A financial expert has advised Nigerian banks to look into diversifying their earnings by adopting Holdco structures amid the hawkish monetary policy regime by the Central Bank of Nigeria.
In the face of a not-too-good outlook for the Second Quarter of 2023, the CEO of Cowry Asset Management, Johnson Chukwu, suggested that Nigeria Banks should consider cross-border expansions and other investments to remain relevant.
Speaking recently at a virtual webinar titled “Nigeria’s Economic Landscape” organized by CAM, Chukwu said banks must ramp up efforts to meet up with emerging fintech innovations in the lending sector.
“The transition to Holdco structures will give Nigerian banks more leverage to diversify their earnings in the face of tight monetary policy regime, thus enhancing their topline”, he said.
Chukwu added, “We project more Nigerian banks to adopt cross-border expansion and benefit through risk diversification and greater profit opportunities for shareholders.”
With the recent approval by CBN for Zenith, Sterling banks to operate as Holding Companies, Holdcos, the list of banks holding companies has increased to six.
A Banking Holding Company is an entity that controls one or more banks but does not necessarily engage in banking services itself.
Source : DailyPost