The Nigerian banking sector is expected to be worth over US$168 billion by 2015, from US$117 billion in 2011, international auditing firm KPMG said in a report.
The private Nation newspaper reported Friday that the firm, in its Customer Service Survey for 2013, said even though the country is the most populous on the continent, only about 20% of its population is banked and two-thirds have never banked.
It said the banking industry is made up of 20 banks with nearly 6,000 branches, most of which are concentrated in the urban areas.
The report noted that the sector has gone through several reforms leading to regulatory changes, including a repeal of universal banking licences and the promulgation of more stringent regulations by the Central Bank of Nigeria (CBN).
The report said with the establishment of the Asset Management Company of Nigeria (AMCON) to purchase toxic assets of banks and recapitalise troubled banks, some stability has returned to the sector.
“This development made the leading rating agency Standard & Poor’s (S&P) to upgrade the sector in 2012 to a positive outlook due to the country’s improved asset quality, capitalisation and corporate governance,” it said.
The report said with Automated Teller Machines (ATMs) becoming almost ubiquitous in the cities, it is not surprising that it has been the fastest growing channel in recent years.
“Almost eight in 10 customers surveyed use the ATM and nearly two thirds of these people visit an ATM on a weekly basis with cash withdrawal and balance enquiry amongst the most common transactions customers perform via the ATM,” it added.
Despite the proliferation of new channels in recent years, findings showed that adoption of other alternate channels is still comparatively low, with very few respondents saying they use internet banking (7%), Point of Sale (6%), telephone banking (5%) and mobile payments (2%).
Of the respondents that had use internet banking, a third were private sector employees and 15% were students.
However, while customers said they would like to use some of these alternate channels for transactions such as bill payments and getting financial advice, uptake is still low with many consumers oblivious to the value proposition that these channels provide.