Despite economic headwinds and rising inflation, nine of Nigeria’s leading banks earned a staggering N14.26 trillion in interest income from loans in 2024 marking a 119.55% increase from the N6.49 trillion recorded the previous year.
The surge in earnings was disclosed in the audited financial statements of the banks Access Holdings, Zenith Bank, First HoldCo (FirstBank), UBA, GTCO, FCMB Group, Fidelity Bank, Stanbic IBTC, and Wema Bank filed with the Nigerian Exchange.
Top Performers
Access Holdings led the industry with N3.11 trillion in interest income, followed by Zenith Bank (N2.72 trillion) and First HoldCo (N2.39 trillion). In percentage growth, First HoldCo saw the largest jump at 155%, trailed by GTCO (148%) and Zenith (137.74%).
Other notable figures include UBA: N2.37tn (120% growth), GTCO: N1.32tn (148%), FCMB Group: N621.81bn (75.16%), Fidelity Bank: N803.05bn (85.03%), Stanbic IBTC: N566bn (109%) and Wema Bank: N354.63bn (91.03%)
Non-Performing Loans Still Yielding Returns
A portion of the interest income came from loans classified as non-performing. Zenith Bank accrued N18.25 billion in interest from impaired assets, followed by Fidelity Bank (N8.10 billion) and UBA (N4.26 billion).
Economic Strain on Manufacturers
While banks posted record profits, Nigeria’s real sector struggled. The Manufacturers Association of Nigeria (MAN) reported that its members spent over N1.3 trillion servicing loans and another N1.2 trillion on energy costs in 2024. Lending rates reached as high as 37%, leaving many businesses unable to access credit.
Francis Meshioye, MAN President, warned of the long-term implications “If you kill the source of your profits, how will you survive? We need to rethink our financial model.”
Rising Interest Rates Deepen Poverty
In a bid to tame inflation, the Central Bank of Nigeria hiked the Monetary Policy Rate from 18.75% to 27.5% in 2024 an increase of 875 basis points. Inflation soared to 34.8% by year-end, with food inflation exceeding 35%.
Analysts say the high rates are choking small businesses and worsening poverty. Tunde Ajayi of Financial Derivatives Company remarked “Banks are earning record profits while the real economy is gasping. This is not sustainable.”
Ngozi Uko, an agricultural finance expert, echoed the concern “Farmers can’t get credit. Food prices are skyrocketing. Hunger is rising.”
Call for Reform
As banks continue to profit from high-yield loans and government securities, stakeholders are calling for reforms that ensure broader access to affordable credit, especially for small businesses, farmers, and manufacturers.
Without such reforms, experts warn, Nigeria risks deepening its economic inequality and stifling long-term growth.
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