- Ten Nigerian banks report a collective profit of N4.2 trillion in the first nine months of 2024, up 102.81% from last year
- Major contributors include Zenith Bank, GTCO, Access Bank, and UBA, benefiting from rising interest rates and elevated yields on fixed-income securities
- The Organised Private Sector raises concerns about the implications of high interest rates on business operations and potential increases in bad loans
Ten Deposit Money Banks in Nigeria have collectively recorded approximately N4.20 trillion in profits during the first nine months of 2024.
This figure marks a remarkable 102.81 percent increase from the N2.07 trillion reported in the same period last year, according to an analysis of their quarterly financial statements.
The banks achieving this significant profit surge include major Tier-1 institutions such as Zenith Bank, Guaranty Trust Holding Company (GTCO), Access Bank, United Bank for Africa (UBA), and FBN Holdings.
Other contributors to this financial upswing are Stanbic IBTC Holdings, Sterling Bank, Ecobank, Wema Bank, and Jaiz Bank.
The impressive results come against the backdrop of a high interest rate environment, as the Central Bank of Nigeria (CBN) has systematically raised the benchmark interest rate throughout the year, increasing it from 18.75 percent to 27.25 percent over five Monetary Policy Committee meetings.
This strategy aims to combat inflation and stabilise the devalued naira. Additionally, elevated yields on fixed-income securities, which banks heavily invest in, have also bolstered their profitability.
Recent reports from the country’s largest banks indicate that net interest income has more than doubled in this period. Access Bank, the largest bank by assets, reported a staggering 116.65 per cent rise in net interest income, increasing from N389.96 billion to N844.84 billion year-on-year.
Among the 10 banks, GTCO led with a profit of N1.09 trillion, a dramatic 195 per cent increase compared to its performance in September 2023. Zenith Bank followed closely with a profit after tax of N827.28 billion, nearly doubling its previous year's figure of N434.17 billion.
Other notable profits included FBN Holdings at N533.88 billion, UBA at N525.31 billion, and Ecobank with N491.88 billion. Access Bank reported a profit of N457.75 billion, while Stanbic IBTC saw a profit rise to N182.87 billion from N109.25 billion.
Sterling Bank and Wema Bank recorded profits of N27.45 billion and N52.73 billion, respectively, and Jaiz Bank, a non-interest institution, reported an impressive 182.39 per cent increase in profit, reaching N18.11 billion.
While banks are reaping the rewards of rising interest rates, the Organised Private Sector is expressing concern over the implications for their operations. Following the CBN's fifth rate hike this year, industry leaders fear that sustained increases may exacerbate issues of bad loans within Deposit Money Banks.
Dr. Femi Egbesola, National President of the Association of Small Business Owners of Nigeria, lamented the impact of rising interest rates on manufacturers and real sector players already struggling with high operational costs.
He warned, “This will definitely push up further the cost of doing business and ultimately, the cost of goods and services. The manufacturing sector may contract more as fund liquidity and profitability will surely reduce.”
Similarly, the Lagos Chamber of Commerce and Industry has called for a balanced approach to monetary policy, emphasising the need to control inflation while also addressing the negative effects on business operations and economic growth.
The chamber urged the government to enhance capital expenditure to stimulate business activities and support economic development.
Charges now apply: Fintechs to charge N50 on transactions above N10,000
Earlier, TheRadar reported that financial technologies (fintechs) in Nigeria have announced the deduction of N50 transfer levy on transactions above N10,000 on customers' personal or business accounts beginning Monday, September 9.
In a message to customers on Saturday, September 7, titled ‘FGN Electronic Money Transfer levy,’ Opay, one of the leading fintech companies in the country, said the levy complies with the regulations of the Federal Inland Revenue Service (FIRS).
