Despite Nigeria’s struggling economy, major financial institutions—including Zenith Bank, GTCO, UBA, Stanbic IBTC, and Fidelity Bank—have reported unprecedented profits in their 2024 full-year financial results. This comes at a time when inflation, currency devaluation, and reduced consumer purchasing power are squeezing many other sectors.
Together, these five banking giants recorded a combined post-tax profit of ₦3.317 trillion. However, some financial experts caution that these figures tell only part of the story. When converted to dollars, the numbers lose some of their impact due to the naira’s 70% depreciation against the U.S. dollar since May 2023.
-
UBA saw its post-tax profit rise 26.14%, climbing from ₦607.7 billion in 2023 to ₦766.6 billion in 2024.
-
Zenith Bank posted an impressive ₦1.03 trillion in profit, a 52.5% increase from the previous year’s ₦676.9 billion.
-
GTCO (the parent company of GTBank) recorded ₦1.017 trillion in earnings, reflecting an 88.4% growth from ₦539.6 billion in 2023.
-
Stanbic IBTC Holdings Plc followed suit, increasing profits by 60.23% to ₦225.3 billion.
-
Fidelity Bank outpaced them all in terms of growth rate, with profits skyrocketing 179.63% to ₦278.1 billion.
According to Marcel Okeke, a former chief economist at Zenith Bank, much of these gains stem from currency devaluation. Many banks hold substantial dollar-denominated assets, which, when converted back to naira, result in inflated profit figures.
"While these numbers look impressive on paper, they don’t necessarily indicate real economic expansion," Okeke explained.
At the same time, other industries have been hit hard by the same economic forces benefiting banks. Since 2023, at least 10 multinational companies have exited Nigeria, citing currency instability, rising costs, and unpredictable business conditions. Major names like GlaxoSmithKline, Equinor, and Unilever Nigeria have either shut down or relocated.
Despite the turbulence, the Central Bank of Nigeria (CBN) has implemented reforms aimed at increasing transparency in the foreign exchange market. Since December 2024, the naira has shown relative stability, trading at around ₦1,536 per U.S. dollar in the official market.
Additionally, banks have benefited from heavy investments in government securities such as treasury bills, which have boosted their interest income.
"A closer look at their balance sheets will show that a significant chunk of their revenue comes from interest earnings," Okeke noted.
The steep naira devaluation can be traced back to economic policies introduced by President Bola Tinubu’s administration. The removal of fuel subsidies, intended to attract foreign investment, has also led to higher inflation, a tripling of petrol prices, and increased costs for both businesses and households.
To combat rising inflation, the CBN raised the monetary policy rate to 27.75% in February 2025. While this move made government securities more attractive, it also drove up borrowing costs, making credit less accessible for businesses.
Nigeria’s inflation rate, which stood at 34.8% in December 2024, was recalculated following a rebasing of the Consumer Price Index, bringing it down to 23.18% as of February 2025. But for the average Nigerian, this statistical adjustment doesn’t change much.
As economist Ilias Aliyu pointed out, the disparity between booming bank profits and economic hardship is concerning.
"It’s a paradox—banks are raking in massive profits while businesses are shutting down and ordinary Nigerians struggle with rising costs. Unlike South Africa, where the financial sector drives GDP growth, banking profits here don’t seem to translate into higher per capita income or better living conditions," Aliyu remarked.
He also noted that forex policies often favor financial institutions rather than supporting broader economic growth.
Professor Bongo Adi, an economist at Lagos Business School, argues that Nigeria’s economic resilience is largely driven by banks, oil & gas, and telecoms—industries that contribute little to job creation.
"These sectors are profitable, but how many jobs are they actually creating? Their impact on employment is minimal," Adi observed during the FATE Foundation’s 10th Business Outlook event in Lagos.
According to him, Nigeria’s economy remains afloat, but real growth is being held back by structural imbalances.
"The real sector is being dragged down while nominal sectors continue to thrive. That’s not a sustainable model for long-term development," he warned.
While Nigeria’s banking sector enjoys record earnings, many businesses and households struggle to keep up with soaring costs. The disconnect between financial sector growth and broader economic well-being raises important questions about wealth distribution and sustainable development.
For now, banks continue to benefit from monetary policies, currency fluctuations, and government securities. But the real test will be whether these gains translate into tangible improvements for the Nigerian economy as a whole.