National Assembly Complex
Renaissance Capital (RenCap) has said that reforms in the power sector and the passage of the Petroleum Industry Bill (PIB) will prompt tier-one banks to aggressively resume lending.
The financial advisory firm stated this in a report titled “Nigerian Banks -All eyes on Fourth Quarter 2012 (4Q12),” made available to THISDAY Thursday
The latest development in power privatisation was the announcement of the preferred bidders for the five generating and 11 distribution companies. The bidders are now expected to submit letters of credit and bank guarantees from “A”-rated banks.
On the other hand, the PIB is being reviewed by a House of Representatives special committee.
RenCap said: “In our view, we are likely to see tangible progress in the power sector before the PIB is finally passed (and hence the extension of loans to the power sector before we see a significant increase in upstream oil and gas investment).
“Some of the banks have indicated that, should the power privatisation go ahead this quarter, we could see a jump in 4Q12 loan growth. While this would be a welcome surprise, we are not holding our breath with regard to timing; experience suggests to us that timing is likely to be delayed. In our forecasts, we have assumed little-to-zero impact on loan growth in 4Q12, with the benefits from power privatisation only beginning to come through in full year 2013 (FY13).”
Continuing, it said: “For FY13, assuming the absence of developments in the power sector or upstream oil and gas projects, we believe the tier-1 banks are likely to see similar levels of loan growth to those they achieved in FY12.”