How Tier 1 banks can support $1trn economy – Report
Tier 1 banks have been urged to discover more creative ways of offering medium to long-term financing options to emerging growth sectors in a bid to actualise Nigeria’s US$1trn economy by 2030. This was the highlight of the latest Proshare’s Tier 1 Banks Report, titled “Getting Bigger, Braver, and Dominant – The Class of 2025”, […]
Tier 1 banks have been urged to discover more creative ways of offering medium to long-term financing options to emerging growth sectors in a bid to actualise Nigeria’s US$1trn economy by 2030.
This was the highlight of the latest Proshare’s Tier 1 Banks Report, titled “Getting Bigger, Braver, and Dominant – The Class of 2025”, which categorised the emerging growth sectors into 14 sub-economies.
According to the report, post recapitalisation would increase the capital base of banks to at least N2.85trillion in cumulative capitalisation, advising the Tier 1 banks to deconstruct Nigeria’s 46 sectors into what it described as 14 sub-economies.
“With increasingly larger equity bases and untroubled by liquidity and the cost of bank deposits, banks are expected to find more creative ways of offering medium- to long-term financing options to emerging growth sectors as they rebalance their lending portfolios.
“Proshare analysts believe that sub-economies that may benefit from the recapitalisation of banks include, but are not limited to, the Marine and Blue Economy, the Entertainment and Arts Economy, the Hospitality and Real Estate Economy, and the Mineral Mining and Energy Economies,” the report reads.
Commenting on the report, the Managing Editor, Proshare, Teslim Shitta-Bey said the report highlighted the assets size, opportunities, risks factors and the diversity of corporate boards of Tier 1 banks after recapitalisation.
He emphasised on the opportunities after recapitalisation, saying it would improve banks’ technological innovation and deepen their penetration into more African countries.
“Therefore, they’re going to have to find out how they’re going to use this money in a manner that enhances shareholder value as well as customer value. We expect to see an increase in technology applications. We expect to see more AI applications.
“We expect to see things like decentralised ledger technology taking place. We also expect to see situations where the banks, generally speaking, become more aggressive in growing outside the shores of Nigeria. In other words, we expect to see banks moving into greater territories in East and Central Africa, especially in areas of mining and manufacturing,” he said.