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Are Nigerian banks set to boom?

June 24, 2009

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?

Comments

I want to believe that the second part of your last sentence is what will unltimately happen. That is: “(Nigerian) banks (are) set on a long-term trajectory that will ultimately see them realise the dream of making Lagos a financial hub to rival Johannesburg.”

 

Speculative journalism – Arrant Nonesense

Posted by jacob tamm | Report as abusive
 

The political unrest and the high level of corruption might frighten potential investors, on the other hand you see a growing interest in Nigeria from Asia and also from the Middle East. Nigeria is energy rich and if there’s the opportunity to make a quick buck then most investors will turn a blind eye to the bad stuff.

 

There are those who believe that Sanusi also has a hidden agenda which is to ensure that the Hausa (Sanusi’s tribe)in Northern nigeria get a better footing in the Financial Industry, which is currently dominated by the Western and Eastern players.

The president (also a northerner) has till date only appointed his tribesmen to the powerful miniterial roles: OIL and FINANCE

Time will tell…..

Posted by Sholzy | Report as abusive
 

Could this be the ultimate Nigerian bank scam?
Will this mean increased spam?
I don’t like it, Sam-I-am!

Posted by Fahrwud | Report as abusive
 

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