Banking
GTBank Foresees Banks Struggling With 15% CAR
**Expects Tighter System Liquidity, Rise in Interest Rates in 2021
By Dipo Olowookere
One of the leading financial institutions in the country, Guaranty Trust Bank (GTBank) Plc, is projecting a further increase in interest rates.
In its Nigeria Macro Economic and Banking Sector Outlook for 2021 obtained by Business Post, the lender said the spike in the interest rates would be triggered by “the additional borrowings by the government as well as relatively lower OMO maturities into the system.”
GTBank disclosed in the report that it also foresees the Central Bank of Nigeria (CBN) sustaining its “policy stance going into 2021 driven largely by the need to improve credit flow to spur economic growth.”
Recall that recently, in a move to attract portfolio flows and reduce the consistent exit of investors, the CBN increased yields of fixed income securities, causing investors to abandon the equity market, which has so far lost 4.03 per cent this year.
Liquidity expectation
Commenting on the liquidity outlook for the year, GTBank said it expects it to be tighter, noting that, “For one, only N4.3 trillion in OMO securities will be maturing this year, with over 50 per cent of that maturing within the first quarter of the year which implies about N2.5 trillion of liquidity injection into the system in Q1, with attendant CRR implications assuming that the CBN maintains its trend of reissuing a portion of the maturing securities.”
The lender noted that, “This could result in the outflow of more funds from the market in form of CRR,” adding that from Q2 2021, however, “we expect a shift in the liquidity situation of the market, based on the significantly reduced OMO maturities of N1.7 trillion.”
According to the bank, “In the absence of other liquidity injection sources, market liquidity is expected to tighten significantly with a resultant decline in special CRR debits.”
“As a result of the tightening of liquidity conditions expected in the market from Q2 2021, we anticipate a rise in volatilities within the money market and fixed income space.
“We also anticipate a renewed scramble for deposits by banks and other financial institutions to meet demands on them for funds.
“Money market rates, should on average, rise steadily across the period with a resultant pull on deposit and lending rates.
“In view of the above, the CBN might have to consider the possibility of releasing some of the CRR sterilised by it,” the report further said.
Banking sector capitalisation
In terms of the capitalisation of the banking sector, GTBank said it foresees some players struggling with the regulatory minimum capital adequacy ratio (CAR) of 15 per cent as a result of the devaluation of Naira.
“Consequently, we expect banks with shortfalls in their capital positions to retain more of [their] earnings to shore up their capital and keep themselves within touching distance of the minimum regulatory capital requirement.
“It is also not unlikely that the apex bank will offer some form of regulatory forbearance to banks that fall short of the minimum regulatory capital,” the report noted.
Over a decade ago, the banking sector in Nigeria went through a major transformation, with mergers and acquisitions to meet up with the minimum capital base of N25 billion. Some observers have called for a revisit of this amount because of the devaluation of the local currency since then.
Banks and Fintech competition
GTBank said in its report that it projects a level playing field for traditional banks and their non-bank competitors, which are mainly the financial technology (fintech) companies.
It explained this is expected because the CBN, with an expanded role in the new Banking and Other Financial Institutions Act (BOFIA) 2020, would likely increase the operational and regulatory costs of fintechs, which would stifle their drive in the long to medium term.
FX Outlook
In the report, the lender projected a tightening of the gap between the parallel market rate and the official rate due to a marginal adjustment of the currency in 2021.
“Our expectation of the appreciation of parallel market rates is predicated on increased supply to that market, however, it should be noted that a devaluation in the official market usually triggers an immediate devaluation in the parallel market even if short-lived.
“Notably, a further devaluation to levels closer to the general consensus of the true value of the Naira is expected to trigger increased foreign portfolio flows into the country,” it stated.
By Dipo Olowookere
Shareholders of Wema Bank Plc will receive a dividend of N1.25 for the 2025 financial year if approved at the next Annual General Meeting (AGM).
The board proposed the cash reward to investors after achieving record-breaking growth and unparalleled performance across several key metrics in the year under review.
Details of the FY 2025 audited financial results of the lender showed that pre-tax profit went up by 116.4 per cent to N221.9 billion from N102.5 billion, while net profit soared by 125.4 per cent to N194.5 billion from N86.2 billion in 2024.
Last year, the financial institution grew its gross earnings by 52.8 per cent to N660.6 billion from N432.3 billion in the preceding year, driven largely by a 62.7 per cent growth in interest income, reflecting improved yields on earning assets and growth in the loan book.
As for its balance sheet, it was observed that total assets chalked up 41.5 per cent to N5.07 trillion from N3.59 trillion, and customer deposits grew by 30.3 per cent to N3.29 trillion from N2.52 trillion, demonstrating sustained customer confidence.
This growth in deposits provided stable funding for asset growth while supporting liquidity and balance sheet resilience. Net interest income more than doubled, rising by 103.9 per cent to N361.0 billion, supported by improved asset pricing and balance sheet expansion. Non-interest income also grew modestly by 8.3 per cent to N85.3 billion. Net loans and advances increased by 44.7 per cent to N1.74 trillion, up from N1.20 trillion in FY 2024, thus reflecting Wema Bank’s continued support for key sectors of the economy while maintaining a disciplined risk management approach.
“Wema Bank has delivered one of the strongest growth trajectories in its history. From a PBT of N14.75 billion three years ago, we grew to N43.59 billion in 2023 and reached N102 billion in 2024. In 2025, we have taken an even bolder step forward, recording a PBT of N221 billion,” the chief executive of Wema Bank, Mr Moruf Oseni, commented.
“As of September 2025, Wema Bank successfully surpassed the N200 billion recapitalisation minimum threshold for commercial banks with national authorisation.
“Our FY2025 Financial Results only corroborate what has become abundantly clear—Wema Bank is here not just to stay, but to lead the future of banking in Africa,” he added.
By Adedapo Adesanya
The Central Bank of Nigeria (CBN) is considering the recapitalisation and restructuring of Development Finance Institutions (DFIs) to address the significant financing gap facing micro, small, and medium-sized enterprises (MSMEs).
The Deputy Governor of the apex bank in charge of Economic Policy, Mr Muhammad Abdullahi, disclosed this during a panel session at the launch of the Nigeria Development Update by the World Bank in Abuja on Tuesday.
He explained that a recent review by the apex bank found that existing DFIs were too small to meet the credit needs of businesses.
DFIs are specialised, government-backed financial entities designed to promote economic growth by funding critical sectors like agriculture, infrastructure, and SMEs. Key institutions include the Bank of Industry (BOI), Development Bank of Nigeria (DBN), Nigeria Export Import Bank (NEXIM Bank), Bank of Agriculture (BOA), National Credit Guarantee Company Limited, and Nigerian Consumer Credit Corporation, among others.
“We conducted a review last year of the development finance space. Across all the DFIs in Nigeria, the total asset base is slightly above N8 trillion, whereas what is required in development finance for MSMEs is over N130 trillion,” he said.
He said that simply injecting capital would not solve the problem.
“The only way to address this is not only through public sector capital injections into these institutions, but also by making them bankable and investable,” he said.
Abdullahi said the CBN and the Ministry of Finance are reviewing DFI structures to improve their efficiency and risk appetite.
“We are reviewing the entire sector to ensure that we can correct the incentives, improve risk appetite, and also strengthen capital levels,” the deputy governor added.
He also said the reforms aim to introduce stronger market-based principles.
“We are looking at the structure to see how more market fundamentals can be incorporated, because the way it has been done in the past has not delivered the desired results,” Mr Abdullahi said.
On the persistent financing challenge for MSMEs, he said lending to the real sector has always been one of the structural challenges “Nigeria’s economy faces in terms of ensuring that credit reaches businesses that require it”.
Business Post reports that the CBN recently concluded the recapitalisation of the Nigerian banking sector, while the insurance sector is ongoing.
By Modupe Gbadeyanka
The women-focused initiative by Sterling Bank, OneWoman, is already yielding positive results, especially in promoting financial inclusion and empowering female-led enterprises in Nigeria.
Business Post reports that the programme was created to support women through three key pillars of capital, capacity, and community.
In 2025, according to the Head of the OneWoman Initiative, Ms Ezinne Nwokafor, the initiative gave out N43.9 billion loans to 2,450 female entrepreneurs, trained 6,000 of them, served about 380,000 women across three sectors of career women, women in business and freshers, and their vision 2030 is to give out N500 billion loans to one million women across their three sectors.
She noted that a significant majority of Nigerian women remain excluded from formal credit, with only a small percentage able to access structured financing. Despite improvements in financial inclusion, women continue to face systemic barriers that limit their ability to secure funding.
Ms Nwokafor pointed out that women account for a substantial share of micro, small, and medium enterprises and contribute meaningfully to the economy, yet face a financing gap estimated at $42 billion annually, according to the International Finance Corporation.
She also referenced data showing that more than half of women-led businesses identify access to finance as a major constraint, while rejection rates for loan applications remain significantly higher for women than for men.
According to her, these challenges are often linked to structural issues such as gaps in asset ownership, social norms, and limited access to financial data and visibility.
“Sterling’s OneWoman initiative is positioned to bridge this gap by combining financial solutions, mentorship, capacity building, and community support for women across different stages of their journey,” she said at the Funding Her Future Breakfast Dialogue in Lagos.
The session brought together voices from across sectors for a focused and necessary conversation on how to unlock more inclusive and effective financing pathways for women-led businesses in Nigeria.
On his part, the chief executive of Sterling Bank, Mr Abubakar Suleiman, said, “Women-led businesses need the right support systems, the right networks, and the right ecosystem to grow with confidence and scale with resilience.”
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