Banks eyes 30% profit offshore, to open brokerage firms

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Banks eyes 30% profit offshore, to open brokerage firms

By Favour Nnabugwu

The country’s biggest lenders including Access Bank, Guaranty Trust Bank Plc and Stanbic IBTC Holdings Plc are diversifying outside their core operations to boost 30 percent profit.

The banks are also mapping effort after covid-19 and a plunge in crude oil curtailed the home market to open insurance brokerage firms In Nigeria, through a holding financial institution that will enable it open subsidiaries in insurance brokerage and payments.

Access Bank Plc, for instance is looking to generate as much as 30 percent of profit outside its home market, following a series of acquisitions spanning East and West Africa last year.

The lender expects African subsidiaries and its U.K. unit to account for about 25-30 percent of profit before tax in the next three to five years from 21 percent in the third quarter, it said in response to questions via WhatsApp. The same range of addition to pre-tax profit is projected to assets, deposits and revenue, it said.

The Lagos-based bank currently operates in 12 countries. It said this year it will expand in eight new African markets by setting up offices in some countries, partnering with existing banks in some nations or deploying digital platforms to provide services to customers.

“We see strong contributions from our key African markets, regional hubs and our outside of Africa international business driven out of the UK,” the lender said.

It plans to grow loans by 10 percent this year to support clients whose businesses are benefiting from the coronavirus pandemic such as telecom and health companies, according to the lender.

Although, the nation exited a second contraction in four years in the fourth quarter, the sluggish economy gives no incentive to further boost lending, it said.

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