What a difference a year makes. This time in 2008, Nigerian banks were coming under fire from analysts for not being aggressive enough in expanding their loan portfolios. They were accused of hoarding the vast amounts of capital they had acquired through consolidation and successful forays into the capital markets, and not putting it to work effectively. Their cautious approach to accumulating assets was criticised by many, who felt average bank capital adequacy ratios of more than 20% reflected an inefficient system.
The situation in March 2009 could not be more different. Since last year, the Nigerian stock market has plummeted, losing 60% of its value and casting a dangerous shadow over the sector. To add a blow upon a bruise, the price of oil – by far the country's biggest export earner – has tumbled from almost $150 per barrel to just about $40 as The Banker went to press.
