Banking
Tinubu’s Reforms Will ‘Favour’ Nigerian Banking Industry—Agusto
By Adedapo Adesanya
Pan-African credit rating agency, Agusto & Co. Limited, has said the Nigerian banking industry has continued to be resilient despite the raging macroeconomic and regulatory headwinds that have constrained performance in the last three years.
In its 2023 Nigerian Banking Industry Report seen by Business Post, the agency said the reforms being instituted by the administration of President Bola Tinubu would provide growth for the industry.
The 2023 edition of the annual report provides a comprehensive review of Nigeria’s banking industry and the near-term expectations and outlook for the Industry.
The firm said the new administration has implemented several reforms aimed at reversing prevailing macroeconomic imbalances and believes that the reforms, including the removal of the petrol subsidy, exchange rate harmonisation, tax reforms, and restoration of a methodological framework for calculating the cash reserve requirements (CRR) provide growth opportunities for the industry.
It said, “For instance, we believe many banks will take advantage of rising liquidity following the eradication of arbitrary CRR debits to grow the loan book, especially since the working capital needs of businesses continue to rise given the weakening domestic currency and other inflationary pressures.”
Agusto projected that the banking industry would benefit significantly from the Naira depreciation that followed the move to harmonise the various exchange windows, reporting significant foreign exchange gains.
“Agusto & Co. anticipates a 520 basis points increase in the return on equity to 26.8 per cent. However, the industry is not entirely insulated from the vagaries of the Nigerian economy, and we expect inflationary pressures to bloat operating expenses in the near term,” the agency stated.
Agusto noted that the bank’s loan book rose by 27 per cent in FY 2022, spurred by increased activities at the differentiated cash reserve requirement (D-CRR) window, higher deposit base, and Naira devaluation.
“Banks have backed this growth with additional investment in credit risk management and capital raising exercises,” it noted.
Agusto said it also expects that new loan disbursements will largely flow to traditional sectors, including manufacturing, oil and gas, and general commerce, amongst others, and resilient players given the volatile operating terrain. Nascent sectors such as renewable energy, health, and gender-based businesses will also continue to gain, the report said.
It noted that innovation carried out by banks, as reflected in the transition to the financial holding company structure and upscale of banking licenses by some players, have upheld the industry.
It called for more collaboration between traditional banks with financial technology companies (Fintechs) and domestic and international development finance institutions (DFIs), among other partnerships that have also supported the Nigerian banking industry.
However, some pressures in asset quality are expected, considering the lower consumer purchasing power and dwindling margins of some industries.
Despite this, Agusto & Co. expects the non-performing loan ratio to remain below 5 per cent by the end of 2023 as many banks leverage their past experiences from recessions and the pandemic to navigate this stressed cycle.
Agusto’s financial projection for the Nigerian banking industry is generally positive. However, it cautioned that “we recognise that the industry will face emerging risks from policy reforms, and the ability to respond swiftly will determine the winners and the losers.”
By Modupe Gbadeyanka
The Nigeria Revenue Service (NRS) has denied reports that customers performing financial transactions would pay a Value Added Tax (VAT) of 7.5 per cent from January 19, 2026.
Information about this emanated from messages sent out to customers of a financial institution, informing them of the new development in compliance of Nigeria’s new tax laws, especially the Nigeria Tax Act 2025.
It was claimed that Nigerians, as part of efforts of the government to generate more funds from taxes, would begin to pay VAT for the use of banking services like USSD and others.
But reacting in a statement signed by its management on Thursday, January 15, 2026, the tax collecting agency emphasised that the VAT collection for such services was not new.
It stressed that customers have always paid taxes for electronic money transfers and others, as this is charged on the fee, not from the main amount of the transaction.
“The Nigeria Revenue Service wishes to address and correct misleading narratives circulating in sections of the media suggesting that Value Added Tax (VAT has been newly introduced on banking services, fees, commissions, or electronic money transfers. This claim is categorically incorrect.
“VAT has always applied to fees, commissions, and charges for services rendered by banks and other financial institutions under Nigeria’s long-established VAT regime. The Nigeria Tax Act did not introduce VAT on banking charges, nor (sic) did it impose new tax obligation on customers in this regard.
“The Nigeria Revenue Service urges members of the public and all stakeholders to disregard misinformation and to rely exclusively on official communications for accurate, authoritative, and up-to-date tax information,” the statement read.
Business Post reports that what this basically means is that if a customer sends N10,000 and the bank charges N50 for the service, a 7.5 per cent VAT on the N50, which is N3.75, would be paid by the sender, not N750, which is 7.5 per cent of N10,000.
By Adedapo Adesanya
Nigerian-born payments company, Paystack, has announced its entry into the banking sector with the launch of Paystack Microfinance Bank (Paystack MFB) after the acquisition of Ladder Microfinance Bank.
The bank continues Paystack’s push into consumer products and adds a banking layer to its business-focused payment product, coming ten years after the company was founded with the goal of simplifying payments for businesses using modern technology.
In Nigeria alone, the company says its systems process trillions of Naira every month, supporting more than 300,000 businesses and millions of customers. According to Paystack, this growth highlighted a broader need beyond payments, prompting the decision to build a more comprehensive financial offering.
Paystack MFB will begin lending to businesses before expanding to consumers. It will also offer banking-as-a-service (BaaS) products to companies building financial products and treasury management products.
The company explained that while payments are a critical part of the financial journey, businesses and individuals increasingly require a full financial operating system. This includes the ability to store money securely, move funds easily, gain clarity from financial data, and access tools that support long-term growth. Developers, Paystack added, also need reliable, secure, and compliant infrastructure to build new financial solutions efficiently.
To address these needs, Paystack said it has established Paystack Microfinance Bank as a separate and independent entity from Paystack Payments Limited.
The new microfinance bank operates with its own license, governance structure, and product roadmap, although it will work closely with its sister company.
“By adding Paystack MFB to our family of brands, we’re finding the right balance through combining the rapid innovation of a tech-first platform with the stability of traditional banking,” said Ms Amandine Lobelle, Paystack’s chief operating officer.
Last year, it launched its controversial consumer payments app Zap, and now it is taking a step further with the company securing regulatory backing to become a deposit-taking institution. According to a statement, the bank will be guided by the same principles that shaped Paystack’s early success, including reliability, simplicity, transparency, and trust.
Paystack MFB has begun operations with a small group of early members and plans a gradual rollout to more businesses and individuals. The company also announced the opening of a waitlist for interested users and confirmed it is recruiting a dedicated team to help build its long-term banking infrastructure.
By Modupe Gbadeyanka
The Economic and Financial Crimes Commission (EFCC) has helped First Bank of Nigeria to recover the sum of N802.4 million from a suspect, Mr Kingsley Eghosa Ojo, who unlawfully took possession of over N1.3 billion belonging to the bank.
The funds were handed over the financial institution by the Benin Zonal Directorate of the anti-money laundering agency on Monday, January 12, 2026, a statement on Tuesday confirmed.
First Bank approached the EFCC for the recovery of the money through a petition, claiming that the suspect received the money into his account after system glitches.
The commission in its investigation; discovered that the suspect, upon the receipt of the money, transferred a good measure of it to the bank accounts of his mother, Mrs Itohan Ojo and that of his sister, Ms Edith Okoro Osaretin, and committed part of the money to completion of his building project and the funding of a new flamboyant lifestyle.
With the recovery of the money from the identified bank accounts, the EFCC handed it over in drafts to First Bank.
While handing over the lender, the acting Director for the Directorate, Mr Sa’ad Hanafi Sa’ad, stressed his organisation would continue to discharge its mandate effectively in the overall interests of society.
“The EFCC Establishment Act empowers us to trace and recover proceeds of crime and restitute the victim. In this case, First Bank was the victim and that is exactly what we have done.
“We will continue to discharge our duties to ensure that fraudsters do not benefit from fraud and that economic and financial crimes are nipped in the bud,” he said.
In his response, the Business Manager for First Bank in Benin City, Mr Olalere Sunday Ajayi, who received the drafts on behalf of the bank, commended the EFCC for the swiftness and the professionalism it brought to bear in the handling of the matter and expressed the bank’s gratitude to the commission.
He described the EFCC as one of Nigeria’s most effective and reliable institutions.
Meanwhile, Mr Kingsley and all other suspects in the matter have been charged to court for stealing by the EFCC.
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