In 2024, nine leading Nigerian banks pulled in a staggering N14.26 trillion in interest income from loans, according to their audited financial statements filed with the Nigerian Exchange. This marks a whopping 119.55% jump from the previous year’s N6.49 trillion.
The banks include First Holdco, Guaranty Trust Holding Company (GTCO), Zenith Bank, United Bank for Africa (UBA), FCMB Group, Fidelity Bank, Stanbic IBTC, Access Holdings, and Wema Bank.
While banks celebrated record profits, manufacturers and small business owners were left reeling. Rising interest rates led to borrowing costs of about N1.3 trillion, a burden that’s weighing heavily on Nigeria’s real sector.
Breakdown of Interest Income (2024):
Access Holdings: N3.11tn (up 98.69%)
Zenith Bank: N2.72tn (up 137.74%)
First HoldCo: N2.39tn (up 155%)
UBA: N2.37tn (up 120%)
GTCO: N1.32tn (up 148%)
Stanbic IBTC: N566bn (up 109%)
FCMB Group: N621.81bn (up 75.16%)
Fidelity Bank: N803.05bn (up 85.03%)
Wema Bank: N354.63bn (up 91.03%)
In actual earnings, Zenith Bank topped the chart with N1.58tn in new income, closely followed by Access Holdings and First HoldCo.
But here’s the twist—some of these earnings were from non-performing loans. For example, Zenith Bank declared N18.25bn in impaired financial assets, while UBA and Fidelity Bank had N4.26bn and N8.10bn in interest income on bad loans, respectively.
This surge in banking profits is closely tied to the Central Bank of Nigeria’s aggressive monetary tightening. The Monetary Policy Rate (MPR) was increased by 875 basis points, jumping from 18.75% in 2023 to 27.50% by end of 2024, all in a bid to fight inflation which hit 34.80% in December 2024.
However, this monetary policy came at a price. Francis Meshioye, President of the Manufacturers Association of Nigeria, lamented that businesses are being crippled by borrowing costs of up to 37%, especially for essential expenses like power.
Experts fear that while banks continue to post massive profits, Nigeria’s real economy is being strangled. With interest rates now between 28% and 35%, small businesses and farmers are finding it almost impossible to access credit.
Tunde Ajayi, a senior analyst at Financial Derivatives Company, described the situation as a dangerous distortion of Nigeria’s financial system—where profits are prioritized over growth.
Ngozi Uko, an agricultural finance expert, added that smallholder farmers are hardest hit. Lack of access to loans has led to a drop in agricultural output, contributing to the over 35% food inflation rate, and pushing more Nigerians into poverty.
With over 133 million Nigerians already living in multidimensional poverty, analysts are calling for a drastic rethinking of Nigeria’s financial strategy—one that balances bank profits with real sector growth.
What’s your take on the profit boom in the banking sector while manufacturers struggle? Share your thoughts in the comments and stay updated by following NIGPOST for more impactful stories.
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