Nigerian Banks: Why Market Leadership Matters

Nigerian banking sector is relatively concentrated. Of the 21 players in the industry, the top-5 banks control more than 50% market share. The analysis below shows the implication of this market leadership on profitability. On the average, the top 5 banks (Tier 1 banks)  have an average Return on Average Equity (ROAE) of 21% vs. 16% for the Tier 2 banks in the financial year ended December 2013.

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