Stanbic IBTC is topping the list of preferred banks for capital importation into Nigeria for the first 9 months of 2024.
This is according to capital importation data from the central bank of Nigeria which shows the bank leading the pack with about $2 billion of capital importation through banks.
The amount represents about 28% of total capital importation passing through commercial banks for the year in view.
Capital importation which includes foreign direct investments and foreign portfolio investments is the total amount of foreign capital flowing into the country at any given time. All of the capital imported flow through commercial banks operating in Nigeria.
What the data is saying
Nigeria has attracted a total of $7.2 billion in the first 9 months of 2024 in total capital importation, compared to $2.8 billion the same period in 2023.
Nigeria has recorded an increase in capital importation in 2024 as central bank monetary policies increasing interest rates improved the perception of investment securities in the country.
While about 22 banks received foreign capital on behalf of their clients in 2024 only 4 banks received 85% of total capital imported.
- Rand Merchant Bank with its parent company in South Africa received about $1.1 billion or 16% of total capital imported in the year. The bank attracted just $263 million in the whole of 2023.
- Standard Chartered Bank is next with about 19.9% of total capital imported this year attracting $1.4 billion as of September 2024. This compares to $384 million received through the bank in 2023.
- Citibank Nigeria attracted about $1.5 billion representing 21.6% of total capital attracted in the year so far. The bank attracted just over $1 billion in 2023
- Stanbic IBTC is currently number one attracting $2 billion so far this year and representing 28.3% of total capital attracted this year so far. Stanbic IBTC has also surpassed the $919 million imported through the bank last year.
- The last time Stanbic IBTC imported over $2 billion as of the first 9 months of the year was in 2020.
- Stanbic IBTC is also on track to surpass Citibank as the number one bank in the country when it comes to attracting foreign capital a position held by the latter in 2023.
Local banks picking up
The data suggest most foreign investors prefer to import capital via banks that have strong foreign ownerships or affiliations in countries where foreign investments come from.
- For example, this year capital importation from UK and South Africa topped $3.4 billion and $1 billion respectively.
- Meanwhile, locally owned commercial banks in Nigeria picked up some capital with Access Bank, Zenith and First Bank attracting N410 million, N220 million and N120 million respectively.
- The rest of the FUGAZ, UBA and GTB both attracted $48.6 million and $11.5 million respectively.
Nigerian banks have recently increased their foray into other African countries with banks like Access Bank leading the pack via acquisitions and aggressive pan-African expansions.
What this means
The dominance of banks like Stanbic IBTC, Citibank, and Standard Chartered in capital importation highlights their critical role in facilitating foreign investments into Nigeria.
- These banks generate significant non-interest income through fees and foreign exchange conversions while boosting their liquidity positions.
- This allows them to finance more local businesses, support trade, and contribute to broader economic growth.
- Additionally, their strong foreign affiliations and adherence to international compliance standards make them attractive to global investors.
For local banks like the FUGAZ, the lower share of capital importation indicates room for growth in attracting foreign capital.
By improving international appeal and aligning with global investment standards, they could better compete with their foreign-affiliated peers and capitalize on Nigeria’s growing investment opportunities.