Nigerian banks grew earnings to N26.3 trillion in 2025 but profits fell on provisions and FX losses

Ten listed Nigerian banks, including Zenith, Access Holdings, GTCO, UBA, and First HoldCo, collectively generated N26.3 trillion in gross revenue in 2025, up 11.9 percent from N23.5 trillion in 2024, driven largely by interest income, which accounted for 70.7 percent of gross revenue.

Despite strong top-line growth, after-tax profit across the sector dipped 7.36 percent, as combined foreign exchange income fell 53 percent to N1.52 trillion (down from N3.22 trillion in 2024) and impairment charges surged following the exit of the COVID-19 era loan forbearance in June 2025.

The CBN cut its monetary policy rate by 50 basis points to 27.0 percent in September 2025 and further to 26.5 percent, but banks still widened net interest margins by repricing loans and securities faster than their cost of funds, with Zenith's interest income surging 138.6 percent and GTCO's jumping to 148.6 percent.

The immediate signal for Nigerian bank investors and depositors is that profitability is now structurally tied to interest rate conditions rather than FX windfalls. This means the 2024-style currency devaluation gains are gone and will not flatter results again in the near term.

As the CBN continues its cautious easing cycle with inflation still rising (15.38 percent in March) and the governor flagging geopolitical risks from the Middle East as a complicating factor, banks that have aggressively repriced their securities portfolios, like Zenith and GTCO, are best positioned to sustain margins through mid-2026.

However, if the CBN accelerates rate cuts over the next 6 to 12 months to support economic growth, net interest margins will compress and banks will need non-interest income streams currently declining to compensate.