-1735507429138-863159213.jpeg&w=1920&q=75)
- The Nigerian banking sector witnessed several events in 2024
- These happenings shaped the sector in the year
- TheRadar highlights five of these events: the revocation of Heritage Bank’s licence, bank system upgrades, and banks’ rapid expansion
Nigeria’s banking sector witnessed events in the outgoing year that tested its resilience, expanded its reach, and positioned it as one of the biggest on the African continent.
Despite regulatory big sticks, a volatile economy, and operational occurrences, the Nigerian banking sector stood strong, leaving major successes in its trail.
From the Central Bank of Nigeria’s (CBN) revocation of Heritage Bank's operating licence to banks' system upgrades, TheRadar highlights five of the biggest events that shaped the sector in 2024.
Five events that defined Nigeria’s banking sector in 2024
1. Revocation of Heritage Bank’s licence
Nigerians woke up on Monday, June 3, 2024, to the news of Heritage Bank's licence revocation. According to the CBN, the revocation is to ensure public confidence in the financial system as the bank’s non-performance threatens financial stability.
Following the revocation, the Nigeria Deposit Insurance Corporation (NDIC) was appointed liquidator of the bank's assets, a process that commenced immediately.
The NDIC said insured depositors will be paid up to N5 million through their Bank Verification Number (BVN)-linked alternate accounts. In contrast, depositors with funds above N5 million will be paid liquidation dividends upon realisation of the bank’s assets and recovery of N700 billion debts owed to the bank.
The corporation has also begun selling the defunct bank's landed properties and chattels through a competitive public auction and assured that the bank’s creditors will be paid after the liquidation of the bank’s assets.
2. Unity Bank and Providus Bank merger
Following the bank recapitalisation policy of the CBN, the management of Unity and Providus banks secured the CBN’s financial accommodation to support both banks’ mergers.
Under the recapitalisation policy, banks have the option of injecting fresh equity capital through private placements, right issues and/or offers for subscription, mergers and acquisitions, and/or upgrading or downgrading of licence authorisation to meet the minimum capital requirements.
According to the CBN, the merger is crucial for the financial health and operational stability of the post-merger organisation. The financial support from the CBN will be instrumental in addressing Unity Bank’s total obligations to the CBN and other stakeholders.
The management of Unity and Providus banks said the merger marks a strategic and complementary union that will leverage the strengths of both banks to create a leading financial institution in the industry with footprints in retail, corporate, commercial, and digital banking.
3. Bank system upgrades
In September and October, Nigerians witnessed what seemed like an industry-wide wave of bank system upgrades to allow for seamless and easy banking.
The trend started with Sterling Bank, which notified customers of a planned upgrade in September. The upgrade followed the bank’s migration of its Information Technology (IT) services from a Switzerland-based core banking application, Temenos T24, to SeaBaaS by Peerless, an indigenous core banking solution, in September 2024.
The upgrades to core banking applications led to glitches with the banks’ services, as bank customers lamented their inability to carry out banking operations, especially using mobile platforms.
Some banks later announced the completion of the upgrade, while others apologised to customers and admitted facing difficulties in transitioning to a new core banking system.
4. Access Holdings Plc’s rapid expansion and acquisition
2024 saw Access Holdings Plc expand its frontiers to many African and European markets.
The HoldCo appeared to be on an acquisition and expansion spree in the outgoing year given the number of countries where it has established its footprints.
The company, through its banking subsidiary, Access Bank UK Limited, established its first fully-owned subsidiary in Malta in early December, stating that the new entity will operate as Access Bank Malta Limited, a credit institution.
The holding company through its banking subsidiary, Access Bank Plc, signed a binding agreement with Bidvest Group Limited for the acquisition of a 100 per cent equity stake in Bidvest Bank Limited.
According to the bank, the acquisition is expected to close in the second half of 2025, subject to regulatory approvals.
In November, Access Bank UK Limited signed a binding agreement to acquire a majority equity stake in Afrasia Bank Limited, the fourth-largest bank by total assets in Mauritius.
Access Holdings said the agreement aligns with the franchise’s broader growth and expansion plans, leveraging the country’s established financial services sector.
Access Holdings also completed the acquisition of Standard Chartered Bank Angola S.A. and Standard Chartered Bank (Sierra Leone) Limited and is working to finalise the acquisition of Standard Chartered Bank’s subsidiaries in Cameroon and The Gambia, as well as its consumer, private, and business banking operations in Tanzania.
In July 2023, it acquired a 51 per cent majority equity stake in Finibanco Angola in its determined commitment to expand its presence in Africa.
Its acquisition tentacles include an 80 per cent stake in Uganda’s Finance Trust Bank, the full acquisition of the National Bank of Kenya, and the purchase of the African Banking Corporation of Tanzania, which now operates as Access Bank Tanzania.
The company has also expanded its portfolio by merging with ARM Pensions Managers to form Access ARM Pensions, which is currently one of Nigeria’s largest pension administrators.
5. UBA and Zenith Bank’s expansion
In their continued determination to position Nigerian banks as the biggest on the continent, the United Bank for Africa (UBA) Group and Zenith Bank were among the banks that expanded into other markets in 2024.
The UBA Group signed a business cooperation deal in November with the French government to commence full banking operations in France.
Chairman of UBA Group, Tony Elumelu, signed the agreement as part of President Bola Tinubu’s state visit to France, saying the partnership is part of the Group’s mission to ensure seamless international banking services for customers across its franchise area.
The Group also announced plans to open a branch in Saudi Arabia and launch additional African subsidiaries in 2025.
The bank has continued to expand, boosting 25,000 staff in its employ, and serves more than 45 million customers across 24 countries.
Zenith Bank also expanded its global footprint with the opening of a branch in Paris, France in November.
According to the bank, the opening of Zenith Bank, Paris, a Third-Country Branch (TCB) of Zenith Bank (UK) Limited, a subsidiary of Zenith Bank Plc, represents a key milestone in the bank’s global growth strategy and underscores its commitment to serving clients in the European region.
2024 wrapped: Bank recapitalisation, interest rate hikes, three other key policies of CBN
Meanwhile, TheRadar reported that in the outgoing year, the Central Bank of Nigeria (CBN) made key decisions that shaped Nigeria’s monetary landscape.
2024, which marks the one-year in office of the CBN governor, Olayemi Cardoso, saw the CBN make such policies as the bank recapitalisation policy, interest rate hikes, and clearing of forex backlog, among others.
