Do you agree that bank deposit growth has peaked in Nigeria and turning negative as posited by Access Bank CEO, Aigboje Aig-Imoukhuede?

Jide Akintunde
#1

19.06.09

The statement made by Mr Imoukhuede is unsettling, particularly because I can't seem to see what necessitated it and what really is the substance. I also wonder why that is what is told Reuters. After the banking industry consolidation, Nigerian banks including Access Bank began to focus on deposit mobilization through expansion of their branches, as opposed to near exclusive focus on deposits by government and established businesses. With oil trading at relatively high price even after the peak price of $147pb in July 2008 until around October, the banks steadily grew their deposit base and more bank customers were made out of the many folks who bought the bank IPOs and the following offers. All of that have slowed down considerably because of the crash in oil price, and I think the loses a lot of people took from their investment in (banking) stocks, including people who are, perhaps, first time account owners, have made them to turn their back of their newly opened accounts. Additionally, remittances have also slowed down in developing countries as the western economies where MRR mostly originate have freezed jobs and are still reeling in the turmoil of the financial market crisis. With these, what Mr Imoukhuede made a categorical statement on is a temporary turn of event. When there is recovery from the recession in the matured markets and slowdown around the world, economic activities will rise and that will reflect on bank deposit growth, including in Nigeria. Also, Nigeria is about 24% banked. So there is a lot of room for more growth of deposit, except that our bankers have made up their minds on competing for the already over-banked minority. That is also why the deposits may be turning negative, granted that the banks preferred margin loan than to support growth of small businesses around us.

topodu
#2

19.06.09

When the real issues behind the slowing down of deposits are subjected to extensive analysis, I'm certain our esteemed CEO would choose to rephrase his remark. For me personally, its simply beyond belief that the custodians of our vision have yet to fully understand the interraction of economic forces in a globalised world.

fbidmos
#3

21.06.09

I think that this statement is not appropriate at this time when the country s financial system needs all the positive media it requires especially to assure international investors that the economy is viable, attractive and profitable. saying that deposits growth is negative is not a good commentary about the nigerian banking industry and the economy as a whole . mind you , the country still have about 70% of deposits outside the banking industry according to CBN so if u factor this in , deposits growth can not be negative. these funds need to be mobilised in into the system.

HOB
#4

23.06.09

I don't agree with the MD of Access Bank. Saying that deposit growth by Nigerian Banks has peaked could be easily interpreted to mean that Nigerians have been fully banked. On the contrary, Nigerians are far from fully banked. If you could recall from statistics by the CBN above 80% of funds in the economy are in still in the coffers of Nigerians that are unbanked or under banked. This means a huge opportunity is still available to banks by way of deposit from the retail segment. In my own opinion, I would say there is rather a change in deposit quality available to Nigerian banks - meaning that the initial quality of deposits received by Nigerian bank may have peaked i.e. deposit coming from collections from Government agencies, Multinational Industries and the value chain across the manufacturing sector. Opportunity for deposit growth lies with banks that have the capacity to come up with innovative retail products that can appeal to the unbanked and under-banked in Nigeria to drive cheap liability, spur economic growth and increased GDP.

Ahmed
#5

24.09.09

According CBN 2008, only 9.7% of Nigeria's Broad money supply (M2) is outside the banking sector. Hope you now appreciate what Aig was saying

Ahmed
#6

24.09.09

According CBN 2008 report (available on thier website), only 9.7% of Nigeria's Broad money supply (M2) is outside the banking sector. Hope you now appreciate what Aig was saying.

Ahmed Yaya
#7

24.09.09

According CBN 2008 report (available on thier website), only 9.7% of Nigeria's Broad money supply (M2) is outside the banking sector. Hope you now appreciate what Aig was saying.

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