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Lagos, Nigeria, December 15, 2010 —
IFC, a member of the World Bank Group, today recognized 2010 as a year of significant achievement in Nigeria’s banking sector. IFC is supporting stronger financial institutions in the country so they can expand credit to Nigerian businesses, and have a greater positive impact on the country’s future development.
IFC more than doubled its existing exposure to Nigeria’s banking sector during 2010, a sign of confidence in banking reforms being led by the Central Bank of Nigeria. Since July, IFC has invested almost $400 million of equity, convertible and loan financing in First Bank of Nigeria, First City Monument Bank, and GT Bank.
“Nigerian banks faced real challenges in the aftermath of the global financial crisis beginning in 2008,” said Solomon Adegbie-Quaynor, IFC Country Manager for Nigeria. “As 2010 comes to an end, Nigeria’s banking sector is positioned for much stronger growth than a year ago. IFC has committed new investments, combined with advisory services, to help banks reach underserved segments such as infrastructure and SMEs. We will continue to support Nigeria’s banking reforms and growth in 2011, including by strengthening corporate governance and risk management in Nigeria’s banking system.”
In addition to support through new investments in 2010, IFC has previously provided trade finance facilities, equity, and loans to other Nigerian banking clients, such as Access Bank, Diamond Bank, Ecobank, Stanbic-IBTC, UBA, and Zenith Bank. IFC's banking clients were not included on the list of distressed banks announced late last year, positioning them to strengthen further as the market stabilizes and grows.
IFC, through its Nigeria Corporate Governance in Banking Program, will help its clients make further improvements in corporate governance and risk management. IFC is also helping some of its banking clients acquire or recapitalize Nigeria’s distressed banks, and has so far provided letters of support to one local and one international banking client. IFC may also helpsome of its other banking clients acquire or recapitalize the distressed banks once the sales or bid processes are completed.
The long-term success of the Central Bank of Nigeria’s banking sector reforms depends on policies to encourage rapid market demand for capital-intensive activities, such as commercially viable infrastructure projects.
IFC is committed to financing power and transport infrastructure projects in Nigeria because they improve the competitiveness of the country’s smaller businesses, and spur growth and employment.
IFC’s strategy to support the banking sector in Nigeria in the aftermath of recent market turmoil includes:
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Providing long-term financing to help well-managed banks achieve growth objectives and improve their reach to underserved segments, such as infrastructure and SMEs
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Helping partner banks improve corporate governance, risk management, and in developing robust environmental and social monitoring systems
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Supporting the recapitalization efforts of distressed banks through IFC's banking partners.
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About IFC
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IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries. We create opportunity for people to escape poverty and improve their lives. We do so by providing financing to help businesses employ more people and supply essential services, by mobilizing capital from others, and by delivering advisory services to ensure sustainable development. In a time of global economic uncertainty, our new investments climbed to a record $18 billion in fiscal 2010. For more information, visit
www.ifc.org
.
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About IFC in Nigeria
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IFC’s strategy in Nigeria strategically prioritizes:
infrastructure,
especially power, which is the largest single constraint to private sector development and the competitiveness of the Nigerian economy; and,
agribusiness
, which is the largest contributor to GDP (40 percent) and largest employer (65 percent) in Nigeria, especially of the rural population.
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