Zenith Bank Chief Executive Officer (CEO), Ebenezer Onyeagwu, has said the COVID-19 pandemic is bound to adversely affect the Nigerian banking industry.
Speaking to CNBC Africa, Onyeagwu stated that one of the most immediate impacts of the pandemic was the fact that the oil price crash would have negative implications for banks’ revenue targets. Onyeagwu said: “In terms of banking, the drop in the price of crude is affecting directly the exposure that banks have created in the oil and gas sector.
Revenues are challenged now; no doubt. And you have a situation where revenues are challenged, the obvious next step will be for you to restructure.” He also noted that the situation would remain very challenging until there was a vaccine to remedy the virus, and that for now, effort was being made to flatten the curve by preventing further spread of the virus, adding that while the effort continued, banks were not expecting much growth.
Kindly subscribe here He said: “In this moment too, as far as banking is concerned, we are also going to experience the fact that we don’t expect a situation where there will be growth in loan books. Loan growth will be challenged. World Bank’s screen now is on different sectors of the economy and how the COVID-19 impacts them restructuring the loan book.
The Central Bank of Nigeria (CBN) has even given a dispensation to this effect; asking banks to come up with the various proposals they have for the restructuring of the loan book.” He then disclosed that there had been some positives arising from the COVID-19 pandemic. According to him, Zenith Bank had recently witnessed a massive increase in the number of businesses being transacted through various digital channels.
Apparently, customers who were hitherto disinterested in digital banking are now showing interest. The Zenith Bank CEO then clarified that the pandemic was not only affecting the banking industry alone, “It affects every aspect of the economy.” He added that, “In a situation where you have a lockdown of the economy, if you lock down all the agents, there is no way business volume will not be bad or impacted.”