The Nigerian banking industry was birthed by the African Banking Corporation in 1892, followed by the Bank of British West Africa, in 1894.
Despite the failure of the ICB, the need for Nigerians to be financially included led to the birth of more indigenous banks.Within three years, two banks, Nigerian Farmers and Commercial Bank and the Nnamdi Azikwe-owned African Continental Bank, were established in 1947. While other companies were given a longer time to make the decision, banks were not, as they were deemed important to the materialisation of the policy.
The largest banks here, Barclays International and Standard and Chartered, agreed to increase Nigerian equity—already over the level of 40 per cent —to 60 percent. By contrast, the American banks were 100 per cent foreign owned. There were also instances of insider abuse such as granting of credit to dummy individuals and organisations, high rate of loan repayment default, especially by government parastatals.
The recapitalisation exercise did not only lead to the elimination of fringe players from the industry; it also brought about bigger banking institutions with a solid capital base that could play in the international market. The increased capital base encouraged banks to diversify into many new products and services which further drew more customers into the financial system.