By Omoh Gabriel, Business Editor
Three out of the twenty-four banks in the Nigerian banking industry dominate the market with deposit liabilities of N3.710 trillion, a little above the deposit liabilities of the eight rescued banks which amounted, as at the end of December 2010, to N3.06 trillion. Figures obtained from monetary authorities showed that First Bank, Zenith and UBA are dominating the Nigerian banking scene with a total deposit liabilities of N3.7 trillion.
First Bank which leads the market in terms of deposit has a deposit base as at end of December last year, of N1.306 trillion out of the total deposit of N10.837 trillion of the 24 banks in the country. This represents 12.06 per cent of the total cash deposit in the country. By this, First Bank has a market share of 12 per cent. Closely following is the new generation bank, Zenith which has outpaced several others with a deposit liability of N1.283 trillion. Zenith’s share of the Nigerian banking industry is 11.85 per cent. The next in the league of the top three is UBA which deposit liability hit the one trillion mark. Its deposit liability as at the close of business in 2010 was N1.120 trillion. Its share of the Nigerian money market is 10.33 per cent.
According to financial services sector data, the next in the high rank of deposit is GTbank which has a deposit liability base of N715.170 billion which represents 6.6 per cent of the total deposit liability of all banks in the country. Surprisingly, Oceanic Bank, one of the rescued banks despite its travail had a deposit base of N630.227 billion which is 5.81 per cent of market share. Intercontinental followed closely with a deposit of N 617.733 billion representing 5.7 per cent of the total deposit in the banking system in Nigeria. Also Union Bank, another of the troubled banks followed closely with a total deposit liability of N616.076 billion amounting to 5.68 per cent of total deposit. Skye Bank on its part has a deposit of N484.404 billion which is 4.46 per cent of the total deposit in the country. Access Bank, a bank to watch has a total deposit of N448.411 billion which represents 4.13 per cent of total deposit in the country. The upward mobile bankers behind the bank have signed an MoU with Intercontinental Bank for a business combination. If the process goes through, the bank’s deposit base when combined with that of Intercontinental Bank will leapfrog to the top four placing it behind UBA with a deposit of N1.066 trillion which is 9.8 per cent of total deposit. In the same vein, if the move by First Bank to acquire Oceanic Bank sails through, its deposit base will shoot up to N1.936 trillion which will raise the bank’s share of the money market to 17 per cent from its present 12 per cent.
Diamond Bank has a deposit figure of N376.043 billion representing a market share of 3.5 per cent.
Figures obtained from the Central Bank show that in 2009 when the current CBN governor assumed office, the total deposit base of the 24 banks in the country was N10 trillion while the deposit in the eight rescued banks stood at N3.069 trillion which is 30.7 per cent of the total deposit. As at December 2010, the total deposit base of the Nigeria banks was N10.837 trillion and the eight rescued banks had a total of N3.058 trillion which are at risk.
A breakdown of the deposit the eight banks are saddled with showed that as at December 2010, Intercontinental despite the travail had a total deposit base of N617.733 billion as against the N511.576 billion it had in 2009, an increase of N106.15 billion. Closely following in the deposit at risk is Oceanic Bank which total deposit at the end of 2010 amounted to N630.227 billion. Compared to previous year’s deposit of N542.787 billion, this amounted to a deposit increase of N87.43 billion.
According to the CBN figures, in the case of Union Bank, its total deposit base as at the end of last year was N616.076 billion as against the previous year’s deposit base of N797.913 billion. This in fact showed a decrease in deposit liability of N181.83 billion.
According to CBN data, closely following in the deposit at risk is BankPHB which at the end of 2010 had a deposit liability of N348.707 billion as against the N447.540 billion it had in 2009 when Sanusi’s management took over the bank. This showed a loss of deposit of N98.83 billion. In reaction to its continued loss of deposit and ever rising cost, the management of BankPHB last week panicked and sent an SOS letter to its select-staff capturing the critical situation of the bank and in some of these other rescued banks.
The letter with the subject Interbank/CBN dependence on bank funding, drew top management’s attention “to the escalating level of the bank’s interbank/CBN dependence for funding our operations, and the urgent need to tackle the situation with a multi-pronged solution.” The letter written by the bank’s treasurer on March 16, 2011 stated: “As at mid month, interbank takings stand at N133 billion and this does not include CBN SLF (Standing lending facility) of N35 billion.”
The bank’s treasurer listed issues facing the bank to include persistent negative clearing, loss of deposits and the fact that “70 per cent (N187 billion) of total treasury assets (N246 billion) is held for now in an illiquid AMCON Bond.”
Other rescued banks which deposit is at risk are Afribank – N304.320 billion, Finbank – N209.118 billion, and Equitorial Trust Bank – N133.948 billion deposit.
Analysts familiar with the banking system say that most of the rescued banks were heading for loss if they were not sold or recapitalised soon. One of them stated: “Basically, they have sold all the assets on their books.” This is coming on the heels of the Central Bank saying it has not approved any Memorandum of Understanding, MoU, signed between management of the rescued banks and prospective core investors.
