Guaranty Trust Bank Plc said interest rates for lending would continue to increase in 2021 amid increase in the Federal Government’s debt profile.
The Bank made the disclosure in a report titled ‘Nigeria and Banking Sector Themes for 2021’ released on Monday.
According to the report, experts expect the CBN to sustain its policy stance going into 2021 driven largely by the need to improve credit
flow to spur economic growth.
The report noted that: “the additional borrowings by the government as well as relatively lower OMO maturities into the system may result in a further increase in interest rates but not expected to be significantly higher than present levels.”
The report read further:
“We note the impact of the second wave of
the pandemic but also do not foresee widespread lockdowns as was with the first wave as effective vaccines are being rolled out and medical practitioners have a better understanding of the virus.
“A huge positive for the industry was the massive customer migration to digital platforms as a result of movement restrictions imposed by the government which drove better-than-expected fees from digital channels.
“In addition, the revaluation gains on the back of significant naira devaluation are expected to drive further improvement in non-interest revenue for
“On the cost side, the work-from-home (WFH) policy afforded most firms the rare opportunity of re-evaluating their cost profile and make amends where necessary.
“We expect OPEX to remain contained in 2021, with travel expenses and other operational costs expected to remain lower relative to 2019 levels.”