Nigeria’s top-tier lenders raked in about N14.72 trillion in interest income during the first three quarters of 2025, fuelled by a sustained high-interest-rate environment, The PUNCH reports.
An analysis of the unaudited financial statements of nine leading financial institutions listed on the Nigerian Exchange Limited (NGX) showed a 27.68 per cent rise in aggregate interest income from N11.53 trillion recorded in the same period of 2024.
The banks reviewed include Access Holdings Plc, First HoldCo, Zenith Bank Plc, United Bank for Africa, Guaranty Trust Holding Company, Stanbic IBTC Holdings, Sterling Financial Holding Company, Wema Bank, and Ecobank Transnational Incorporated.
According to the Corporate Finance Institute, interest income represents money earned from lending activities — including loans, advances, investment securities, and deposits.
Access Holdings led in absolute figures, reporting a 21.11 per cent increase in interest income to N2.90 trillion from N2.39 trillion in Q3 2024. Zenith Bank followed closely, posting N2.74 trillion, a surge of 40.77 per cent from N1.95 trillion.
Ecobank reported a 20 per cent growth to N2.33 trillion, while First HoldCo earned N2.29 trillion, up from N1.63 trillion, reflecting a 40.38 per cent increase. Together, these four banks accounted for the bulk of the sector’s interest income during the period under review.
Zenith Bank recorded the largest year-on-year absolute increase, adding N793.84 billion, followed by First HoldCo, which gained N659.37 billion.
GTCO posted a 25.56 per cent rise to N1.23 trillion, while UBA grew by 10.08 per cent to N1.98 trillion, the lowest growth rate among the nine lenders.
Wema Bank recorded the most significant percentage growth — 72.65 per cent — with interest income rising to N396.95 billion from N229.91 billion a year earlier.
Stanbic IBTC Holdings also posted robust performance, growing by 37.24 per cent and adding N158.53 billion in new interest income, above the average industry growth rate of 27.67 per cent.
Sterling HoldCo maintained strong momentum, increasing by 38.73 per cent to N262.42 billion from N189.16 billion, with loans and advances remaining its top revenue source.
Analysts attribute the impressive figures to elevated benchmark interest rates, which boosted banks’ core earnings from loans, investment securities, and cash balances.
At its September 2025 meeting, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) implemented a surprise 50 basis-point rate cut, reducing the Monetary Policy Rate (MPR) to 27.00 per cent — the first cut in years.
The committee also adjusted the Cash Reserve Ratio (CRR) for commercial banks to 45 per cent, introduced a 75 per cent CRR on non-TSA public sector deposits, and retained the liquidity ratio at 30 per cent.
CBN Governor Olayemi Cardoso explained that the decision was driven by recent disinflation momentum, noting that August recorded the sharpest decline in inflation in five months.
Despite the rate cut, CBN data showed that lending rates remained high, with the maximum lending rate rising to 29.84 per cent in September. However, credit to the private sector fell to N72.53 trillion from N75.88 trillion in August, indicating weaker loan demand.
Meanwhile, Moody’s Investors Service warned that the CBN’s rate cut could squeeze bank margins. The global ratings agency cautioned that lower yields on loans and securities may outpace declines in deposit costs, eroding profitability unless loan volumes grow.
According to Moody’s, net interest income accounted for 62 per cent of Nigerian banks’ operating income in 2024, adding that the CRR reduction offered only limited relief to the sector.
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