New Publication Provides Independent Forecasts and Competitive Intelligence on Nigeria's...

New Publication Provides Independent Forecasts and Competitive Intelligence on Nigeria's Commercial Banking Industry

DUBLIN, Ireland--(Business Wire)--
Research and Markets
(http://www.researchandmarkets.com/reports/c89073) has announced the
addition of Nigeria Commercial Banking Report Q1 2008 to their
offering.

The Nigeria Commercial Banking Report provides independent
forecasts and competitive intelligence on Nigeria's commercial banking
industry.

From Q108 we will be calculating the Commercial Banking Business
Environment Rating (CBBER) for each of the countries surveyed by BMI.
This will permit a more systematic and comprehensive comparison of the
conditions within the banking industries of the various countries than
was possible in the past. For each country, it will also facilitate a
comparison of the conditions within the banking sector and conditions
prevailing in other sectors.

Nigeria's overall CBBER is 48.0. The equivalent figures for the
USA and the eurozone are 84.8 and 81.4, respectively. Nigeria's CBBER
is in the upper bottom-half of the countries in the Middle East and
Africa surveyed by BMI.

Within the CBBER, the most important aspect is the (banking)
market element of the limits of potential returns. This element
accounts for 42% of the overall CBBER. Nigeria's rating for this
element - 48.8 - is almost exactly equal to the overall CBBER, and
only slightly higher than the country element of the limits of
potential returns - 44.3. This indicates that although the banking
sector is not especially large or highly developed the extent of its
development as a sector is nonetheless roughly on a par with the
general wealth, stability and financial infrastructure of the country.
This reflects the small size of the total assets of Nigeria's banking
sector relative to other countries. Moreover, although growth rates
will be high, the absolute growth in total assets and client loans
during the 2007-2012 forecast period will be inhibited by the current
small base from which it is growing.

The CBBER highlights clearly some of the factors that are holding
back Nigeria's banking sector. One is the extremely low level of
per-capita GDP (which is exacerbated by the uneven distribution of
income). Another is the potential volatility of GDP and the Nigerian
economy more generally. Figures of Q307 point to higher growth for the
Nigerian economy, although the potential for inflation remains. Recent
figures from the third quarter are broadly in line with our own views
for Nigeria, although we have raised our 2007 real GDP growth estimate
to 5.8%. We forecast a real GDP growth rate of 9.2% for 2008. Real GDP
growth was driven by the non-oil sector, which grew by 9.5% in Q307
and increasingly accounts for a larger share of total GDP (82% in Q307
at 1990 constant prices). We see this trend continuing into Q407
before undergoing a seasonal dip in Q108, and therefore estimate a
Q407 real

GDP growth rate of 6.1%, continuing the trend for relatively high
growth rates in the fourth quarter of the year. The trend towards less
dependence on the oil sector and the government's 2008 budget, which
included a medium term plan for dealing with oil market volatility are
both healthy signs for Nigeria's longer term prospects.

There is good reason to worry about inflation in 2008, and we are
particularly concerned about inflation pressures emanating from a
growth in 2008 state government expenditure, in response to a surge in
oil revenues flowing to state coffers from the federal government. The
federal government was expected to transfer almost US$6bn of oil
savings to state governments, and depending on how the state
governments allocate the revenue, this could result in an inflation
spike via a liquidity surge. We continue to forecast significant
upside potential to the naira and have revised our 2008 year-end
forecast to NGN114.0/US$, on the back of projected further inflation
risks.

For more information visit
http://www.researchandmarkets.com/reports/c89073

Research and Markets
Laura Wood
Senior Manager
press@researchandmarkets.com
Fax: +353 1 4100 980

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