Nigerian Banks post record profits as sector strengthens push toward $1trn economy

Nigeria’s banking sector has emerged as a critical driver of the nation’s economic aspirations, delivering exceptional performance in 2024 amid strategic reforms, high-interest rate environments, and increased lending activity.

With Nigeria eyeing a $1 trillion economy in the near term, the robust growth of key financial institutions underscores the sector’s growing systemic relevance.

An analysis of 10 major publicly listed commercial banks shows a remarkable 38% year-on-year surge in total customer loans, reaching ₦51.4 trillion.

At the same time, interest income more than doubled, soaring by 122% to ₦15.1 trillion, reflecting strong demand for credit and effective interest rate management.

Collectively, these banks posted a post-tax profit of ₦4.8 trillion in 2024—a significant 53.5% jump from ₦3.1 trillion recorded in 2023—highlighting the sector’s growing profitability and resilience.

Wema Bank Leads with Stellar Performance

Among the banks assessed, Wema Bank emerged as the top performer in 2024 based on a weighted analysis of profitability, loan and asset growth, capital adequacy, cost efficiency, and non-performing loan (NPL) management.

The bank’s full-year results showed a more than 60% increase in total assets to ₦3.59 trillion, while post-tax profit surged by over 140% to ₦86.28 billion—an exceptional leap reflecting operational efficiency and strategic market positioning.

Fidelity Bank Delivers Record-Breaking Profit Growth

Fidelity Bank followed closely, recording the highest profit growth among its peers. The bank’s post-tax profit skyrocketed by 179.6%, while return on average equity (ROAE) improved significantly to 41.7%, up from 26% the previous year. Customer deposits rose by 47.9% to ₦5.9 trillion, while its NPL ratio declined to 3.1%, underscoring prudent risk management.

FBN Holdings, Zenith, GTCO Also Post Strong Results

FBN Holdings delivered a strong performance across multiple metrics. Deposits grew by 61% to ₦17.2 trillion, post-tax profit jumped 115% to ₦663.5 billion, and total assets expanded by 57% to ₦26.5 trillion—firmly cementing its role as one of Nigeria’s financial giants.

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Zenith Bank’s results were anchored by aggressive credit deployment, with customer loans increasing by 52% to ₦9.97 trillion. Post-tax profit rose 52.6% year-on-year, while the bank’s Capital Adequacy Ratio (CAR) improved to 25.6%, up from 21.7%.

GTCO (Guaranty Trust Holding Company) maintained strong profitability and capital strength, reporting a post-tax profit of ₦1.02 trillion, an 88.6% increase. Its CAR surged to 39.3%, up from 21.9%, though the bank saw a slight uptick in its NPL ratio to 5.2%, from 4.2%, raising mild concerns over credit quality.

Banking Sector Now a Key GDP Contributor

According to the National Bureau of Statistics (NBS), the financial services sector grew by 30.9% in real terms in 2024, contributing approximately 42% to Nigeria’s total GDP growth of 3.4%. This cements the sector’s critical role in Nigeria’s economic structure and its importance in the country’s transition toward a $1 trillion GDP target.

Analysts Praise Growth, Warn of Risks

Financial analyst and partner at Agusto & Co, Mrs. Bukola Adebayo, described 2024 as a “goldmine year” for Nigerian banks, attributing the strong financial performance to favorable market dynamics.

“The combination of forex revaluation gains, high-yield government instruments, and expanded customer lending enabled banks to significantly enhance their balance sheets,” Adebayo noted.

However, she warned that banks must remain vigilant as non-performing loans are beginning to rise, possibly due to aggressive credit expansion.

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“Sustained performance will depend on how well banks manage emerging credit risks,” she added.

Recapitalization to Bolster Sector Stability

Looking ahead, financial economist Professor Uche Uwaleke of Nasarawa State University emphasized that the Central Bank of Nigeria’s (CBN) ongoing recapitalization initiative will be key to supporting larger, more stable institutions capable of financing long-term economic growth.

“As the recapitalization drive unfolds in support of the government’s $1 trillion economy vision, we can expect more robust, better-capitalized banks with greater lending capacity. But this must go hand-in-hand with strong corporate governance to avoid systemic vulnerabilities,” Uwaleke cautioned.

Rising Threat from Fintechs and Digital Banks

While traditional banks have had a strong year, industry experts warn of increasing disruption from fintech companies and digital-only challenger banks.

These nimble competitors continue to reshape the financial services landscape, offering low-cost, technology-driven alternatives that appeal to younger, digitally savvy consumers.

As the race toward a $1 trillion economy intensifies, Nigerian banks are poised to play an even more central role. But to maintain their momentum, they must continue to innovate, strengthen governance frameworks, and deepen financial inclusion—while navigating a rapidly evolving digital and regulatory landscape.