President Bola Tinubu has urged Nigeria banks to prioritize economic growth and the welfare of Nigerians over huge profits, insisting that strong profits alone are no longer enough.
The President spoke at the opening of the 19th Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria (CIBN) in Abuja, yesterday.
Represented by the Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, President Tinubu said banks must move beyond celebrating huge profits and shareholder dividends to financing productive sectors of the economy.
He said: “For years, we have measured financial institutions by balance-sheet growth, profitability and shareholder returns. These remain important. But we must increasingly ask: what is the financial system doing for the real economy?
“A resilient banking system cannot exist indefinitely where businesses cannot obtain affordable credit, manufacturers struggle to finance expansion, and millions of productive MSMEs remain outside the formal financial system.
“This requires us to rethink risk. The safest loan on an individual bank’s balance sheet is not necessarily the best allocation of capital for the economy.”
The President said the economy had returned to a path of stability, with growing investor confidence, but stressed that macroeconomic stability alone would not guarantee prosperity.
“Economic stability has returned. Credibility is rising. And prosperity is coming.
“These improvements matter. But we must not mistake macroeconomic stability for economic prosperity. Stability is the foundation; prosperity is the destination.
“The current phase of our reform journey is about accelerating the conversion of stability into investment, investment into production, production into jobs, and growth into improved living standards.”
He said the next phase of Nigeria’s development should not merely produce bigger banks with larger balance sheets, but a larger and more productive economy.
“Capital must reach ideas, finance must enable enterprise, technology must expand opportunity, risks must be intelligently shared, and growth must translate into better lives for our people,” he said.
President Tinubu added that the banking and financial services industry would be central to achieving that objective and urged banks to fully embrace their financial intermediation role.
He said the ongoing bank recapitalisation exercise must deliver more than stronger balance sheets.
“It must translate into capital formation in the real economy, financing Nigerian businesses as they expand across Africa and pursue our ambition of a one-trillion-dollar economy.
“A bigger bank that does not finance a more productive economy is a suboptimal outcome. We must build a system that finances potential and opportunity rather than quick gains for the privileged,” he said.