Key questions:
- Following a chaotic first half of the year that saw a failed naira redesign policy, FX liberalisation, rising inflation, etc., how did Nigerian banks fare in H1 2023?
- Given the outlook for higher inflation, weakening naira and higher interest rates, what is the outlook for the Nigerian banking sector in H2’ 2023?
Just over a year ago, we examined how Nigeria’s worsening macroeconomic landscape threatened the performance of Nigerian banks in Q1 2022. With fears of a recession fresh on the horizon, we spotlighted the impact of high inflation, rising interest rates and exchange rate devaluation on banks’ financials. The conclusion was that despite these downside risks, the Nigerian banking sector had what it takes to survive another recession.
Fast forward to Q2 2022, we explored the impact of rising regulatory costs such as monthly Cash Reserve Ratio (CRR) debits and the Asset Management Company of Nigeria (AMCON)
