Nigerian banks whose earnings have been hit by the Central Bank of Nigeria’s (CBN) tight monetary policies will see profits rebound once easing begins as early as the second half of 2015.
“Nigerian banks’ profitability is largely a function of macro stability, and any significant improvement in sector earnings is likely to be driven by a loosening of monetary policy,” said, Renaissance Capital SSA banking analyst Adesoji Solanke in a September 11 note.
“We further estimate that while all banks’ RoEs would benefit from an easing in the cash reserve ratio (CRR), which we think could happen as early as 2H15, tier 2 banks and United Bank for Africa (UBA) will be the most significant beneficiaries,” Solanke said.
The CBN hiked the CRR on public sector funds for lenders to 75 per cent in a bid to stem excess liquidity and protect the naira.
The Minister of Communications Technology, Mrs. Omobola Johnson, has faulted the outsourcing of operations generated locally to foreign companies under the Business Process Outsourcing (BPO) arrangement.
According to the minister, local companies in Nigeria have the capacities and skilled manpower to handle outsourcing within and outside Nigeria, even though Nigeria is not regarded as a destination country for BPO.
She insisted that it would be a disservice to Nigeria, if local operations are outsourced to foreign companies that are established outside the country.
Johnson, who stated this in Lagos, while inspecting the operations of Communications Network Support Services Limited (CNSSL), a local BPO company with over 6,000 employees, said she was impressed with the facilities and manpower of the company. The minister told THISDAY that CNSSL had all it takes to operate outsourced services in Nigeria and still offer such services outside Nigeria, noting that it would be out of place if local BPO companies are not given the chance to do what they are capable of doing.