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See Reasons Nigerian Banks Shut 229 Branches

Published by admin on January 4th, 2026.

See Reasons Nigerian Banks Shut 229 Branches

Nigeria’s banking sector recorded a sharp reduction in physical banking locations in 2024, with 229 branches shut nationwide as more customers embraced Point of Sale (POS) terminals and digital channels for everyday transactions.

Figures contained in the Central Bank of Nigeria’s 2024 Financial Sector Statistical Bulletin show that the total number of Deposit Money Bank branches dropped from 5,373 in 2023 to 5,144 in 2024. This decline occurred despite an increase in the number of licensed banks, which rose from 33 to 35 within the same period, highlighting the industry’s accelerating shift away from brick-and-mortar banking.

The data, which covers commercial, merchant, and non-interest banks across the 36 states and the Federal Capital Territory, indicate that electronic payment platforms—especially POS terminals—are rapidly replacing traditional banking halls. POS transaction volumes climbed from 9.85 billion in 2023 to 13.08 billion in 2024, representing a growth of about 33 percent.

Even more dramatic was the jump in transaction value. POS payments more than doubled year-on-year, rising from ₦110.35 trillion to ₦223.27 trillion. In contrast, ATM usage recorded only marginal growth. ATM transaction volumes increased slightly from 1.01 billion to 1.02 billion, while transaction value rose by just over three percent, from ₦28.21 trillion to ₦29.12 trillion.

The contraction in physical branches was uneven across the country. Lagos State remained Nigeria’s banking hub with 1,521 branches in 2024, although this figure was 11 fewer than the previous year. Ebonyi State experienced the steepest decline, losing 89 branches as its total fell from 120 to just 31 within a year.

Other states that recorded notable reductions included Niger, which lost 32 branches; Oyo, which closed 26; and Ekiti and Ondo, each shedding 18 branches. The Federal Capital Territory was not spared, with nine branches closing to bring its total to 391.

However, a handful of states saw modest expansion. Delta added six branches, Rivers gained eight, while Edo, Kaduna, and Kano each recorded an increase of eight branches. Smaller gains were also recorded in Katsina, Adamawa, Jigawa, and Kogi, suggesting that banks are now selectively expanding only in areas with strong commercial activity or population growth.

Industry experts say the growing dominance of POS terminals reflects deeper structural changes in Nigeria’s financial system. These include cash shortages, the rapid spread of agent banking, the rise of mobile wallets, and the convenience of accessing financial services closer to homes and marketplaces.

A 2025 KPMG West Africa Banking Industry Customer Experience Survey supports this trend, noting that customers are increasingly sensitive to service costs, reliability, and security. While trust remains a key factor in bank choice, tolerance for failed transactions, delays, and complex processes is declining—especially among small and medium-sized enterprises.

The report also found that fintech companies such as OPay and Moniepoint continue to outperform traditional banks in customer experience, particularly in transaction speed, ease of use, and service availability. Expanded POS networks and mobile wallets, according to KPMG, have positioned fintechs as primary channels for daily financial activity rather than mere alternatives to banks.

Despite higher POS usage, customers faced challenges during the 2024 festive period as agents significantly increased withdrawal charges, in some cases doubling fees to as much as ₦200 for a ₦5,000 withdrawal. Many bank ATMs were reportedly empty, leaving customers with little choice but to rely on POS operators.

In response, the Central Bank of Nigeria sanctioned nine Deposit Money Banks for failing to ensure cash availability during the period, imposing fines totalling ₦1.35 billion. Each bank was fined ₦150 million, with the amounts deducted directly from their accounts with the apex bank.

The affected institutions include Fidelity Bank, First Bank, Keystone Bank, Union Bank, Globus Bank, Providus Bank, Zenith Bank, United Bank for Africa, and Sterling Bank