Five leading banks in Nigeria have collectively generated N9.88 trillion in interest income during 2025. This significant amount highlights the ongoing profitability banks are experiencing due to elevated interest rates, even as the Central Bank of Nigeria (CBN) has initiated a subtle easing of its monetary policy.
The combined earnings were reported from the audited financial results of Zenith Bank Plc, Wema Bank Plc, Stanbic IBTC Holdings Plc, Ecobank Transnational Incorporated, and Guaranty Trust Holding Company Plc (GTCO). This figure represents a notable increase of 27.7 per cent compared to the N7.74 trillion earned in 2024.
This robust financial performance was achieved while the CBN has been adjusting its Monetary Policy Rate (MPR) downwards to 27 per cent, a move intended to combat inflation and stabilise the nation's currency.
An examination of the data shows that the prevailing high-interest rate environment has continued to fuel bank revenues derived from loans, advances, and investment securities. Concurrently, these rates have also escalated borrowing costs for both businesses and individual consumers.
Within the group, Zenith Bank reported the highest interest income, reaching N3.67 trillion, an increase of 35 per cent from the previous year.
Ecobank followed with N3.19 trillion in interest income. GTCO posted N1.65 trillion, marking a 23 per cent rise from its 2024 earnings. Stanbic IBTC's interest income stood at N787.05 billion, a 39 per cent jump, while Wema Bank recorded N576.07 billion, reflecting a substantial 62.4 per cent year-on-year growth.
GTCO, in its investor communications, attributed its increased earnings to growth in its income-generating assets and better yields from its loan portfolio.
However, the bank also noted a reduction in its non-interest revenue, which was primarily influenced by a decline in gains from fair value adjustments and derivatives.
Industry figures indicate that Nigeria's average maximum lending rate saw a slight decrease to 29.32 per cent in December 2025, down from 29.71 per cent in the same period of 2024. The rate had previously peaked at 30.50 per cent in February 2025 when the MPR was 27.50 per cent.
Similarly, the prime lending rate, which typically applies to the most creditworthy borrowers, also decreased to 18.02 per cent from 18.56 per cent in 2024.
Financial market analysts have connected the substantial increase in interest income to the consistent monetary tightening implemented by the CBN and other African central banks starting in 2024. This strategy is aimed at addressing persistent inflation and currency exchange rate fluctuations.
According to Mr. Tajudeen Olayinka, an investment banker, the high-interest rate policy serves a dual purpose: attracting foreign portfolio investment and bolstering foreign reserves, while also working to stabilise the exchange rate.
He further explained that the repricing of financial assets across various markets has consistently driven up yields on loans and securities, thereby sustaining the upward trend in bank profits.
CBN Governor, Yemi Cardoso, has previously acknowledged that inflation remains at a high level, influenced by factors such as increased energy costs, demand for foreign exchange, and persistent structural economic challenges.
Cardoso, however, expressed confidence that current government initiatives focused on enhancing domestic production are expected to alleviate price pressures over time.
For the present, experts observe that a dichotomy persists. While banks continue to profit from high yields on their assets, the wider economy faces a squeeze on credit availability. This situation could potentially impede economic growth and job creation if interest rates remain at their current high levels for an extended duration.
Comments (0)
You must be logged in to comment.
Be the first to comment on this article!