Access, Zenith Lead as Nine Banks Rake in N14.7tn Interest Income

Nine of Nigeria’s leading banks have collectively earned N14.72 trillion in interest income in the first nine months of 2025, a significant surge driven by the country’s high-interest-rate environment.

The interim financial statements filed with the Nigerian Exchange Limited show a 27.68 per cent increase from the N11.53 trillion recorded in the same period last year.

The analysis covered the unaudited third-quarter results of Access Holdings Plc, Zenith Bank Plc, United Bank for Africa, Guaranty Trust Holding Company, Stanbic IBTC Holdings, Sterling Financial Holding Company, Wema Bank, Ecobank Transnational Incorporated, and First Bank Holdings.

Access Holdings, the parent company of Access Bank, led the group in absolute figures. Its interest income rose by 21.11 per cent to N2.90 trillion, up from N2.39 trillion in the third quarter of 2024. It was closely followed by Zenith Bank, which reported a substantial 40.77 per cent growth, bringing in N2.74 trillion compared to the N1.95 trillion it earned the previous year.

Ecobank Transnational Incorporated and First Bank Holdings also reported earnings above the N2 trillion mark. Ecobank’s interest income grew by 20 per cent to N2.33 trillion, while First Bank Holdings saw a 40.38 per cent rise to N2.29 trillion. These four holding companies were responsible for the majority of the sector’s total interest income for the period.

Among the largest banks, Zenith Bank and First Bank Holdings showed the strongest growth momentum. Zenith Bank recorded the largest year-on-year absolute increase, adding approximately N793.84 billion to its income. First Bank Holdings followed closely, adding about N659.37 billion.

Other banks also posted impressive growth. Guaranty Trust Holding Company reported a 25.56 per cent increase in its interest income to N1.23 trillion. United Bank for Africa recorded the most modest percentage growth among the group at 10.08 per cent, with its income rising to N1.98 trillion from N1.79 trillion.

Wema Bank demonstrated the most significant percentage growth, with its interest income soaring by 72.65 per cent to N396.95 billion. Stanbic IBTC Holdings achieved a strong year-on-year growth rate of 37.24 per cent, adding approximately N158.53 billion, a figure higher than the group’s average growth rate. Sterling Financial Holding Company also recorded an impressive growth rate of 38.73 per cent, taking its interest income to N262.42 billion.

The substantial boost in earnings is largely attributed to sustained hikes in the benchmark interest rate. Core income for these financial institutions comes primarily from loans and advances to customers, investment securities, and cash balances, all of which yield higher returns in a high-interest environment.

This period of rising rates continued until the September 2025 meeting of the Monetary Policy Committee of the Central Bank of Nigeria, which implemented the first rate cut in years. The MPC reduced the Monetary Policy Rate by 50 basis points to 27.00 per cent. It also adjusted the Cash Reserve Requirement for commercial banks to 45 per cent and introduced a 75 per cent CRR on non-TSA public sector deposits.

The CBN Governor, Olayemi Cardoso, stated that the rate cut was predicated on “the increased momentum of disinflation in August,” which he noted was the highest in the five prior months. Despite this recent easing, the maximum lending rate in September remained high at 29.84 per cent.

However, there are early signs that the high cost of borrowing is affecting credit demand. Data shows that credit to the private sector dropped to N72.53 trillion in September from N75.88 trillion in August, indicating a waning appetite for loans.

The global ratings agency Moody’s Investors Service has warned that Nigeria’s banking sector faces fresh profitability risks following the CBN’s rate cut.

Moody’s cautioned that the move “could erode banks’ net interest margins unless higher loan volumes offset lower yields.” The agency further stated, “We expect the lower policy rate to drive a decline in yields on loans and government securities that will outpace the related decrease in the cost of deposits,” noting that deposit costs adjust more slowly than lending rates.

With net interest income accounting for 62 per cent of Nigerian banks’ operating income in 2024, the recent policy shift marks a critical juncture for the sector’s record earnings.