FUGAZE: Lists of Nigerian banks operating under tier one and two

• Access Corp, Zenith Bank, FBNH, ETI, UBA, and GTCO were designated as Tier 1 Banks by the Proshare Bank Strength Index (PBSI) for 2024
• The Financial Year (FY) 2023 audited financial statements provide the basis of the report's pool of financial measures that was analysed
• It predicted that between 2024 and 2026, financial technology investments, the scalability of customer service, and digital asset engineering will change

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

The Proshare Bank Strength Index (PBSI) identified Access Corp, Zenith Bank, FBNH, ETI, UBA, and GTCO as Tier 1 Banks in 2024.

The report is based on a pool of financial metrics based on audited financial statements for the FY 2023. Photo Credit: RgStudio
Source: Getty Images

Supporting the Afrinvest-inspired idea of FUGAZE, the report is based on a pool of financial metrics based on audited financial statements for the Financial Year (FY) 2023.

Consequently, Fidelity Bank ranked above the tier-two banks, followed by FCMB, Stanbic IBTC, Sterling Holdco, Wema, and Unity Bank.

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In high-value public and private sector transactions, Tier 1 banks typically outperform their tier 11 rivals, according to the most recent Proshare study. As a result, the evaluation measures for bank classification must be updated often, particularly in cases where large seems to be attractive.

It stated,

“Banks are like bulls in a pen; they are stuck behind bars that are difficult to escape. Banking, on the other hand, is free-spirited, agile, and capable of reinterpreting economic reality. “Over the last two decades, the financial payment and settlement business has increasingly grown on the back of cloud-based blockchain technology, which may be destined to improve the efficiency of financial transactions and the quality of person-to-person (P2P) and business-to-business (B2B) relationships.”

New Capital

It stated that between 2024 and 2026, investments in financial technology, customer service scalability, and digital asset engineering will take a new turn thanks to an ongoing banking sector recapitalisation initiative sponsored by the Central Bank of Nigeria.

Proshare analysts add,

"With higher capital levels, banks must use the larger amounts of cash available to improve shareholder returns and customer service experiences. Many banks will get cut at the knees by lacking a deliberate strategy to transition from cash flow to value creation. "Recalling the challenges faced by banks during the Charles Soludo-inspired in 2005, a few bank executives would have more money than business skills, resulting in a terrible waste of additional capital.”

As lenders increase their size and scope to satisfy the demands of an economy valued at US$1 trillion, researchers warn of macro and microeconomic hazards, as exemplified by the US.

The report ineffective asset and liability management (ALM) played a significant role in the 2023 failure of a number of US banks, including Silicon Valley, First Republic, and Signature Banks.

The research went on to say that increasing the equity base of Nigerian banks does not ensure economic expansion.

It stated,

“Transforming bank equity into drivers of economic growth requires more than money; it requires a coordinated public and private sector plan, with what Proshare analysts have repeatedly called a whole-of-government approach to policies, programmes, and processes.”

Four Nigerian banks make list of best in Africa

Legit.ng reported that the 2024 World's Best Banks survey has been released with four Nigerian banks listed among the best in Africa.

The survey published by Global Finance, a monthly financial magazine, showed that UBA, GTBank, Access Bank, and Zenith Bank in Burkina Faso and Sierra Leone, Gambia, Ghana, and Nigeria, respectively, made the list.

It added that banks are resilient rather than collapsing. Some are even reporting earnings that break records, and the local currency crises in Nigeria and Egypt have been disastrous.

Source: Legit.ng