On Friday, we published our report on Nigerian Banks. We examined what has happened within the Nigerian Banking industry over the past 10 years. It is a unique 10-year study of the margins and profitability of six listed banks: Zenith Bank; Guaranty Trust; Access Bank; FBN Holdings; UBA, and Stanbic IBTC. Read below for details …
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Author Archives: merchant-bank
Nigerian Banks: Resilience built-in
The World Bank Blueprint
The World Bank does not leave a stone unturned when it comes to examining Nigeria. Many of its recommendations come as no surprise: full harmonisation of foreign exchange markets; removal of all tariffs; and trade liberalisation, for example. But who would read the entirety of this authoritative report and summarise it? We would. See details …
More →Bitcoin and Nigeria
Bitcoin has taken the world by storm over the past year, but Nigerians were alert to the opportunities early on, and data suggests that they are among the most active Bitcoin traders in the world. At the same time, numerous central banks take a dim view of cryptocurrencies and would like to control them. What …
More →SPACS as Engines for Public Ownership and Growth
The global equity capital market has been reacting to the infusion of significant cash investments – $83billion in 2020 and over $53billion in the first two months of 2021, according to data compiled by Accelerate Financial Technologies Inc. If the current pace continues, over $300billion could be raised in 2021. These investments have primarily been …
More →Oil prices and FX reserves
One can almost hear the sigh of relief coming from Abuja. Oil prices are up and the immediate threat to the nation’s foreign exchange reserves has receded. Markets (long-dated bonds and equities) have responded positively. However, inflation is still far above risk-free rates and the unofficial exchange rate is slipping. The game is not yet …
More →Intricacies of Liquidity Management in Nigeria
In the banking system, liquidity is often referred to as the ability to fund increases in assets and meet the withdrawal of maturing liabilities at a reasonable cost. However, in this paper, we will dwell on the Central Bank of Nigeria’s (CBN) liquidity management of the financial system.
More →The CBN’s box of tools
Economic growth; inflation; foreign exchange. These are three of the Central Bank of Nigeria’s key responsibilities, yet prioritising one at the expense of the others can prove costly. Yet how – with what tools – does the CBN manage them? We provide answers below. FX Last week, the exchange rate in the Investors and Exporters …
More →Slow GDP points to MPR rate hold
Q1 2021 GDP was reported on Sunday evening and showed the growth rate at 0.51% year-on-year (y/y). This was better than the 0.11% y/y growth of Q4 but Q1 2021’s non-oil growth was actually slower than Q4 (+0.79% y/y against +1.69% y/y). Although the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) …
More →Do you want a 15.0% Naira return?
For the past 18 months investors in 1-year risk-free Nigerian Treasury Bills (T-bills) have been denied a return anywhere near the rate of inflation. Yet this has begun to change and, we believe, conditions are set to improve still further. After the radical interest rate policies of 2020, we see a return to something close …
More →Comparing Mutual Funds, Apples & Oranges
Tomorrow we publish our report on the Mutual Fund (Collective Investment Scheme) industry. The total assets under management (AUM) of Nigeria’s Mutual Funds grew by 50% last year to N1.6 trillion. Yet we have found that it is difficult, not to say impossible, to get comparable performance data for the unit prices (UP) of Fixed …
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