by Niyi Jacobs
LThe Bank Strength Index (PBSI) report for 2024 has named Access Corp, Zenith Bank, FBNH, ETI, UBA, and GTCO as Tier 1 Banks, reinforcing the concept of FUGAZE. These banks have demonstrated strong financial metrics based on audited financial statements for the Financial Year (FY) 2023.
According to the report, Tier 1 banks are likely to dominate big-ticket public and private sector transactions, highlighting the need for continuous revision of evaluation metrics for bank classification. The report also notes that the banking sector is undergoing a significant transformation, driven by cloud-based blockchain technology, which is expected to improve the efficiency of financial transactions and relationships.
The report cautions that while higher capital levels are necessary, banks must use the additional cash to improve shareholder returns and customer service experiences. It also highlights the importance of effective asset and liability management (ALM) to mitigate macro and microeconomic risks, citing the examples of failed US banks in 2023.
The report concludes that raising Nigerian banks’ equity base is not sufficient to drive economic growth and development, requiring a coordinated public and private sector approach to policies, programmes, and processes.
