According to Johnson Chukwu, CEO of Cowry Asset Management, more local lenders would pursue cross-border expansion in response to the Central Bank of Nigeria’s adoption of a hawkish monetary policy.
Speaking at a recent virtual webinar on “Nigeria’s Economic Landscape” hosted by Cowry Asset Management, Chukwu explained that the cumulative increase in the benchmark interest rate of 6.5% would encourage Nigerian banks to expand into other African markets by driving up lending yields and reducing banks’ net interest margins.
He stated: “We anticipate that more Nigerian banks would pursue cross-border expansion, benefiting from risk diversification and improved shareholder returns.
He said in his presentation that banks were going forward with restructuring to broaden their sources of income and remain competitive with other financial services. “So far, the banking sector recorded a positive year-to-date performance of 8.50 per cent.