As lenders expand in size and scale to meet the demand of a $1 trillion economy, analysts at Proshare have warned of poor Asset and Liability Management (ALM) risks. This information was detailed in Proshare’s third edition of its Tier 1 Banks press statement report, presented in Lagos on Wednesday. The analysts who called for attention to macro and microeconomic risks, as seen in the United States of America (US) said poor asset and liability management (ALM) was a major contributor to the failure of several US banks, such as Silicon Valley, First Republic, and Signature Banks, in 2023.
Related Stories Divesting from fossil fuel could reduce Nigeria’s GDP by $30 billion – Afrexim Bank The $550 million investment in the Ubeta Field Development Project will boost Nigeria’s domestic gas supply “Poor asset and liability management (ALM) was a major contributor to the failure of several US banks, such as Silicon Valley, First Republic, and Signature Banks, in 2023,” they said. Nigeria’s GDP Looking at the Nigerian economy and banking sector, the Proshare analysts noted that Nigeria’s GDP in 2005 was N38.78 trillion and rose to 77.
94 trillion, roughly two times in 2023, suggesting an average annual growth rate of 3.55% in the last two decades. They stated, however, that between 2000 and 2005, bank equity sizes grew over ten times or by 1,150% from N2 billion to N25 billion.
According to them, for a decade and a half, banks have used ten times more equity in their b.