The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Africa: Nigeria’s banks stare down the barrel

Inspired by the previous government’s agenda, Nigeria’s banks loaded up on loans to local oil and gas companies. The rapid decline in the price of oil has put many of the companies they lent to in distress. Can the banks cope with the potential fall-out?

Gun&Cartridges_600-New

First Bank of Nigeria’s modest head office is stationed at the marina in Lagos. Beyond the mid-morning traffic on the road in front of the building, past the shores of the marina, are two rather imposing oil rigs. 

When they first turned up, their presence confused locals. Oil rigs are usually stationed in oil producing regions in Nigeria, close to the Niger Delta, so why were they at the marina? Curious onlookers initially assumed that the rigs, which were owned by indigenous oil company SeaWolf Oilfield Services, were undergoing repairs and need not be in an oil producing region. But a closer look revealed that there was little, if any, maintenance work going on. 

Dolapo-Oni_160x186

 The truth is, Nigerian banks are hugely exposed to the oil and gas sector,” says Dolapo Oni, oil and gas analyst at Ecobank. “Despite central bank regulations limiting exposure by banks to 20% of their total loan book, some have already exceeded this

Dolapo Oni, Ecobank

It was only once local media dug a little deeper that they found out why the oil rigs were there.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree