According to Businessday Analysis, Nigerian Banks made a total profit of N243.6b for the first 6 months of 2012. The report indicates an 81.6% rise when compared to the same period last year. Unfortunately that is not all there is to the story. Whilst it makes sensational news to put up a headline like “Nigerian Banks make N243b” it also is imperative to mention that profits from 5 banks make up 76% of that profit. In fact GT Bank, First Bank and Zenith Bank make up 54% (more than half) of that figure. That is not now very great news when put in that context is it??
When 5 banks out of the 10 or so quoted banks make up 76% of an industry’s profit then there is cause for concern. It could mean that the remanning banks are being crowded out due to intense competition, which is a recipe for banking crisis and /or takeovers. It could also mean that any major misfortune on the top 5 banks may result in a massive meltdown of the whole financial system. It also means that the 5 banks below should now be considered as “too big to fail”. It also means the urgent need for providing finance for the real sector is dependent mostly on 5 banks. It could also mean a creation of a pseudo cartel as these banks may end influencing interest rates, deposit rates, financing decisions, asset allocation decisions, development of the sector, service standards etc.Too much powers in the hand of the very few.
Profit After Tax
GTB – N44.9B
FIRST BANK – N46.01B
ZENITH BANK – N40.64B
UBA – N27.2B
ACCESS BANK – N26.56B
RT @ugodre: WHY YOU SHOULD BE WORRIED, DESPITE NIGERIAN BANKS MAKING N243B PROFITS IN 6 MONTHS: According to Businessda… http://t.co/D …
WHY YOU SHOULD BE WORRIED, DESPITE NIGERIAN BANKS MAKING N243B PROFITS IN 6 MONTHS http://t.co/an60k90E
WHY YOU SHOULD BE WORRIED, DESPITE NIGERIAN BANKS MAKING N243B PROFITS IN 6 MONTHS http://t.co/78hA9XP6
WHY YOU SHOULD BE WORRIED, DESPITE NIGERIAN BANKS MAKING N243B PROFITS IN 6 MONTHS http://t.co/YDskITF7