Vetiva Capital Management, a Nigerian firm, expresses confidence in the growth prospects of core banking for the upcoming year.
Olumide Sole, Vetiva Capital Management’s sub-Saharan banking research analyst, notes significant gains in year-end figures for major banks like Zenith, GTCO, and UBA, mainly attributed to Forex evaluation gains in 2023.
Discussing the impact of rising interest rates on the cost of funds, Sole emphasizes that banks are grappling with increased costs due to higher interest rates on customer deposits.
The removal of the two-billion limit on daily deposits through the Standing Deposit Facility by the Central Bank of Nigeria is seen as a strategic opportunity for banks to boost their revenue and core banking income.
Sole points out Access as the largest bank by asset size, expecting continued growth.
Anticipating the impact of the recent issuance of more shares on First Bank of Nigeria, Sole foresees this contributing to the bank’s expansion.
Other banks, like FCMB Group and Fidelity Bank, are well-positioned for growth following additional capital issuance and strategic acquisitions, respectively.
While acknowledging Stanbic’s consistent dividend payout and the launch of a fintech subsidiary, Sole also recognizes UBA’s impressive performance with a substantial non-interest margin, anticipating sustained support for the bank’s performance in 2024.
Zenith Bank’s robust 40% dividend payout is deemed impressive and is expected to fortify its stock market performance into 2024, according to Sole.
