Nigeria bank deposit growth has peaked-Access Bank

By Chijioke Ohuocha

ABUJA, June 17 (Reuters) - Banking deposit growth in Nigeria, Africa's most populous nation, has peaked and started to turn negative in recent months, the chief executive of Access Bank (ACCE.LG) said on Wednesday.

Aigboje Aig-Imoukhede said there were around 23 million bank accounts held in Nigeria, just one million of which accounted for around 80 percent of total deposits.

"Total deposits have peaked and (deposit growth) is now negative," he told a conference call for investors, a day after Access Bank group posted a 31 percent rise in full-year net profit. [ID:nLG732224]

"Asset growth is highly risky, especially from a cost perspective. Our key focus now is managing our balance sheet and not branch expansion," Aig-Imoukhede said.

Nigeria -- Africa's biggest oil exporter, with a population of 140 million people -- has long been seen as a huge potential market for retail banking, particularly last year when record oil prices were fuelling optimism about its growth prospects.

But more than 90 percent of the population live on less than $2 a day, according to U.N. statistics, meaning the number of bankable clients is in reality much smaller.

Consolidation in the banking sector four years ago slashed the number of financial institutions to 24 from 89, leaving the survivors competing fiercely for millions of consumer clients as well as for large corporate customers.

Explosive balance sheet growth enabled them to increase their capacity to lend but the global downturn has since led to higher provisioning for non-performing loans and forced them to adopt more conservative lending strategies. [ID:nLC231700]

Access Bank has grown its branch network to around 118 sites in Nigeria in a short space of time and would now concentrate on "banking the value chain" -- corporate customers, their suppliers and their employees -- Aig-Imoukhede said.

(For full Reuters Africa coverage and to have your say on the top issues, visit: af.reuters.com/ ) (Editing by Nick Tattersall and Rupert Winchester)