Nigeria : Sterling Bank looking to purchase one or two mid-size banks
The bank wants to take advantage of the sharp fall in the value of the naira.Sterling Bank has revealed it is looking to purchase one or two mid-sized commercial banks in Nigeria.
Chief financial officer Abubakar Suleiman told Reuters that the bank wants to take advantage of the sharp fall in the value of the naira along with increased regulatory pressure which is forcing banks to recapitalise.
He added that Sterling Bank expects a further 20 per cent devaluation in the naira and eroding capital ratios for several of its rivals exposed to foreign currency assets.
The Nigerian banking sector was hit by a decline in oil prices, with the crude barrel falling from $114 (€102) in June 2014 to around $45 in 2015.
The country generates 70 per cent of its revenue and about 90 per cent of its export earnings from oil, and the share of the hydrocarbon industry out of total bank loans has doubled since 2008.
The fall in oil prices led the naira to tumble 21 per cent between June 2014 and February 2015, and in January 2016, it fell to a record low of 305 to the dollar on the parallel market.