Stanbic IBTC leads nine other banks in capital imports to Nigeria in Q1 2024

Stanbic IBTC Bank Plc recorded the highest capital inflow into Nigeria in the first quarter (Q1) of 2024 at USD 1,257.38 million (37.24 per cent), followed by Citibank Nigeria Limited with USD 547.71 million (16.22 per cent) and Rand Merchant Bank Plc with USD 528.73 million (15.66 per cent).

Standard Chartered Bank raised USD 399.41 million, demonstrating its continued influence and credibility with global investors, while Access Bank raised USD 278.18 million, rounding out the list of top-performing banks in terms of capital imports during the quarter.

Other banks, including First Bank and Zenith Bank, had $98.71 million and $96.98 million, respectively.

The good performance of these banks is a positive indicator of Nigeria’s economic stability and growth prospects.

Stakeholders believe that the inflow of capital into the banking sector shows that foreign investors are optimistic about the country’s financial institutions and their ability to effectively manage and increase investments.

The National Bureau of Statistics (NBS) report on capital imports into Nigeria in the first quarter of 2024 highlights the indispensable role of the banking sector in driving Nigeria’s economic development.

The inflow of funds into banks is likely to facilitate increased lending, support the expansion of businesses and stimulate economic activity in various sectors.

According to the NBS report, experts say the banking sector plays a major role in attracting foreign investment, with the sector seeing the largest capital inflow.

The report showed that the banking sector was the leading recipient of foreign capital, attracting $2,067.44 million. This constitutes 61.24 percent of the total capital imported into the country during the period.

Analysts at Lagos-based Afrinvest (West) Africa Limited noted that the banking sector (61.2%) attracted the most clients, followed by trade (14.7%) and manufacturing (5.7%).

“This is the first time since Q1:2023 that banking will lead other sectors. We believe that inflows into the banking sector partly reflect the impact of improved OMO issuance.

The increase in trade share to $494.5 million (surpassing the previous peak of $311.2 million in Q4 2021) can be attributed to the attractiveness of Nigerian exports due to the weaker naira.

“This conclusion is further supported by the upbeat foreign trade statistics for Q1 2024, which saw the trade surplus rise to N6.5 trillion, surpassing the 2023 peak of N5.1 trillion. In terms of distribution, capital inflows were limited to three states: Lagos ($2.8 million), Abuja ($593.6 million) and Ekiti ($1,275 million). This underscores the scale of reforms that the subnational governments (in support of the federal government’s efforts) need to implement to make their states investment-friendly if they ever intend to be fiscally independent,” the analysts said in a note to clients.

According to the statistics office, in Q1 2024, total capital imports into Nigeria stood at $3,376.01 million, which is higher than the $1,132.65 million recorded in Q1 2023, an increase of 198.06 percent. Compared to the previous quarter, capital imports increased by 210.16 percent from $1,088.48 million in Q4 2023.

Portfolio investment ranked first with USD 2,075.59 million, accounting for 61.48 percent, followed by other investments with USD 1,181.25 million, accounting for 34.99 percent. Foreign direct investment was the least important, accounting for USD 119.18 million (3.53 percent) of total capital imports in Q1 2024.

Capital imports during the reference period came mainly from the United Kingdom, which amounted to USD 1,805.83 million, which accounted for 53.49 per cent of the total capital imported, followed by South Africa with USD 582.34 million (17.25 per cent) and the Cayman Islands with USD 186.21 million (5.52 per cent).

Among the three states that recorded capital imports during the quarter, Lagos State remained the top destination with $2,782.41 million, which accounted for 82.42 per cent of the total capital imported, followed by Abuja (FCT) with $593.58 million (17.58 per cent), and then Ekiti State with $0.01 million.

READ ALSO: Atiku blames government for failure over kidnapping of journalists, others