Five tier-1 Nigerian banks—Zenith Bank Plc, United Bank for Africa (UBA) Plc, Access Holdings Plc, Guaranty Trust Holding Company Plc (GTCO), and First Bank Holdings Plc (First Holdco), have reported net interest income exceeding N1 trillion each for the 2024 financial year.
Analysis of these lenders revealed that their combined net interest income rose to N6.9 trillion in 2024 from N3.12 trillion in the same period of 2023.
According to their financial results, Zenith Bank recorded the highest net interest income, growing to N1.72 trillion in 20024 from N736 billion in the previous year. UBA followed closely with N1.53 trillion, up from N707 billion. First Holdco reported N1.4 trillion, compared to N546 billion in 2023. Access Holdings posted N1.26 trillion, up from N695 billion, while GTCO reported N1.05 trillion, rising from N436 billion.
“Banks’ net-interest income, which is the core income from loans and advances to customers, investment securities, and cash and cash balances, is mostly driven by interest rate hikes,” a Lagos-based analyst said.
Net interest income is the difference between the interest earned by a bank and the interest it pays to depositors. The surge in earnings is attributed to the high-yield environment fostered by CBN’s monetary tightening aimed at curbing inflation and attracting foreign capital.
Since Governor Olayemi Cardoso assumed office, the Monetary Policy Committee (MPC) of the CBN has raised the Monetary Policy Rate (MPR) six consecutive times. However, during its 299th meeting on February 20, 2025, the committee decided to retain the benchmark MPR at 27.5 percent, citing the recent rebasing of Nigeria’s Consumer Price Index (CPI).
Following the CPI rebasing by the National Bureau of Statistics (NBS), Nigeria’s headline inflation rate dropped significantly to 24.5 percent year-on-year in January 2025, compared to the pre-rebasing rate of 34.8 percent in December 2024. As of March 2025, inflation eased slightly to 24.23 percent.
Analysts at Comercio Partners said that the retention of the asymmetric corridor at +500/-100 bps around the MPR underscores a commitment to maintaining flexibility while addressing inflation volatility.
The CBN also retained the Cash Reserve Ratio (CRR) for commercial banks by 500 basis points to 50.00 percent and for merchant banks by 200 basis points to 16.00 percent.
Speaking at a monetary policy forum alongside Nobel laureate Dr. James Robinson, Governor Cardoso emphasised the CBN’s commitment to a disciplined and transparent approach to monetary governance.
“We inherited a crisis of confidence, but we chose a different path. We’re not turning back,” Cardoso stated, earning the approval of financial leaders and members of the Nigerian diaspora present at the event.
While the banking sector reaps the benefits of the rate hikes, the manufacturing industry has raised concerns over the policy’s adverse effects. At a recent CBN and Bankers’ Committee Town Hall in Lagos, Francis Meshioye, President of the Manufacturers Association of Nigeria, disclosed that manufacturers spent approximately N1.3 trillion on interest payments in 2024, with energy costs consuming an additional N1.2 trillion.
He added that financing accounted for 30–35 percent of total production costs, while energy expenses consumed 30–40 percent, putting immense pressure on manufacturers’ bottom lines.
In terms of year-on-year percentage growth in net interest income, First Holdco led the pack with a 156.4 percent increase, followed by GTCO at 140.8 percent, and Zenith Bank at 133.6 percent.
