Nigerian banks are unlikely to see a repeat of their robust 2012 profits because of increasing pressure on earnings, Fitch Ratings says. Tougher regulations together with higher funding costs are likely to constrain profitability over the next 18 months.
The central bank is focusing on consumer protection and encouraging financial inclusion in this post-crisis period. We expect new limits on bank charges imposed by the Central Bank of Nigeria to dent what have been highly profitable fees and commissions, particularly for those with largeretail franchises. The most significant impact is likely to arise from the gradual phasing out of "commission on turnover" - a customer transaction fee - by 2016.