Leading Nigerian bank FCMB is seeking to convert its wholesale banking unit in Britain, FCMB UK, into a retail bank, as part of its push to grow its balance sheet and tap into non-institutional customers in Britain.

The bank’s group chief executive, Mr. Ladi Balogun, disclosed this in an interview with Reuters. He said the impact of the British strategy would not be immediate but would enable the lender to achieve incremental growth.

Balogun said the earnings contribution in naira terms from the British unit will be around 500 million naira ($1.64 million) for 2018. FCMB UK grew pre-tax profit by 250 percent to 300 million naira last year. “We’ve decided to slow down right now on asset growth and focus more on changing the mix of the asset and getting out some of the low margin upstream oil and gas business,” he said.

Balogun said that FCMB expects loan growth to be flat this year – down from last year’s 5.4 percent rise – as oil companies pay down debt.

He said the bank would focus on retail banking with a higher margin this year to make up for a drop in government bond yields as the lender may not be able to write large loans quickly enough to counter-balance repayments by oil firms.

The FCMB Group CEO said the economy was improving after Nigeria experienced its worst recession in a quarter of a century in 2016, which should boost consumers.

“We expect to see large repayments in the oil and gas sector this year. We agree that the (economy) will be improving but largely because of chunky paydowns, we don’t think we would be able to replace those quickly,” he told an analyst call.

“We are pushing more in the area of retail banking.”

FCMB group posted a 29.5 percent drop in 2017 pretax profit to 11.46 billion naira on Wednesday.

Balogun said the bank booked a 50 percent impairment of 2.3 billion naira on loans to debt-laden 9mobile, which is in talks with investors to take over the telecoms firm.

He said the bank expects non-performing loans to rise in the course of the year but would be within a regulatory target of five percent.

FCMB does not see a need to raise funds this year due to high funding costs, especially for borrowing in dollars, and would maintain a conservative dividend policy to improve its capital position.

Banking sources told Reuters last month that FCMB was among several lenders considering selling a Eurobond this year.

Shares in FCMB, which are up 62 percent so far this year, dropped 2.08 percent to 2.35 naira on Friday.

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