Things aren’t looking too rosy for Nigeria’s banking sector. According to United Kingdom-based advisory firm Ernst & Young Global Limited, Nigeria’s banking environment is still challenging, as also in some countries in Africa, reports Punch. Despite this, the future of the banks is positive. The report indicates that Nigerian banks are strongly optimistic about prospects, with 75 percent expecting strong growth.

Ernst & Young also made some suggests as to how the system in Nigeria can work better. “As a result, the research and advisory company advised operators to understand the sector’s opportunities and overcome its challenges in order to emerge more profitable,” reports Punch.

According to the Director, Banking and Capital Markets, Ernst and Young,  Steven Lewis, Nigeria’s banks must look to continually understand products and services the customers are looking for in order to meet their needs and demands.

“Nigerian banks are not looking at international potentials. The banks are focusing more on the domestic market and how they can strengthen it. South African banks are focusing currently on expansion, but the Nigerian banks are paying attention on domestic growth,” said Lewis while presenting a report entitled “Emerging Markets Banking Barometer.”

“According to the report, sub-Sahara Africa is the world’s most profitable banking market, as measured by returns on assets,” reports Punch.

Lewis also remarked on efforts being made to reach the unbanked by some African banks. Nigeria had the lowest domestic credit to GDP ratio of all the RGMs, which suggests a significant scope for lending growth.