Nigeria’s banks should have few worries. Since cleaning up their balance sheets following their crisis in 2009, they have enjoyed more than two years of rapid expansion and high returns. With the economy powering ahead and new business opportunities resulting from government reforms, there seems to be little holding them back.
Yet a recent tightening of regulations and monetary conditions has made life harder for banks. Last year, the Central Bank of Nigeria cut the amount banks were allowed to charge customers for withdrawals and hiked its cash reserve requirement (CRR) for public sector deposits, which make up a large chunk of those in the banking system. Another blow came with an increase in the so-called Amcon levy, which commercial banks pay to fund the Asset Management Corporation of Nigeria, the state-owned bad bank set up in the wake of the crisis.