Nigerian banks’ profits soar by 102 percent

Ten major Deposit Money Banks in Nigeria reported a collective profit of N4.20tn for the first nine months of 2024, according to an analysis of their quarterly financial statements.

This reflects a 102.81 percent increase compared to N2.07tn in profits recorded during the same period in 2023. Key players include Tier-1 banks such as Zenith Bank, Guaranty Trust Holding Company, AccessCorp, United Bank for Africa, and FBN Holdings, along with Stanbic IBTC Holdings, Sterling Bank, Ecobank, Wema Bank, and Jaiz Bank.

The profit surge comes amid Nigeria’s high-interest rate environment, as the Central Bank of Nigeria (CBN) raised the benchmark interest rate at each of its five Monetary Policy Meetings this year, pushing it from 18.75 percent to 27.25 percent.

This series of hikes aims to curb inflation and support the naira, indirectly benefiting banks through increased yields on fixed-income securities. Notably, GTCO reported a profit of N1.09tn, a 195 percent increase, while other banks, including Zenith, UBA, and FBN Holdings, saw substantial rises in their net interest incomes.

However, while banks have profited, members of the Organised Private Sector (OPS) express concern over the impact on businesses.

Dr. Femi Egbesola, President of the Association of Small Business Owners of Nigeria, warned that the higher interest rates elevate operating costs and could lead to more bad debts as businesses struggle to meet loan obligations.

The Lagos Chamber of Commerce and Industry (LCCI) echoed these concerns, urging the government and CBN to consider policies that balance inflation control with the need to sustain economic growth and business operations.