Few investors dispute the view that Nigeria’s banks look
cheap at the moment, with most of the major players trading at a
discount to book value and with earnings multiples way below
consumer stocks such as Guinness Nigeria.
 
Nor is anybody arguing against the long-term logic of the
financial sector’s potential growth in an oil-rich country of
140 million people but only 23 million bank accounts.
 
A new central bank head with a background in risk management
is also making all the right noises about improving the sector’s
notoriously murky financial disclosure - part of the reason the
shares crashed so spectacularly in the latter half of 2008.
 
Furthermore, Lamido Sanusi’s stated desire to relax limits
on foreign ownership has breathed new life into the view that
another wave of consolidation, this time involving major global
players, sits around the corner.
 
Does all this sound - like so many other Nigerian promises of easy money - too good to be true,
or are its banks set on a long-term trajectory that will ultimately see them realise the dream of making Lagos a financial hub to rival Johannesburg?