Nine leading banks in Nigeria earned a total of N14.26 trillion in interest income in 2024, a sharp rise compared to the N6.49 trillion they recorded the year before.

This income came from loans they gave to customers, according to their audited financial statements submitted to the Nigerian Exchange Limited.

According to the Corporate Finance Institute, interest income is the amount paid to an entity for lending its money or letting another entity (individual or corporate) use its funds.

The banks involved include Access Holdings, Zenith Bank, First HoldCo (parent company of FirstBank), United Bank for Africa (UBA), Guaranty Trust Holding Company (GTCO), Fidelity Bank, FCMB Group, Stanbic IBTC Holdings, and Wema Bank.

According to Punch, the steep increase in earnings reflects the effect of rising interest rates driven by tighter monetary policies from the Central Bank of Nigeria (CBN).

These policies pushed the Monetary Policy Rate to around 24.75%, with commercial lending rates climbing to between 28 and 35%.

Bank-by-bank breakdown of interest income growth

Here's how individual banks performed:

1. Access Holdings: Interest income rose by 98.69% to N3.11tn.

2. Zenith Bank: Increased by 137.74% to N2.72tn.

3. First HoldCo: Grew by 155% to N2.39tn.

4. UBA: Up by 120% to N2.37tn.

5. GTCO: Rose by 148% to N1.32tn.

6. Stanbic IBTC: Increased by 109% to N566bn.

7. FCMB Group: Up by 75.16% to N621.81bn.

8. Fidelity Bank: Rose by 85.03% to N803.05bn.

9. Wema Bank: Increased by 91.03% to N354.63bn.

In percentage growth, First HoldCo recorded the highest rise, followed by GTCO and Zenith Bank.

But in actual naira terms, Zenith Bank made the most with an increase of N1.58tn, closely followed by Access Holdings (N1.54tn) and First HoldCo (N1.46tn).

Rising interest rates hurt manufacturers

The overall trend highlights how monetary policy changes are benefiting banks but raising concerns about their wider impact on the economy, especially for sectors dependent on affordable credit.

While banks saw profits soar, manufacturers and small businesses struggled under the weight of high borrowing costs.

Reports show that businesses in the manufacturing sector paid about N1.3 trillion in interest on loans during the same period.

The CBN’s Monetary Policy Committee (MPC) has argued that the aggressive rate hikes are aimed at controlling inflation, which rose to 34.80% by December 2024, up from 28.92% the previous year.

However, experts warn that these high rates are making it harder for small businesses and farmers to access loans, deepening poverty and slowing down economic growth.