As the financial world turns its gaze towards the future, Vetiva Capital Management stands at the forefront, heralding core banking as the driving force behind economic growth in 2024. Olumide Sole, the esteemed sub-Saharan banking research analyst, shared his insights on Arise Television, painting a picture of a robust banking sector buoyed by strategic moves and savvy investments.
In a year marked by significant Forex evaluation gains, banks like Zenith, GTCO, and UBA have seen their fortunes soar. Yet, with the rise of interest rates, the cost of funds follows suit, prompting banks to adjust their strategies accordingly. The Central Bank of Nigeria’s decision to lift the two billion limit on the Standing Deposit Facility has opened the floodgates, allowing banks to channel excess liquidity into profitable avenues.
The stock market, too, is abuzz with activity. Access Bank now reigns as the largest bank by asset size, with ambitions to scale even greater heights. First Bank of Nigeria’s recent share issuance is a calculated step towards expansion, while FCMB Group’s additional tier one capital issuance sets the stage for increased lending and broader banking operations.
Fidelity Bank boasts the largest net expansion in the first margin, and its acquisition of Union Bank UK is poised to bolster earnings further. GTCO, with one of the highest payout ratios, promises to maintain its generous stance towards investors.
However, not all is rosy in the banking garden. Stanbic’s unchanged dividend payout of N1.5 may leave investors wanting, despite the launch of a new fintech subsidiary. But hope springs eternal, as UBA’s impressive non-interest margins and Zenith Bank’s commendable 40% dividend payout signal a bright horizon for the banking sector’s performance, both in the market and beyond.
As we venture into 2024, the narrative of Nigerian banking is one of growth, innovation, and resilience. With core banking at the helm, the financial landscape is set to flourish, offering a beacon of prosperity in an ever-evolving economic tapestry.
