIEF EXECUTIVE UNION BANK OF NIGERIA PLC
1.0
INTRODUCTION Banks facilitate economic growth in a variety of ways. In the first instance, they act as financial intermediaries between the surplus generating units and the deficit spending ones. This is a two-fold function involving the mobilisation of savings from the former group which are then channelled to the latter to support productive economic activities. This intermediary role is important in two respects. First, by pooling together savings that would have otherwise been fragmented, banks are able to achieve economies of scale with
By B. B. EBONG GROUP MANAGING DIRECTOR/CHIEF EXECUTIVE UNION BANK OF NIGERIA PLC ABSTRACT Against the backdrop of the role of banks as financial intermediaries and their function as the engine of growth of the economy, this paper examines the extent to which the banking industry has helped to stimulate economic activities in Nigeria and what the prognosis looks like in the post-consolidation era. The paper notes that the banking industry in Nigeria witnessed a remarkable growth in terms of deposit base, number of branches, total asset and volume of loans and advances, especially since the de-regulation of the financial services sector in the last quarter of 1986. However, given the potentials of the market, banks need to do more, particularly in financing the real sector of the economy. It is argued that the consolidation programme is expected to have a positive effect on employment in the long-run, and that has drastically altered and redefined the nature of competition in the banking industry. Furthermore, it argues that mere size would no longer be a critical factor in the customers’ choice of which bank to patronize. Rather, emphasis would shift to the ability to deliver superior value to customers.
THE BANKING INDUSTRY AND THE NIGERIAN ECONOMY POST-CONSOLIDATION
By
DR. B. B. EBONG GROUP MANAGING DIRECTOR/CHIEF EXECUTIVE UNION BANK OF NIGERIA PLC
1.0
INTRODUCTION Banks facilitate economic growth in a variety of ways. In the first instance, they act as financial intermediaries between the surplus generating units and the deficit spending ones. This is a two-fold function involving the mobilisation of savings from the former group which are then channelled to the latter to support productive economic activities. This intermediary role is important in two respects. First, by pooling together savings that would have otherwise been fragmented, banks are able to achieve economies of scale with
Bibliography: Central Bank of Nigeria, Annual Report and Statement of Accounts, (various issues.) Nigeria Deposit Insurance Corporation, Annual Report and Accounts, (various issued) Statement of Mckinnon, R. I. (1973), Money and Capital in Economic Development Washington, D.C.: The Brookings Institution. Oboh, G. A. T. (2005), Selected Essays On Contemporary Issues In The Nigerian Banking System. Ibadan: University Press Plc.