The diversification of Nigerian banks out of its own borders using their strengthened balance sheets may be slowing due to the credit crisis. Ten out of the 24 licensed commercial banks in Nigeria now own at least one full-fledged licence in a foreign country. They are First Bank of Nigeria, FBN, Union Bank of Nigeria, UBN; Bank Intercontinental; Access Bank; Platinum Habbib Bank; Bank PHB, the United Bank for Africa, UBA, Guaranty Trust Bank, GTB, Zenith Bank, Oceanic Bank and FinBank. Nigerian bankers are breathing a sigh of releif that they came late to the international leverage party and are now re-evaluating their strategy.
The trend to own international branches was started by the problems Nigerian businesses have in transfering money internationally following clamp downs on international money laundering. This will not go away. By opening branches, the banks faciliated the acquisition of property and eliminated the cost of engaging a correspondent bank.
Perhaps now, the bank will use their balance sheets to domestic finance the oil and gas sector!