Always Visit www.NaijaCover.Com

Posted By Admin On September 13th, 2025

Nigerian lenders posted a surge in interest income to N15.4tn in the past year, on the back of the hawkish stance of the Monetary Policy Committee of the Central Bank of Nigeria.

This was indicated in the 20th edition of the Banking Sector Report by Afrinvest, titled ‘ACT-BOLD: Beyond a Trillion-Dollar Economy’, which was unveiled at an event in Lagos, which also marked the 30th anniversary celebration of the firm.

Between February and November 2024, the apex bank hiked the benchmark interest rate by a cumulative 875 basis points to 27.5 per cent in a bid to tame inflation, stabilise the naira, and restore investor confidence. While the policy squeezed system liquidity, it proved highly accretive for banks’ earnings. The MPC has since entered a hold stance, with about 100 bps moderation being projected by analysts by the end of the year.

The executive summary of the report seen by The PUNCH partly read, “Monetary policy under the Cardoso-led CBN pivoted aggressively in 2024 to tame inflation, restore market confidence, and stabilise the FX rate. A prominent policy measure deployed by the apex bank was the successive hikes in the benchmark rate by a cumulative 875 bps to 27.50 per cent between February 2024 and November 2024, and this, alongside other variables, was left unchanged throughout H1:2025.

This policy measure (though aimed at taming the system liquidity) drove a 118.5 per cent year-on-year jump in our coverage universe interest income to N15.4tn, while gains from trading activities also increased by 8.6 per cent to N2.3tn.”

It added, “In the end, the pre-tax profit of our coverage universe surged by 65.7 per cent to N6.2tn, indicating that lenders were able to sweat out value even in a challenging macroeconomic condition.”

On the banking sector recapitalisation, the report indicated that all lenders within its universe have initiated or completed a capital raise to strengthen their buffer, with banks estimated to have raised about N2.5tn as of H1’2025.

“As of mid-2025, our estimate suggests that banks have collectively raised over N2.5tn through rights issues, public offerings, and private placements. Also, at least four lenders, Access Corp, Zenith Bank, Ecobank, and Lotus, have met the new capital thresholds, while several others are on track to meet the June 2026 deadline. A few institutions are exploring merger and acquisition options as a compliance strategy.

“Overall, the growth of the banking sector (proxied by financial institution GDP) has remained resilient, clearing at 15.0 per cent in real terms in Q1:2025 and ranking among the top 10 contributors to the GDP in the period,” the report noted.

Speaking on the report, the Group Managing Director of Afrinvest, Ike Chioke, said that the 20th edition of the BSR carries a special theme, ‘ACT-BOLD: Beyond a Trillion-Dollar Economy’, and is both a call to action and a framework for Nigeria’s growth.

He said, “ACT-BOLD is an acronym representing seven high-impact industries we have identified as accelerators of Nigeria’s future, comprising A – for Agriculture, C – for Creatives, Tourism & Hospitality, T – for Technology, B – for Banking & Other Finance, O – for Oil & Gas, L – for Logistics and D – for Domestic Manufacturing.

“Together, these sectors hold the potential to unlock prosperity well beyond the symbolic trillion-dollar GDP mark and position Nigeria as a truly competitive global economy. Just as countries like India and Indonesia have crossed that milestone by diversifying and investing in people, Nigeria too can chart its own path if we ACT BOLD.”

Commenting on the economy, Chioke said the presence of fuel and foreign exchange subsidies had prevented the Nigerian economy from attaining its rightful growth trajectory.

“But I think what can be done better would be for the government to channel the incremental savings from the subsidies that were removed into investing appropriately in infrastructure, fixing our roads and bridges, fixing telecommunications infrastructure, making sure the power gets to the people, and then also investing in the human capital sector, education and healthcare. That would also help bring the cost of living down for Nigerians and make sure that the 133 million Nigerians who live below the poverty level have some sort of cushion to withstand the shock that the economy is going through at this time.

“We cannot leave anybody behind, and it is important that we do not forget our brothers and sisters across the country who are suffering as a consequence of the economic reform that has been introduced by the government. I think that if we can pull that together, then we are definitely on the trajectory for growth, as we outlined in the 2025 Banking Sector Report with the acronym ACT BOLD, because we believe that Nigeria can even surpass our $1tn economic policy target if we focus on these seven core sectors that we’ve profiled in that report,” Chioke said.

The chairman of Afrinvest West Africa Limited, Donald Lawson, who was represented by development economist Professor Osita Ogbu, said that in a world where volatility has become the new normal, the company has demonstrated that African institutions can be both shock absorbers and agents of transformation.

He said, “Our legacy is not just in numbers, but in impact. Over the decades, we have pioneered transactions that reshaped industries, facilitated investments that built infrastructure, supported governments and corporates and contributed to the development of Nigeria’s financial markets. This is a legacy we are proud of, a legacy written not in ink, but in the stories of businesses grown, economies strengthened, and lives touched.”

On the outlook for the next three decades of Afrinvest, Donald said, “Our ambition for the next 30 years is clear: to expand our retail reach from hundreds of thousands to millions, democratising finance in Nigeria. To deepen our leadership in investment banking, asset management, securities trading, and fintech, not only in Nigeria but across Africa. To continue producing research and thought leadership that guides policy, informs investors, and strengthens our markets.

“We will continue to uphold the values that have defined us for three decades: innovation, integrity, professionalism, service, and an unwavering commitment to our clients. These principles will remain our compass as we navigate the future.”

Afrinvest’s story started in 1995 when former Edo Governor Godwin Obaseki founded Securities Transaction and Trust Company Limited. In the same year, Phillip Iheanacho established Afrinvest Limited in London. In 2006, SecTrust acquired Afrinvest Nigeria Limited, then led by Ike Chioke.

Source: https://punchng.com/cbn-tightening-pushes-banks-interest-income-to-n15-4tn-afrinvest/