3 Banks report N4.77trn loans to customers in 2018


Zenith bank plc, Guaranty Trust Bank (GTBank) plc and FBN holdings plc have reported N4.77 trillion accumulative in 2018, 19 per cent decline from N5.88 trillion in 2017 loans and advances to customers.

Over improved customers borrowing from Financial Technology (Fintech) and other challenges that faced the banking sector in 2018. Over improved customers borrowing from Financial Technology (Fintech) and other challenges that faced the banking sector in 2018, Zenith bank plc, Guaranty Trust Bank (GTBank) plc and FBN holdings plc have reported 19 per cent drop in loans to customers.

The above banks in 2018 reported an accumulative N4.77 trillion loans and advances to customers as against N5.88 trillion reported in 2017, representing a decline of 19 per cent or N1.11 trillion.

Fintech has continued to encroach on commercial banks’ businesses, thereby threatening the operations and deposit mobilization.

A recent report had shown that some Fintech firms have started targeting the deposit and loans segments of traditional banks, with a view to taking part of the market share of the financial institutions.

The breakdown revealed that Zenith bank reported 13.20 per cent decline in loans and advances to customers to N1.8 trillion in 2018 from N2.1 trillion in 2017 while GTBank’s loans and advances to customers’ decline to N1.26 trillion, 12.9 per cent below N1.44 trillion reported in 2017.

GTBank noted that its loan book contracted by 12.9 per cent due to scheduled pay-downs by some foreign exchange loan customers on account of improved foreign exchange liquidity in the market as well as impact of International Financial Reporting Standard 9 (IFRS) implementation.

For FBN Holdings, its loans and advances to customers decreased by 15.9 per cent to N1.68 trillion from N2 trillion in 2017.

For FBN Holdings, the financial institution said, the decline in loan and advances is a reflective of weak macroeconomic environment.

According to the FBN Holdings, “This is reflective of the weak macroeconomic environment that does not support aggressive risk asset creation.

“Nevertheless, the Group will fulfil its commitment on balance sheet growth and materially reduce its NPLs in the current financial year.”

According to Deloitte recent report, “The Financial Services Sector in Nigeria has evolved considerably over the years.  Fintech has disrupted the industry with innovative products and services by introducing digital technology at various parts of the customer’s journey. Several factors including technology, investment and people have contributed to the growth of Fintech.

“Fintech companies have also expanded from traditional payment products to insurance, lending, savings and investments etc. These companies are able to leverage technology to reach a larger customer base without the high cost of building infrastructure and so they are better able to manage the cost to serve.

“Fintechs are bridging the gap and ultimately solving the challenge of financial inclusion by offering a variety of products and services that are cost effective to deploy and easy to access,” the report noted. Nigeria has about 36.6 million adults excluded from financial services and women make up 55.9per cent of financially excluded adults in the country (EFInA 2018).

The General Manager, Branch, Maria Rotilu noted in a report that noted that, the Fintech company application takes just a couple of clicks and approval happens in less than 24 hours.

“Funds are then deposited straight to a customer’s bank account. Branch requires no paperwork, no guarantors and no hidden charges or late fees.”

“As customers take and repay loans, they gain access to higher loan amounts, lower interest rates, and longer repayment schedules and we have many repeat customers.

“On average, customers take 10 loans in their first year on the platform. The product is incredibly sticky and provides our customers with great value.”

A report by Lagos-based Financial Derivatives Company Limited (FDC), noted that fintech has proven popular among working class Nigerian youths as it offers an alternative to a traditional fixed deposit and loan accessibility, which requires a number of visits to a physical branch to set up.

Finance experts said, Fintech advancement has increased with banks becoming more customer-centric, while providing cross-channel avenues through which customers can transact with them.

It is expected that more of this will continue into the future especially as banks continue to innovate and try to stay neck to neck with new technologies and collaborate with Fintech Companies rather than see them as threats to their business.


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