Nine major Nigerian banks recorded a combined interest income of N14.26tn in 2024, representing a 119.55% increase from N6.49tn in 2023, according to an analysis of audited financial results filed with the Nigerian Exchange Limited.

This significant revenue boost occurred while manufacturers struggled with rising borrowing costs, with the sector reporting N1.3tn in interest expenses during the same period.

Bank Performance Breakdown

Access Holdings led with N3.11tn in interest income, a 98.69% increase from the previous year. Other impressive performances included:

- Zenith Bank: N2.72tn (up 137.74%)

- First HoldCo: N2.39tn (up 155%)

- United Bank for Africa: N2.37tn (up 120%)

- Guaranty Trust Holding Company: N1.32tn (up 148%)

- Fidelity Bank: N803.05bn (up 85.03%)

- FCMB Group: N621.81bn (up 75.16%)

- Stanbic IBTC: N566bn (up 109%)

- Wema Bank: N354.63bn (up 91.03%)

First HoldCo achieved the highest percentage growth, while Zenith Bank recorded the largest actual increase at N1.58tn compared to the previous year.

Some banks reported interest income from non-performing loans, including Zenith Bank (N18.25bn), UBA (N4.26bn), and Fidelity Bank (N8.10bn).

Monetary Policy Impact

The banking sector's strong performance coincided with the Central Bank of Nigeria's monetary tightening policy. By the end of 2024, the Monetary Policy Rate had increased by 875 basis points, rising from 18.75% in 2023 to 27.50%.

This aggressive stance was implemented to combat inflation, which reached 34.80% in December 2024—a 5.87 percentage point increase from December 2023's 28.92%.

Manufacturing Sector Struggles

While banks prospered, manufacturers faced severe challenges. At a recent Bankers Committee Town Hall in Lagos, Manufacturers Association of Nigeria President Francis Meshioye highlighted the sector's difficulties, noting that manufacturers spent approximately N1.3tn on interest payments in 2024.

"Manufacturers spent about N1.3tn on interest rate; the cost of funds last year, 2024, and that is huge," said Meshioye. "Some are even paying 37 percent. How do you survive this?"

Meshioye urged banks to moderate their profit ambitions and consider the long-term impact on the sectors they serve: "If you kill the place you make the money from, then how will you survive?"

Broader Economic Concerns

Financial analysts warn that Nigeria's high interest rates—with commercial lending rates between 28% and 35%—are worsening poverty and restricting credit access for small businesses and farmers.

While banks report record profits from high-interest lending and risk-free government securities, investment in critical economic sectors like agriculture, manufacturing, and small-scale industries continues to decline.

With the National Bureau of Statistics reporting over 133 million Nigerians living in multidimensional poverty, the rising borrowing costs are making it increasingly difficult for individuals and businesses to access funds for investment, expansion, or basic operations.​​​​​​​​​​​​​​​​