Why Is Sierra Leone Attracting Nigerian Banks?

April 14, 2015

Recovering from a civil war and ebola epidemic, Sierra Leone’s commercial banking industry is dominated by foreign players, making it an attractive destination for Nigerian banks, VenturesAfrica reports.

At least five Nigerian lenders have started businesses in Sierra Leone in the last decade. First Bank of Nigeria Limited is the most recent, joining United Bank for Africa, Skye Bank, Access Bank, Guaranty Trust Bank and Zenith Bank, which already have businesses there, Niyi Aderibigbe reports in VenturesAfrica.

Foreign players make up more than 70 percent of Sierra Leone’s commercial banking sector.

First Bank agreed with the International Commercial Bank Financial Group Holdings Ag to buy International Commercial Bank (ICB) Sierra Leone. “The launch of FBNBank Sierra Leone fulfills one of the critical stages of our ambition to steadily broaden and build a more diverse footprint across Africa,” said Bisi Onasanya, CEO of FirstBank, in a prepard statement.

It’s not just Sierra Leone banks that are attracting buyers.

Lenders from London to Qatar are hunting for African banks to buy. No market is attracting more interest than Nigeria, where 35 million adults keep their cash at home, Bloomberg reported in November.

The Nigerian Stock Exchange Banking 10 Index dropped at least 16 percent in 2014. Fitch Ratings expects Nigerian banks’ “performance and growth” to slow more in 2015. Sixty-three percent of publicly traded Nigerian banks trade below their book value, John Storey, a Johannesburg-based analyst at Bank of America Corp., estimates, according to Bloomberg.

First Bank is one of the largest corporate and retail financial institutions outside South Africa in sub-Saharan Africa, operating in five other African countries, France and the U.K. plus offices in China and United Arab Emirates. It’s Nigeria’s second largest bank by assets. Zenith Bank is No. 1.

Nigerian banks are considered the biggest in West Africa, according to VenturesAfrica.

Source: AFK Insider

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