Nigerian banks, bolstered by increased capital and stabilized earnings following a period of high profits, are re-evaluating strategies for investing in higher-growth markets. Zenith Bank,a key player in the Nigerian financial sector,is actively expanding its international presence.
Zenith Bank: Overview and International Operations
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Zenith bank is a publicly traded financial institution listed on both the Nigerian Exchange and the London Stock exchange. Zenith Bank’s operations encompass corporate, commercial, retail, and investment banking services. The bank currently maintains an international footprint across several countries.
As of December 31, 2023, Zenith Bank operates in the United Kingdom, Ghana, Sierra Leone, The Gambia, the United Arab Emirates, and China. Zenith Bank’s 2023 Annual Report details its international subsidiaries and thier financial performance.
Nigerian Banking Sector Capital Buffers
Nigerian banks have significantly strengthened their capital adequacy ratios in recent years. The Central Bank of Nigeria (CBN) implemented stricter capital requirements to enhance the resilience of the banking sector. these requirements aim to protect depositors and maintain financial stability.
In October 2023, the CBN announced new minimum capital requirements for banks, effective April 1, 2024, categorized by license type. The CBN’s circular outlines these requirements, with commercial banks with international authorization needing ₦25 billion (approximately $33 million USD as of January 29, 2026).This increase necessitates banks to raise additional capital or consolidate.
Windfall Gains and Stabilizing Earnings
Nigerian banks experienced substantial windfall gains in recent years due to revaluation of foreign currency assets and increased lending activities. Though, these gains have begun to normalize as economic conditions stabilize.
According to Proshare’s H1 2023 Banking Sector Review, the sector’s profitability was driven by gains from revaluation and increased interest income, but future growth is expected to be more moderate. Zenith Bank reported a profit after tax of ₦262.6 billion (approximately $347 million USD as of January 29, 2026) for the first half of 2023, demonstrating strong performance but also indicating a potential shift towards more sustainable earnings.
Expansion into Higher-Growth Markets
With stronger capital positions,Nigerian banks are now looking to deploy funds into markets offering higher growth potential. This includes expanding existing operations and entering new territories.
Zenith Bank’s expansion into the UAE and China reflects this strategy. The bank’s annual reports highlight the growth in these international markets, especially in trade finance and serving Nigerian businesses operating abroad. The focus is on leveraging Nigeria’s trade relationships and diaspora populations to drive revenue growth.
