The table below comes from the financials of Zenith Bank which has just released its HALF Year 2015 results.What struck us as odd at Nairametrics was the narrow geographic concentration of Zenith Banks loan book.
Fig 1: Zenith Bank geographic spread of loans
Basically of the N1.796 trillion of loans and advances to Nigerian customers by Zenith Bank for the period, N1.764 trillion or 98.2 percent of the total were extended to businesses and individuals in the South West of the country, which is dominated by Lagos the commercial capital.
Zenith Bank even extended more loans to customers in the rest of Africa region of its operations (N66.9 billion), and outside Africa (N77.7 billion), than in the 5 other geographic regions that make up Nigeria combined.
Apart from the risk that this level of extreme concentration exposes the bank to, it would be nice to also see the geographic concentration of deposits into the bank, which was not provided.
We believe that Nigerians in other regions (SS, SE,NE,NC and NW), who may be contributing a significant amount of Zenith Banks deposits may not take too kindly to not having an opportunity to access loans from the bank, simply as a result of where they reside.
Easily guessable that it would be the South West, because of Lagos, but the difference between loans from the South West region, and the others is quite wide. It shows just how much commercial activity is centred in Lagos, yet we still wonder why so much traffic jams. This is an indirect precursor!