Access, Zenith, First HoldCo lead N8.41trn loan interest surge in 2024
BY TEMITOPE ADEBAYO
Nigerian banks recorded a landmark performance in 2024, generating N8.41 trillion in interest income from customer loans, up by 106 per cent from N4.08 trillion in 2023. The gain was fuelled by a sharp rise in interest rates following the Central Bank of Nigeria’s (CBN) aggressive tightening of monetary policy.
The CBN raised its benchmark interest rate by more than 800 basis points during the year to 27.5 per cent, creating a favourable environment for banks to reprice loans and boost interest income. An analysis of ten publicly listed banks showed they expanded their total loan portfolio by 37.6 per cent to N51.36 trillion, capitalising on the high-rate regime to grow both credit volumes and pricing.
Interest income remained the backbone of bank revenues, contributing 72.4 per cent to their gross earnings. Beyond customer loans, banks also earned N6.66 trillion from other interest-bearing assets, including government securities and interbank placements, compared to N2.7 trillion in 2023.
READ ALSO: SEC urges Nigerians to report Ponzi schemes, warns of rising fraud risks
Access Corporation emerged as the top earner, generating N1.63 trillion from customer loans, up 118 per cent from 2023, with its loan book rising by 43 per cent to N11.49 trillion. Zenith Bank followed with N1.52 trillion, a 126 per cent rise, while First HoldCo ranked third with N1.36 trillion, reflecting a 124 per cent increase.
UBA and Fidelity Bank rounded out the top five, earning N779.7 billion and N626.3 billion respectively, with strong growth in both loan volumes and yields. While Access had the largest loan portfolio, Wema Bank led in loan pricing, recording an average interest rate of 23 per cent on its customer loans.
Despite the earnings growth, the higher interest rate environment also pushed up banks’ cost of funds. Zenith Bank, Stanbic IBTC, and GTCO all reported increases in funding costs, and the impact on borrowers was evident. The average non-performing loan ratio among the top ten banks rose to 4.5 per cent in 2024 from 4.1 per cent the previous year, signalling rising pressure on credit quality.
With the Monetary Policy Rate still at 27.5 per cent and inflation exceeding 24 per cent as of March 2025, banks may continue to enjoy elevated loan interest income in the near term. However, the sustainability of asset quality in the face of rising borrowing costs remains a concern.
