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Nigeria’s banking industry is witnessing a major shift from traditional branch banking to electronic platforms, with 229 physical bank branches shutting down in just one year as customers increasingly rely on Point of Sale (POS) terminals for everyday transactions.
This trend is highlighted in the Central Bank of Nigeria’s (CBN) 2024 Financial Sector Statistical Bulletin, which shows that the number of Deposit Money Bank branches across the country fell from 5,373 in 2023 to 5,144 in 2024. Despite this contraction in physical presence, the total number of licensed banks rose from 33 to 35 during the same period, underscoring the rapid migration from brick-and-mortar operations to digital banking.
The bulletin covers branches and cash centres of commercial, merchant, and non-interest banks across all 36 states and the Federal Capital Territory (FCT).
Electronic payments, particularly through POS channels, have become the go-to option for many Nigerians. POS transaction volumes jumped from 9.85 billion in 2023 to 13.08 billion in 2024, representing a 33% year-on-year increase. Even more striking was the surge in the value of POS transactions, which more than doubled from N110.35 trillion to N223.27 trillion, an increase of N112.93 trillion or 102%. By comparison, ATM usage grew at a much slower pace. ATM transaction volumes edged up from 1.01 billion to 1.02 billion, a growth of less than 1%, while the value of ATM withdrawals increased modestly from N28.21 trillion to N29.12 trillion, an increase of just over 3%.
These figures underline a clear reality: POS terminals are now far more central to everyday payments than cash withdrawals or visits to bank branches.
Branch closures vary by state
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The contraction in bank networks was not uniform across the country. Lagos State, Nigeria’s banking hub, retained the highest number of branches with 1,521 in 2024, though it recorded a small decline of 11 branches from the previous year. In stark contrast, Ebonyi State suffered the largest reduction, losing 89 branches, dropping from 120 in 2023 to just 31 in 2024.
Other states that saw significant closures included Oyo (-26), Niger (-32), Ekiti (-18), and Ondo (-18). Even major commercial centers were affected: the FCT lost nine branches, from 400 to 391, while Anambra, Ogun, Cross River, and Plateau also recorded notable reductions.
However, not all areas shrank. Some states experienced branch growth in line with rising commercial activity and population. Delta State added six branches, Rivers increased from 272 to 280, while Edo, Kaduna, and Kano each gained eight new branches. Katsina, Adamawa, Jigawa, and Kogi also saw modest expansions.
A changing financial landscape
The data reflects a banking system in transition. “Banks and their customers in Nigeria are now operating within a rapidly changing financial system, where new regulations and technological adoption are forcing lenders to rethink how services are designed and delivered,” analysts note.
As more Nigerians embrace electronic payments, banks are reducing costly physical branches while investing in digital infrastructure. While branch closures may inconvenience some customers, the surge in POS and other electronic channels demonstrates that Nigeria’s banking system is adapting to a cash-lite, technology-driven future.
