[lumidii]

The very basic function of banks is to act as financial intermediaries in an economic system. Channelling funds from surplus sectors at a cost, into deficit sectors at a premium, and making a profit in the process.

It is well known that Public sector is the biggest source of funds, Oceanic keyed into that a long time ago. Not only FG allocations as some one noted above, but also Public Sector collections franchise like Taxes, Duties, Levies; Parastatal bills eg NEPA, NITEL, MTEL; and Fees like WAEC, JAMB, NECO etc. Other banks with wider branch network turned up their noses at such, because they didnt want their banking halls clogged with customers, but Oceanic identified the untapped market and moved in big time. Even First Bank was paying approx N50M in WHT on div through a less fancied competitor(same oceanic) in the late 90's. Ditto UBN, UBA and their registrars dept. The result was the top four had their market share eroded by the emerging banks. The bank was collecting billions monthly, and just imagine the float income, before remmittances were made to the authorities.

I saw the charts, and Oceanic was always at the top of the list.

The fact is that First Bank and Union Bank have very cheap cost of funds, from over a century of being in business, along with the goodwill and stability that earns, coupled with the dormant a/cs in their books. New entrants can never build that, but they can be innovative, or at best, acquire it - as in STB/UBA. Even UBN had to starve off advances from Elumelu. As it stands, i'm of the opinion that another phase of acquisitions is in the offing, as the CBN boss has said three of the current banks are struggling.

The Banker magazine must have had its own criteria for assessing the banks, and it is entitled to do that. Its left for us to decide whether we attach any importance to that or not.

Congrats to Oceanic, and the Ibru clan. Thanks to Uche, for bringing this to us.