Banking
Continued Hike in Interest Rates May Force Nigerian Banks into Expansion
By Adedapo Adesanya
Amid the continuous tightening of the interest rate benchmark by the Central Bank of Nigeria (CBN), there have been predictions that more Nigerian banks will have to pursue cross-border expansion.
The latest was put forward by Mr Johnson Chukwu, CEO of Cowry Asset Management, who noted that Nigeria’s continuous hawkish monetary policy would see more Nigerian local lenders find footing in other climes with favourable interest rates.
He made this disclosure at a recent Cowry Asset Management virtual webinar themed Nigeria’s Economic Landscape.
He explained that the cumulative 6.5 per cent increase in the benchmark interest rate would encourage Nigerian banks to expand into other African markets by increasing lending yields and reducing banks’ net interest margins.
“We project more Nigerian banks to adopt cross-border expansion and benefit through risk diversification and greater profit opportunities for shareholders,” he said.
He claims that the adoption of Holdco structures by many local lenders will aid in smothering the rising fintech competition through the creation of new fintech products or by collaborations with and investments in other businesses that are developing goods.
Recall that the likes of Access Bank and GTCO already have this structure in place.
He added, “The transition to Holdco structures will give Nigerian banks more leverage to diversify their earnings in the face of the present tight monetary policy regime, thus enhancing their topline. Zenith Bank and Sterling Bank recently got approvals in principle to convert to Holdcos, following FBN Holdings, Stanbic IBTC Holdings, FCMB Group, and GTCO as NGX-listed banks, who currently operate Holdco structures.”
“So far, the banking sector recorded a positive year-to-date performance of 8.50 per cent. An example of diversification from Nigerian risks through non-Nigerian operations can be seen with the United Bank for Africa. Sixty-three per cent of contributions to UBA’s profit before tax came from African operations in 21 countries,” he explained.
Mr Chukwu continued by stating that the expansion of electronic transactions and other payment options had caused a boom in the banking industry.
Business Post had reported that at the 290th Monetary Policy Committee (MPC) Meeting in March, CBN Governor, Mr Godwin Emefiele announced a further benchmark lending rate increase to 18 per cent to cushion the nation’s inflationary pressure.
At the beginning of the year, the MPC raised the rate from 16.5 per cent to 17.5 per cent in a sustained push to control inflation and ease pressure on the Naira.
By Aduragbemi Omiyale
Top financial technology (fintech) companies in Nigeria, PalmPay and Carbon, have commenced the issuance of Verve cards to their customers.
This allows millions of Carbon and PalmPay customers access to Verve’s extensive payment network, bringing digital payment solutions to previously underserved populations.
They began issuance of the cards following the approval of the Central Bank of Nigeria (CBN), underscoring the apex bank’s commitment to empowering fintech companies and advancing financial inclusion across the country.
The issuance of Verve cards by these firms will bring digital payment solutions to previously underserved populations.
Industry observers note that the decision by both fintech companies to align with Verve stems from the payment card’s network-wide reach and a robust infrastructure across Nigeria and beyond.
Last year, Verve marked its 15th anniversary characterized by its outstanding quality, innovativeness and vast array of options; it also announced that it has issued over 70 million cards, establishing itself as a dominant player in Nigeria’s payment ecosystem.
The domestic card scheme’s impressive penetration makes it a natural choice for fintech platforms seeking to rapidly expand their payment offerings while supporting the CBN’s financial inclusion goals.
Other fintech companies that have previously followed this line in issuing Verve cards include Opay and Moniepoint.
As a homegrown card scheme, Verve has continued to innovate its service offerings to compete effectively with international payment networks.
The company has integrated advanced features, including contactless payment technology and enhanced security measures, such as biometric authentication through other sophisticated recognition systems such as fingerprints.
Through collaborations like this, Nigeria’s journey toward a more inclusive financial ecosystem will be shortened, providing more Nigerians with access to modern banking and payment services through the combined technological capabilities of these financial service providers.
By Modupe Gbadeyanka
A leading player in the digital financial services sector, Moniepoint Incorporated, has been described by the federal government as a testament to the strength of Nigeria’s financial technology (fintech) landscape.
The Minister of Foreign Affairs, Mr Yusuf Tuggar, during a visit to the United Kingdom headquarters of the company, also said the firm reflects a true Nigerian success story.
He acknowledged the significant backing Moniepoint has received from global investors, including Google’s Africa Investment Fund, Visa, and BII, further validating its position as a leader in the fintech space.
Mr Tuggar stressed that a thriving fintech sector directly translates to more jobs, increased financial inclusion, and a stronger economy for Nigeria.
The Minister highlighted the organisation’s impressive growth, citing its 2000+ employees, thousands of sales personnel, and its empowerment of millions of businesses through enhanced financial inclusion.
“Nigeria is at a vantage position in the fintech and financial services sector. With banks and fintechs operating across Africa, we must continue to instill confidence in Nigerian businesses as they expand globally. Moniepoint is a testament to the strength of Nigeria’s fintech ecosystem,” he said during the visit aimed at strengthening diplomatic ties and fostering strategic cooperation between Nigeria and the UK.
In his remarks, the chief executive of Moniepoint, Mr Tosin Eniolorunda, reiterated the company’s commitment to powering the dreams of millions of business owners while engineering financial happiness for all Africans.
He noted that the dynamic digital landscape in Nigeria presents unique opportunities to harness technology to drive real change, and Moniepoint is excited to be at the forefront of this transformation.
“By empowering individuals and businesses with financial tools that are innovative and efficient, we believe that technology can be a powerful catalyst for economic growth and social development.
“This visit by the Minister signposts the importance of cross-border collaboration and the strengthening of Nigeria’s global partnerships. We recognize the critical role that international cooperation plays in advancing innovation, especially within the fintech sector.
“As a country, Nigeria has immense potential, and through strategic alliances with global stakeholders, we can unlock new opportunities that benefit both local and international communities.
“At Moniepoint, we are deeply aligned with the Nigerian government’s vision to enhance strategic cooperation in areas like trade, investment, and technology.
“We are eager to continue contributing to the development of our country’s digital economy while fostering meaningful collaborations that will leave a lasting legacy for generations to come,” he stated.
Formerly known as TeamApt Incorporated, Moniepoint, founded in Lagos in 2015 by Mr Eniolorunda and Felix Ike, has rapidly grown into a comprehensive digital financial services provider.
Offering payments, banking, credit, business management tools, and cross-border payment solutions, Moniepoint serves over 10 million businesses and individuals across Nigeria and Africa.
By Modupe Gbadeyanka
To help Nigerians secure their financial futures and build lasting legacies, Stanbic IBTC Bank has reintroduced its private banking offerings.
With a focus on personalised financial solutions, portfolio management, investment strategies, and estate management, Stanbic IBTC Bank empowers individuals and families to achieve their long-term goals of building lasting legacies for future generations.
By equipping families and individuals with the knowledge and tools to manage their wealth effectively, the subsidiary of Stanbic IBTC Holdings is fostering a legacy of financial resilience and prosperity.
Stanbic IBTC Bank’s private banking offerings include personalised financial planning to help clients achieve their short and long-term financial goals, investment management to enable clients access a wide range of investment opportunities, (including equities, fixed income, and alternative assets), estate and trust services through expert guidance on estate planning, wills, and trusts to ensure smooth wealth transfer, retirement planning through solutions that help clients build a secure and comfortable retirement, insurance and risk management through comprehensive protection against unforeseen events that could impact financial stability.
In a world where financial security and intergenerational wealth transfer is becoming increasingly critical, Stanbic IBTC Bank’s comprehensive suite of private banking solutions provides clients with the tools and expertise needed to navigate the complex financial landscapes.
Stanbic IBTC Bank leverages its deep market knowledge and global expertise to deliver solutions that align with clients’ unique aspirations.
“At Stanbic IBTC Bank, we understand that building a legacy goes beyond accumulating wealth; it is about creating a sustainable financial foundation that benefits future generations.
“Our innovative solutions are designed to help families protect, grow, and transfer their wealth seamlessly, ensuring their values and aspirations endure over time,” the chief executive of Stanbic IBTC Bank, Mr Wole Adeniyi, stated.
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