Chief Executive Officer, West Africa, RenCap, Yvonne Ike,
By Obinna Chima
The Renaissance Capital (RenCap) has said that growth in the Nigerian banking sector will be largely-driven by competition.
Chief Executive Officer, West Africa, RenCap, Yvonne Ike, said this in a chat with journalists in Lagos.
She also identified the growing interest of foreign investors in the Nigerian banking sector as a factor that would propel growth in the sector.
She added: “I do think that we would see a bit more consolidation in the banking sector. I think the banking sector is a very strong sector and it is going to continue to be very competitive. We bank like Guaranty Trust Bank Plc (GTB) that has a cost to income ratio of 41 per cent and has return on equity of over 20 per cent. “So we would see people struggling to compete and banks that have the platform and align their strategy with the growth sectors of the economy would outstrip others.
“We are gradually seeing more international banks looking at the market. This is something that is taking longer than we anticipated.”
She identified poor infrastructure, security and corruption as major factors affecting the growth of the economy, even as she was upbeat that with ongoing reforms, the country would continue to record economic growth.
Ike urged both local and foreign investors to take advantage of the investment opportunities in the economy, saying: “The issues that Nigeria faces predominantly are around infrastructure, corruption and security. But we are seeing developments in those areas. But we are all impatient for it to move a little quicker.
“We do think that everything is moving in the right direction. That is why we think that the country is an investment destination. You can’t wait for everything to be fixed before you invest. We think that the time to invest is now,” she declared.
Speaking on the proposed rebasing of Nigeria’s Gross Domestic Product (GDP) expected to take place in October; the RenCap boss reiterated that the policy would result to 40 per cent increase in the country’s GDP.
According to her, “Right now we have GDP that is almost $300 billion and that number is currently based on 1990 numbers. The rebasing will take us closer to South Africa’s GDP. There are some basic facts which are there to be looked at. If you have an economy growing at double the rate of another economy and you have that kind of rebasing that is coming in an infrastructural weaker economy, our estimate is that within the next five years, the Nigerian economy would be as big as the South African.”