E-Financial
Report Predicts New Rounds of Banking Sector Consolidation
A report by McKinsey and Company has stated that digitalisation will enable Nigerian banks to achieve between 25 and 40 per cent cost-reduction.
The report also urged banks to plan for another round of consolidation in order to thrive beyond the crisis by growing their capital base faster than the rates of inflation and devaluation of the naira.
It emphasised that another round of consolidation was inevitable given the need to meet Basel III requirements, manage the possible deterioration of asset quality and some foreign exchange-based commitments to service.
It also called for portfolio restructuring, warning that the Nigerian economy could not afford another portfolio crisis, which is likely to occur.
The report titled, “Nigeria’s banking sector: Thriving in the Face of Crisis and Bold Ideas to Help the Industry Build Resilience and Drive Long-term Sustainability,” also urged the Nigerian banking industry to boldly utilise the lessons it learnt from the COVID-19 pandemic disease interruption to drive sustainability in the industry.
It argued that bold thought and actions were required beyond the crisis, even as it enjoined banks to continue with their adjustment to a remote operating model, revisiting portfolio priorities and some valuable lessons in order to adapt to the “next normal.”
It also recommended four bold initiatives that would enable the lessons of the past few months to drive sustainability in the banking industry beyond the COVID-19 crisis.
The four dimensions, according to the report, are scale, efficiency and productivity, data and analytics as well as talent hunt.
It stated that scale could be achieved either by targeting specific market segment or geography to bring down marginal costs.
“In Nigeria, significant opportunities remain for banks to develop scale across segments–for example by targeting small and medium-size enterprises (SMEs), which have significant unmet needs in the banking sector–or by targeting geographies such as the north of the country, which has been historically underserved,” the report said.
The report also said that efficiency and productivity could be attained by transforming operating models to serve customers as they would want to be served.
“The McKinsey Financial Insight Pulse survey conducted in October 2020 found that most consumers expect to increase their use of digital and mobile banking services even after the crisis, with 53 percent of consumers wanting their banks to make it easy to get a line of credit and 36 percent desiring improved bank websites to facilitate online transactions.
“In Nigeria, we’ve also seen a surge in agent-banking transactions during the crisis, opening up new possibilities for delivering services to more people at lower costs. However, these shifts may reverse unless steps are taken to hardwire new behaviors and attitudes. Now is an opportune moment for banks to revisit and interrogate matters of efficiency and productivity in a disciplined manner.
“Actions taken out of necessity during the lockdown such as online training, virtual performance management sessions, remote working for certain jobs, and adjusted operating hours for branches could be refined for implementation on a permanent basis,” the report said.
The McKinsey stated that rethinking end-to-end digital options for card subscription and renewal, PIN reset, and electronic channel issue resolution, to name a few, could unlock new growth, adding that sales and lending processes, which have been heavily reliant on physical interaction, could be reviewed to identify automation potential, especially for SMEs.
“Ultimately, reimagining these processes in line with consumer requirements will lead to a redefinition of the role (and size) of the branch network and required coverage model,” it said.
The report also advocated for improved data and analytics by leveraging technology for commercial risk and operational effectiveness because rapid shifts in consumer behavior that is driven primarily by physical distancing have led consumers to embrace digital options at a scale and pace not seen before in the country.
“This, in turn, is clearing the way for banks to ramp up their use of data and analytics to enhance services and reduce costs. Previous McKinsey research has demonstrated that data and analytics can potentially increase a bank’s cost advantage by 10 percent and improve cost-to-income ratios by up to 15 percent, even in a recession,” the report said.
It suggested risk and sales as two immediate areas that could be explored and realised through digital marketing by developing new risk models that are powered by artificial intelligence and machine learning that improve accuracy and efficiency and leverage real-time transaction data to understand market and customer dynamics.
It, however, advised banks to find the best talents that could support their shift to digital operations as “the crisis has prompted dramatic shifts in working behavior–notably working from home models– that are opening up new avenues for banks to attract and retain the skills they need to support their shift to digital.”
The report said that banks could attract talents by improving on their employee value proposition, which is often perceived to be less attractive than those of technology companies that are competing for the same talent.
It also advised banks to develop capabilities for identifying and funding viable businesses within the intervention fund category; restructuring their funding base to reflect the realities of the current CRR impact and “use this opportunity to educate the frontline on the implications of CRR and the effective cost of every deposit.”
House of Representatives Public Accounts Committee (PAC) says it has recovered over ₦521 million in unremitted Value Added Tax (VAT) from the Central Bank of Nigeria (CBN).
This is part of an ongoing investigation into revenue leakages and outstanding funds owed to the federal government.
Bamidele Salam, chairman of the Committee, disclosed this while providing an update on the probe into transactions conducted through the Remita platform.
According to Salam, the investigation was initiated following a resolution of the House of Representatives to examine alleged revenue leakages, non-compliance with standard operating procedures and breaches of service level agreements linked to the Remita payment platform.
He said the committee had uncovered several outstanding liabilities and led to multiple recoveries.
Salam revealed that the committee discovered that the CBN failed to remit VAT amounting to ₦521,765,134.17, representing tax deductions on fees earned from Remita transactions.
He described the recovery as evidence of the effectiveness of legislative oversight in promoting accountability and safeguarding public resources.
The lawmaker maintained that the committee would recover all outstanding funds due to the Federal Government and blocking avenues for revenue leakages across public institutions.
It added that the CBN has been directed to remit the outstanding amount into the Federal Government Treasury and provide evidence of compliance.
The Public Accounts Committee is expected to continue its hearing on the matter on Monday, June 8, 2026, at the National Assembly in Abuja.
Central Bank of Nigeria (CBN) has said that any authorised dealer bank the processes foreign exchange (forex) transactions without proper documentation will be fined N100 million.
In addition, the bank will pay N10 million for each transaction involved.
The sanctions are contained in the fourth edition of the Foreign Exchange Manual, which serves as a guide for participants in Nigeria’s forex market.
According to the CBN, the updated manual aims to improve compliance, increase transparency, and strengthen confidence in the foreign exchange system.
Banks are now required to obtain, verify, and keep all necessary documents before releasing foreign currency to customers.
Similar documentation requirements apply to forward and swap transactions, where proof of the underlying trade or obligation must be provided before settlement.
For import transactions, importers must continue to provide documents such as Form M, invoices, certificates of origin, packing lists, and shipping documents.
They must also submit Exchange Control Documents within 90 days after negotiating shipping documents through overseas correspondent banks.
The CBN warned that failure to meet documentation requirements will attract escalating sanctions.
A first violation will result in a 90-day suspension from forex transactions, a second violation will attract a 180-day suspension, and a third offence will lead to a one-year suspension.
A fourth violation could result in a complete ban from participating in forex transactions.
Banks that fail to report cases of default to the CBN will also face sanctions.
The apex bank further tightened reporting requirements. Institutions that submit required daily or monthly returns late will be fined N500,000, while those that fail to submit returns at all will pay a minimum of N5 million, plus an additional N500,000 daily until compliance is achieved.Afternoon Paper Subscription
The revised manual also strengthens oversight of banks’ foreign currency exposure.
Financial institutions that exceed approved Net Open Position limits will receive a warning for the first offence, a 10-working-day suspension from the Nigerian Foreign Exchange Market for the second offence, and a 90-day suspension for the third violation.
The CBN also imposed sanctions on unauthorised reallocation of foreign exchange funds. Any bank found engaging in such practices will be fined N10 million per transaction and may face additional disciplinary action under the Bankers’ Committee ethics framework.
According to the CBN, the new measures are aimed at promoting transparency, strengthening market discipline, reducing abuses, and improving investor confidence in Nigeria’s foreign exchange market.
E-Financial
BOI Wins Dual Honours @ EMEA Finance Awards for Sustainability and Social Impact Leadership
The Bank of Industry (BOI) has been recognised with two prestigious awards at the recently concluded EMEA Finance Achievement Awards, reinforcing its position as a leading development finance institution driving inclusive and sustainable economic growth across Africa.
The Bank received the Best Sustainability Deal in Africa Award for its financing intervention under the Nigeria Distributed Access through Renewable Energy Scale-up (DARES) Project and the Best Social Development Deal in Africa Award for its flagship Guaranteed Loans for Women (GLOW) programme.
The award-winning DARES initiative is being implemented by BOI in collaboration with the Rural Electrification Agency (REA) and supported by the World Bank through a $750 million International Development Association (IDA) credit facility. The programme is designed to expand electricity access across underserved and unserved communities through the deployment of solar mini-grids.
The initiative forms part of BOI’s broader Power and Utilities portfolio, through which the Bank disbursed ₦27 billion to eight businesses in 2025. According to BOI’s 2025 Annual Development Impact Report, all supported projects demonstrated 100 per cent financial additionality, indicating that they would not have proceeded without BOI’s intervention.
The Bank’s Power and Utilities portfolio also recorded the highest Development Impact Framework score across all sectors financed by BOI, underscoring the transformational impact of its investments in sustainable energy infrastructure.
Similarly, the GLOW programme was recognised for advancing financial inclusion and economic empowerment for women-owned and women-led businesses across Nigeria.
Designed to address longstanding barriers faced by female entrepreneurs, including limited access to affordable finance, collateral constraints, and capacity gaps, GLOW provides tailored financing, business support services, and capacity-building opportunities to women-led enterprises across multiple sectors of the economy.
Beyond financing, GLOW provides training, mentorship, market access support, and opportunities for women-owned businesses to strengthen their competitiveness and expand into regional and international markets, including opportunities presented by the African Continental Free Trade Area (AfCFTA).
Speaking on the awards, Dr. Olasupo Olusi, MD/CEO BOI, described the recognition as an affirmation of BOI’s commitment to financing initiatives that create lasting developmental impact.
“These awards reflect the Bank of Industry’s deliberate focus on supporting projects and programmes that deliver measurable economic, social, and environmental outcomes for Nigerians. Whether it is bringing reliable electricity to underserved communities through renewable energy solutions or empowering women entrepreneurs by providing access to affordable finance and growth opportunities, our goal remains the same: to build a more inclusive, resilient, and sustainable economy. We are honoured by this international recognition and remain committed to deepening our impact across sectors that matter most to national development.”
The dual recognition further underscores BOI’s growing reputation as a catalyst for sustainable development and inclusive industrialisation, leveraging innovative financing solutions to address critical development challenges while unlocking opportunities for businesses and communities across Nigeria.
As Nigeria’s foremost development finance institution, BOI continues to play a pivotal role in advancing the Federal Government’s economic transformation agenda through strategic investments that stimulate enterprise growth, create jobs, improve livelihoods, and strengthen the country’s long-term economic competitiveness.
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