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Speaking to CNBC Africa, Onyeagwu stated that one of the
most immediate impacts of the Pandemic is the fact that the oil price crash
will have negative implications for banks’ revenue targets.
“In terms of banking, the drop in the price of crude is
affecting directly the exposure that banks have created in the oil and gas
sector. Revenues are challenged now, no doubt. And you have a situation where
revenues are challenged, the obvious next step will be for you to restructure,”
Onyeagwu stated.
He also noted that the situation will remain very
challenging until there is a vaccine to remedy the virus. For now, efforts are
being made to flatten the curve by preventing further spread of the virus. And
while this effort continues, banks are not expecting much growth. He said:
“In this moment too, as far as banking is concerned, we are
also going to experience the fact that we don’t expect a situation where there
will be growth in loan books. Loan growth will be challenged. World Bank’s
screen now is on different sectors of the economy and how the COVID impacts
them restructuring the loan book. The Central Bank has even given a
dispensation to this effect, asking banks to come up with the various proposals they have for the
restructuring of the loan book.”
He then disclosed that there have been some positives
arising from the COVID-19 pandemic. According to him, Zenith Bank has recently
witnessed a massive increase in the number of businesses being transacted
through various digital channels. Apparently, customers who were hitherto
disinterested in digital banking are now showing interest.
The Zenith Bank CEO then clarified that the pandemic is not
only affecting the banking industry alone. It affects every aspect of the
economy, he said.
“In a situation where you have a lockdown of the economy, if
you lock down all the agents, there is no way business volumes will not be bad
or impacted.”
Zenith Bank’s profit before tax rose by 3% to N58.7 billion
in the first quarter of 2020, according to an earlier article published by
Nairametrics.
