Africa’s banks suffered little from the 2008 financial crisis. Most came throughunscathed thanks to high capital ratios, limited exposure to assets outside their country and strategies that largely avoided speculative lending.
Nigerian banks were the exception. Between 2005 and mid-2009, a period in which regulation was lax, they aggressively built up their assets – including large volumes of loans secured against shares – and increased their exposure to the oil and gas sector. They came unstuck when oil prices collapsed, causing Nigeria’s stock exchange to plummet and bad loans to soar.
