Nigerian banks will struggle to repeat 2017 results
Subject Nigerian banking sector. Significance Some of Nigeria’s largest banks made significant profits in 2017 despite the country’s recession, benefitting mainly from high-yielding Nigerian Treasury Bills. This is unlikely to be repeated this year, with yields falling as the government replaces expensive domestic debt with cheaper Eurobonds, and banks attempt to shore up their balance sheets. Higher oil prices will help this process, yet many smaller banks are struggling to replicate their larger rivals' success. Impacts A restructuring of telecommunications company 9Mobile’s loan would benefit banks' non-performing loan numbers. Any uptick in Niger Delta insecurity could negatively impact banks, as most have significant loans with the upstream oil and gas sector. The CBN may issue more loans via commercial banks to small businesses and farmers in the run-up to next year's national elections.