IBFCAlliance Limited says it will examine the banking sector outlook at a seminar scheduled to hold at the Intercontinental Hotel in Lagos on October 21.
A statement by the company quoted the Managing Director, IBFCAlliance, Mr. Funmi Agusto, as saying that with the banking industry remaining a key driver of new investments, better regulation and cost of equity considerations should lead to better risk management practices and moderate cost of risk.
He further observed that Foreign Direct Investments and increasing pension pot would also contribute to long-term funding in the economy.
Agusto, who noted that banks’ balance sheet growth prospects looked promising, however, submitted that lenders needed equity capital to maximise the growth opportunities.
He believed that improved return on equity to cost of capital levels would be needed to ease ability to raise equity capital.
The IBFCAlliance boss, however, outlined some possible upside factors for the industry.
He said, “Better use of technology will improve banking penetration at lower costs, better FDI inflows and reduced regulatory headwinds can boost revenue profits, and when power sector reforms begin to yield results, it will lead to lower operating costs.”
He recalled that a first phase of the seminar was held at the Oriental Hotel in Lagos a few weeks ago.
Agusto also observed that investment initiatives by companies in various states would drive job opportunities and better reposition the country for improved economic performance.
He explained that “Qatar National Bank invested $500m in Ecobank Transnational Incorporated to acquire 23.5 per cent of the bank, Aliko Dangote is building a $9bn refinery, Unilever is renewing its investment drive with $150m investment in Nigeria, Nestle opened a new $80m factory a few years ago and SAB Miller bought a brewery at Onitsha for $100m.
“This year, SAB Miller also invested $110m to triple its Onitsha brewery facility. Also, Dangote has invested substantial sums in cement manufacturing over the last few years. The Obajana cement plant is the largest cement plant in sub-Saharan Africa.”
Punch
