Nigerian banks have released the full-year financial report for 2024, and the reports filed so far with the Nigerian Exchange Limited (NGX) show massive revenue growth.

Ten banks have reported a combined N14.4 trillion in revenue from interest on loans and advances offered to customers in 2024.

This is more than double the N6.34 trillion generated by these same banks in the preceding financial year, and represents a 126.5% growth year-on-year.

Ten banks earn N14.4 trillion in interests

Ecobank is the highest with N2.76 trillion generated from loan interests in 2024, a 128.3% growth from the N1.21 trillion reported in 2023.

Zenith Bank follows closely behind with N2.72 trillion interests in 2024, 138% up from N1.14 trillion in 2023.

First Holdco, the parent company of First Bank of Nigeria Plc, reported N2.4 trillion interest in 2024, a 158% growth from N936.68 billion in 2023.

United Bank for Africa Plc reported a profit N2.37 trillion, up from N1.07 trillion in 2023, while GTCo reported N1.34 trillion up from N550.75 billion in 2023.

The others are Fidelity Bank Plc with N950.58 billion interests from loans in 2024, FCMB Group Plc with N621.53 billion, Stanbic IBTC Holdings Plc with N566.46 billionWema Bank Plc with N354.63 billion, and Sterling Financial Holdings Company Plc with N260.8 billion.

CBN increases interest rates

Recall that the Central Bank of Nigeria increased the interest rates severally in 2024, raising it from N18.75% at the beginning of the year to 27.5% by year-end.

The goal was to aggressively tackle the fast rising inflation, and the Monetary Policy Committee voted to adopt conventional methods like hiking interest rates.

ThisDay reports that this hike also rubbed off on the average prime lending rate in Nigeria, pushing it to 18.56%, not so far from the all-time high of 19.66% last seen in November 2009.

Banks rake in double profits from high interest rates

Banks have largely benefited from the increased interest rates, with most of them recording more than a 100% growth in profit.

However, there have also been concerns that businesses in different sectors like manufacturing and FMCG have received the short end of the stick.

Mr. Omordion Ambrose, the Chief Research Officer, InvestData Consulting Limited, noted that while the higher interest rates may translate to more profits for the banks, it is not good news for small and medium-scale businesses.

He said; “Businesses need a lot of credit facilities to survive, but in an environment where the lending rate is astronomical, many enterprises, especially small and medium-scale, might find it extremely difficult to survive as their products will remain uncompetitive and the cost of production and the sale prices to consumers will remain high.”

Mr. Tajudeen Olayinka, Investment Banker and Stockbroker, noted that in addition to the MPR, other factors also influence lending rates.

He explained that they also consider their deposit mix, idle customers’ deposits in the bank equally play a key role in determining the bank’s lending rates.