Nine of Nigeria’s leading banks collectively earned N14.26 trillion in interest income in 2024, a 119.55 per cent increase from N6.49 trillion recorded in 2023, according to their audited financial statements filed with the Nigerian Exchange Limited.
The banks—First Holdco (FirstBank), Guaranty Trust Holding Company (GTCO), Zenith Bank Plc, United Bank for Africa (UBA), Access Holdings, FCMB Group, Fidelity Bank, Stanbic IBTC Holdings, and Wema Bank—benefitted significantly from a high-interest rate environment spurred by the Central Bank of Nigeria’s (CBN) monetary tightening.
Despite this windfall for the financial sector, Nigeria’s real economy has taken a hit.
The Manufacturers Association of Nigeria (MAN) said manufacturers spent N1.3 trillion on interest payments in 2024, with the cost of energy nearly matching at N1.2 trillion.
MAN President Francis Meshioye described the current cost of funds, ranging between 30–37 per cent, as “unsustainable” for businesses.
Interest Income BreakdownThe banks which posted the following increases in interest income are Access Holdings: N3.11tn (98.69 per cent), Zenith Bank: N2.72tn (137.74 per cent), First Holdco: N2.39tn (155 per cent), UBA: N2.37tn (120 per cent), GTCO: N1.32tn (148 per cent), Stanbic IBTC: N566bn (109 per cent), Fidelity Bank: N803.05bn (85.03 per cent), FCMB Group: N621.81bn (75.16 per cent) and Wema Bank: N354.63bn (91.03 per cent).
While First Holdco recorded the highest percentage growth, Zenith Bank generated the highest actual increase in income, with an additional N1.58tn compared to 2023.
The surge in interest income followed the CBN’s decision to hike the Monetary Policy Rate (MPR) by 875 basis points—from 18.75 per cent in 2023 to 27.50 per cent in 2024—in a bid to control inflation.
Nigeria’s inflation rate reached 34.80 per cent by December 2024, compared to 28.92 per cent in the same month of the previous year.
Financial experts say the monetary policy, while effective at controlling inflation, is choking the real sector.
“Access to affordable credit is drying up,” said Tunde Ajayi, a senior analyst at Financial Derivatives Company.
“Banks are prioritising government securities and large corporates, leaving SMEs and farmers in the cold.”
SMEs, Farmers Left Behind
Agricultural finance consultant Ngozi Uko warned that rural farmers are particularly hard-hit. “Credit for smallholder farmers has virtually disappeared, and food inflation now exceeds 35 per cent , driving more Nigerians into poverty,” she said.
According to the National Bureau of Statistics, over 133 million Nigerians are living in multidimensional poverty.
Financial experts say the current structure, which enriches banks while starving the productive sectors, is deepening inequality and threatening long-term economic stability.
Meshioye urged banks to reconsider their profit drive, “If you kill the place you make the money from, how will you survive?”
He said, “Manufacturers spent about N1.3tn on interest rate; the cost of funds last year, 2024, and that is huge.
“Next is the cost of energy, which was about N1.2tn. It’s between 30 and 35 per cent for the cost of funding and 30-40 per cent for the cost of energy.
“The fund that we use to pay for power is charged at around 35 per cent. We are paying 35 per cent for funds to pay for power. Some are even paying 37 per cent. How do you survive this?
“These two are very important things to address to be sure that we become competitive. Have we thought of getting long-term funding for manufacturers or businesses? We need to think outside the box.”
Meshioye urged the banks to tone down their drive for profit, stressing that the high interest rates were stifling manufacturers.
“It’s very clear that if we want to achieve anything meaningful, we must look at infrastructure, particularly power.
“We have the power to do so many things. We just need the will and do not always aim to make overly ambitious profits.
“If you kill the place you make the money from, then how will you survive?” he challenged the banks.
