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Banking

Nigerian banks: Zenith – carefully does it

Zenith CEO Godwin Emefiele
Zenith CEO Godwin Emefiele

Zenith is the biggest of the generation of Nigerian banks set up after 1990. By assets and market capitalization, it has risen to the second-biggest listed bank in the country – if largely thanks to the demise of Oceanic Bank and the recent sluggishness of UBA. Others attribute Zenith’s position partly to building branches in business districts, then deploying funds in liquid assets and loans to the safer local corporations. Indeed, in the next five years, CEO Godwin Emefiele says growing retail deposit share will remain a focus.

Even today, Zenith has a high proportion of deposits from retail: about 60%, compared with around 50% at GT Bank, perhaps Zenith’s closest rival in terms of age and size. Within five years, Emefiele wants that proportion to rise to between 70% and 75%, partly by employing mobile and point-of-sale channels.

Conversely, Zenith’s proportion of loans in retail is only about 10%, while GTB’s retail book is proportionally much bigger, meaning Zenith’s net interest margin trails. "Consumer credit carries a lot of risk in Nigeria as the credit data on the population is not yet widespread," says Emefiele.

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