Nigeria's banking sector has demonstrated remarkable financial strength, with nine major institutions collectively generating a staggering N14.72 trillion in interest income during the first nine months of 2025. This impressive figure, drawn from their unaudited financial statements submitted to the Nigerian Exchange Limited, represents a substantial 27.68% increase compared to the N11.53 trillion recorded in the same period of 2024.
The analysis covers the performance of Access Holdings Plc, FBN Holdings Plc (First HoldCo), Zenith Bank Plc, United Bank for Africa (UBA), Guaranty Trust Holding Company (GTCO), Stanbic IBTC Holdings, Sterling Financial Holding Company, Wema Bank, and Ecobank Transnational Incorporated (ETI). This collective surge was primarily fueled by the elevated interest-rate environment that characterized most of the review period.
Bank-by-Bank Performance Breakdown
In absolute terms, Access Holdings emerged as the top performer, reporting interest income of N2.90 trillion. This marks a significant 21.11% growth from the N2.39 trillion it earned in the first nine months of 2024.
Zenith Bank followed closely with N2.74 trillion, achieving the most robust growth among the top-tier banks at a remarkable 40.77% increase year-on-year. In absolute value, Zenith Bank added approximately N793.84 billion to its earnings.
Ecobank Transnational Incorporated (ETI) reported a solid 20% increase, generating N2.33 trillion. Meanwhile, First HoldCo, the parent company of FirstBank, posted a formidable N2.29 trillion, reflecting a powerful 40.38% growth and adding around N659.37 billion to its income.
Among other notable performers, GTCO reported interest income of N1.23 trillion, a 25.56% rise. UBA saw a more modest 10.08% increase, bringing in N1.98 trillion compared to N1.79 trillion previously.
Wema Bank delivered the most dramatic growth across the entire group, with its interest income surging by an impressive 72.65% to N396.95 billion. Stanbic IBTC also posted strong results with a 37.24% year-on-year rise, adding roughly N158.53 billion and outpacing the sector's average expansion. Sterling HoldCo grew by 38.73% to N262.42 billion, driven mainly by income from loans and customer advances.
Impact of Monetary Policy on Banking Performance
The substantial growth in interest income was largely attributable to sustained increases in benchmark interest rates earlier in the year. These higher rates significantly boosted banks' core earnings from loans, investment securities, and cash balances with the Central Bank of Nigeria.
However, a significant policy shift occurred at the September 2025 meeting of the Monetary Policy Committee (MPC). The committee implemented its first rate cut in years, reducing the Monetary Policy Rate (MPR) by 50 basis points to 27%. They also adjusted the Standing Facilities corridor to +250/-250 basis points.
In a contrasting move, the committee reviewed the Cash Reserve Ratio (CRR), raising it to 45% for commercial banks while maintaining 16% for merchant banks. A new 75% CRR was introduced on non-TSA public sector deposits, though the liquidity ratio remained unchanged at 30%.
CBN Governor Olayemi Cardoso explained that the rate cut reflected stronger disinflation observed in August, which represented the fastest disinflation in five months. Despite the MPR being at 27%, CBN Money Market Indicators showed that the maximum lending rate in September reached 29.84%, slightly higher than in July and August.
Concurrently, credit to the private sector declined to N72.53 trillion in September from N75.88 trillion in August and N76.13 trillion in July. This reduction suggests a cooling in lending appetite as borrowing costs began to shift following the monetary policy adjustments.
Sector Outlook and Implications
The collective performance of these nine banks highlights the banking sector's resilience and adaptability in a dynamic economic environment. The N14.72 trillion interest income milestone underscores how financial institutions effectively leveraged the high-interest rate climate to bolster their earnings.
As the monetary policy landscape evolves with the recent rate cut and adjusted CRR requirements, banks may need to recalibrate their strategies for the coming quarters. The decline in private sector credit indicates that the cost of borrowing may have begun to affect lending volumes even before the official rate reduction.
Looking ahead, the banking sector's ability to maintain growth momentum will depend on how effectively institutions navigate the changing regulatory environment while continuing to support economic activity through prudent lending practices.
