It’s amazing that Access Bank for example has assets of roughly of $15.3bn which is slightly above 15% of Nedbank’s assets of $95bn but made more profit after tax ($157.7m) than Nedbank ($102.9m).
What I don’t understand: Are Nigerian banks better at the business of banking than SA banks? Or are they just fleecing their customers?
Good question.
I’ve handled banks in both countries.
Nigerian banks have unreasonable margins between interest paid and interest earned, and they make too much idle money from just holding government securities.
They have next to no consumer loans, nor long term development type loans.
This architecture must change.
Reforms have been ongoing.
Soludo’s recapitalisation was a big one. It produced much bigger banks, though they’re still much smaller than South African banks.
Now, interest rates on government securities have been dropped drastically. They’ll have to do some more real lending.
The macro environments are sharply different indeed.
