Business
High interest rates choke real sector as banks break N1tr profit threshold
• Three tier-one on track for N1 trillion post-tax profits
• Commissions, fees of Zenith, GTCo, UBA nearly triple
• Ovia, Elumelu, Agbaje earn N41 billion in dividend
• Industry ranks sixth in Africa on high non-interest income ratio
Like a vulture, the banking industry continues to feast on a bleeding economy, with the latest financials of the lenders diverging significantly from the performance of the real sector.
In the face of constricted real sector growth, including manufacturing and agriculture, banks are demonstrating an unusual resilience, with the tier-one players entering a 12-digit post-tax profit era.
For the first time in their corporate sojourn, GTCo Plc and Zenith Bank Plc broke the N1 trillion profit after tax (PAT) mark, emerging as the first Nigerian banks to hit the milestone.
Whereas GTCo almost doubled its PAT to N1.02 trillion in the year, many business operators considered as one of the toughest in recent years, Zenith almost grew by 50 per cent to cross N1 trillion as well.
Access Holdings Plc, the biggest player by asset size, also shows a great prospect of exceeding N1 trillion. The group would only need to grow its 2023 N619.3 billion by 62 per cent – which is a mean fit in the industry it operates – to reach N1 trillion.
In 2023, Access Holdings, which has reinvented growth by acquisition, quadrupled its post-tax profit. It does not need to double the figure this year to join the league of N1 trillion PAT banks the market witnessed last week.
Last week, three out of the three systemically important banks (SIBs) – otherwise considered too big to fail – posted what many investment analysts could consider as head-turning results and announced corporate actions.
The trio – GTCo, UBA Group and Zenith – posted a combined PAT of N2.78 trillion, an impressive 53 per cent jump from the N1.82 trillion they recorded in 2023.
Besides Lagos, the amount posted by the three banks can fund the budget of any state in the country. Lagos state plans to spend N3.37 trillion while Niger, Rivers and Ogun states are to spend N1.56, N1.19 and N1.05 trillion respectively. Some six states have a combined yearly budget of less than N2 trillion.
The three tier-one banks grew their interest income by 73.4 per cent – from N1.88 trillion to N3.23 trillion. As remarkable as the interest income appears, it is far behind the speed of growth of their fees and commissions, which form the bulk of their non-interest incomes and demonstrate how less the lenders depend on financial intermediation to grow their earnings.
At 31.4 per cent, Nigerian banking is sixth with the highest non-interest to total income ratio in Africa. It comes behind Egypt, the Republic of Benin, Ghana, Sierra Leone and Tunisia. Globally, it is the 94th.
In the year, fees and commissions grew by 178 per cent, nearly threefold, to reach N920 billion. As of 2023, their combined fees and commissions were a mere N330.5 billion.
Today, many banks are investing heavily in consumer products as part of the broader strategy to transition to transaction-led institutions – a cheaper option for risk-based financial intermediation.
Daily, Nigerians take to social media to protest the widespread ‘extortion’ by the financial institutions, which are more interested in deposit mobilisation and general transactions than credit underwriting. Deposit money banks (DMBs) fund trade and only stable businesses, while risky small businesses are left to source funding from the informal market and cut-throat microlenders.
A few small businesses that secure funds from mainstream banks are handed unaffordable interest rates. Data by the Central Bank of Nigeria (CBN) put the maximum interest rate at 29.79 per cent in January. But no bank currently charges less than 35 per cent. In some cases, borrowers pay as much as 40 per cent.
At 35 per cent, most banks are still indifferent to lending funds to risky businesses. At an asymmetric corridor of +500/-100, MDBs can warehouse funds mobilise at 8.3 per cent, which is the regulatory threshold of interest on savings, at 26.5 per cent through the standard deposit facility (SDF). It also leaves much to be questioned on how banks could lend at below 30 per cent when short-term liquidity from the CBN comes at 32.5 per cent.
The banks also have sufficient options in treasury bills with yields hovering around 20 per cent in over a year. Most banks would rather push their excess liquidity into these investment windows than fund businesses that are grappling with industry, economic and political risks, perhaps an explanation of the divergence of negative correlation between banks’ profitability and economic performance.
The trend appears to be on a spiral, even as the banks are likely to continue to crowd out the scanty investments flowing to other sectors. In the past few years, when many manufacturers buckled under rising losses and single-digit growth in profit at best, banks’ profits have grown in leaps, leading to higher shareholders’ earnings and executive bonuses.
For one, the directors of Zenith Bank will pocket N25.88 billion as dividends for the 2024 financial year. Jim Ovia, the founder and majority shareholder of the bank, will receive 98.2 per cent of the amount or N25.4 billion. The bank has declared a final dividend of N5 per share in the year, subject to shareholders’ ratification at its yearly general meeting.
With a total shareholding of 2.542 billion in UBA, Tony Elumelu would similarly be handed a pay cheque of N12.7 billion by the bank for staking his interest in the company last year. The bank had declared N2 interim and N3 final dividend for the year.
Elumelu’s colleague at GTCo, Segun Agbaje, will earn N3.33 billion from the bank’s dividend payout for last year’s operation.
The trio, the last of the lineage of Nigeria’s 2000s super bankers, will earn N41.4 billion from the three institutions that shape and define the Nigerian banking industry.
The oversize and disproportionate dominance of the sector reflect its role in economic growth. Last year, the financial sector’s contribution to real GDP was a mere six per cent, but it saw the highest growth – an astronomical 28 per cent. Agriculture, with an overwhelming 25 per cent control of the gross domestic product (GDP) and manufacturing, which should determine the size and pattern of banking, were capped at 1.8 per cent each.
Of the disconnection, Agusto & Co wrote: “Notably, the seven largest sectors, which collectively contribute 76.45 per cent of Nigeria’s GDP, experienced growth slowdowns during the quarter. This trend underscores the prevailing constraints within the business environment and, in some cases, highlights deep-rooted structural challenges that continue to hinder sectoral expansion and overall economic resilience.”
Next year, the banks will have raised their capital thresholds significantly, enabling them to expand their business outreach. But with so substantial efforts made to derisk the core of the economy – manufacturing and agriculture especially – it does not appear that bigger banks would benefit the growth sector to stimulate an inclusive economic expansion.
At best, Nigeria may have bigger banks with more aggressive profit growth plans that would not be achieved with the support of the lethargic real sector but on its graveyard- perhaps by licking its sores.
-The Guardian
The Central Bank of Nigeria (CBN) is looking at regulatory reforms aimed at easing compliance burdens on fintech firms, supporting regional expansion, and deepening financial inclusion, as pressure mounts on operators grappling with rising costs and delayed approvals.
In its 2025 Fintech Report, the apex bank disclosed plans to operationalise a Single Regulatory Window to streamline licensing and supervisory processes across multiple agencies, a move expected to significantly reduce time-to-market for new digital financial products.
“Stakeholders cited delays in approvals and ambiguity in regulatory guidelines as their most pressing concerns,” the report stated, adding that these challenges continue to inflate costs and slow innovation across the ecosystem.
The CBN report acknowledged that compliance costs remain a major drag on fintech growth, with 87.5 per cent of respondents reporting that the cost of meeting regulatory and risk requirements significantly impacts their capacity to innovate.
“Exploring models for a Single Regulatory Window to simplify multi-agency compliance processes and reduce time-to-market” as well as “reviewing approval timelines and operational guidelines to address industry feedback on delays and ambiguity.”
It would be recalled that at the last World Bank/ International Monetary Fund (IMF) annual meetings in Washington, DC, Last October, the CBN governor, Olayemi Cardoso, had meet with operators and stakeholders in the Nigerian fintech space behind closed doors in a no holds barred session to ensure that they are fully and formally incorporated within the Nigerian financial regulatory framework.
Beyond domestic regulation, the CBN revealed that it is exploring regulatory passport arrangements to support cross-border expansion, as Nigerian fintech firms increasingly look beyond the country for scale.
The report showed that 62.5 per cent of surveyed fintechs currently operate or plan to expand into other African markets, with strong support for mutual recognition of licences among peer regulators.
“Stakeholders proposed piloting this model with peer regulators in Ghana, Kenya, South Africa, Uganda and Senegal,” the report said, describing bilateral pilots as a more realistic short term pathway to regional integration.
On digital assets, the CBN signalled a shift towards a more nuanced regulatory framework for cryptocurrency, balancing innovation with financial integrity rather than imposing blanket restrictions.
The fintechs surveyed also acknowledged crypto’s potential to drive cost-effective cross-border transactions and strengthen remittance channels, while also warning of risks linked to illicit flows and consumer protection.
“There was broad agreement on the need for a risk-based, activity-focused regulatory framework,” the report stated, adding that regulators must avoid equating all crypto activity with criminality, especially as many scams originate offshore.
The report further highlighted growing pressure to revisit the operational scope of Payment Service Banks, particularly restrictions that prevent them from extending credit, despite their reach into underserved communities.
Stakeholders urged the CBN to either review the PSB framework or introduce a dedicated digital banking licence that would enable inclusive lending under stronger prudential oversight.
“A dedicated digital bank licence may be a more effective pathway for inclusive lending than expanding the PSB mandate,” the report noted, while stressing the need for close coordination between the CBN and the Nigerian Communications Commission.
In the foreword, the CBN Governor said the central bank is committed to fostering innovation without compromising financial stability. “For the CBN, innovation is a strategic imperative. We are committed to creating an environment where new ideas can flourish under prudent oversight, and where inclusion is at the heart of our endeavours.”
He added that fintech must help deliver financial services to the last mile, “from the bustling cities to the rural villages, so that no Nigerian is left behind in the digital economy.”
The central bank said it will continue to collaborate closely with industry stakeholders as it refines policies aimed at positioning Nigeria not just as a fintech frontrunner, but as a regulatory reference point for emerging markets globally.
-Leadership
UAC of Nigeria Plc has announced its unaudited financial results for the fourth quarter and year ended December 31, 2025.
The firm recorded a 74 per cent increase in revenue to N343.4 billion, following the successful completion of its transformational acquisition of CHI Limited alongside continued contributions from the Group’s core operating businesses.
The 2025 financial year marked a strategic inflexion point for the Group, characterised by significant scale expansion, entry into large consumer growth categories, and strong underlying earnings momentum, albeit alongside N21.2 billion in one-off acquisition-related costs. Excluding these non-recurring costs, underlying profit before tax rose by 76 per cent year-on-year to N28.7 billion, underscoring the strength of the Group’s core operating performance.
In the fourth quarter alone, the inclusion of three months’ performance from CHI Limited drove a 62 per cent year-on-year increase in revenue to N183.8 billion, providing early evidence of the earnings potential of the expanded portfolio.
Operating profit stood at N8.2 billion, down from N12.2 billion in Q4 2024, reflecting the impact of one-off transaction costs related to the acquisition of CHI Limited.
Excluding these one-off costs, operating profit surged to N20.3 billion, representing a 66 per cent year-on-year increase.
The acquisition of CHI Limited has significantly broadened UAC’s operating base, adding leading consumer brands such as Chivita, Hollandia, and Capri-Sun, while SuperBite and Beefie have further strengthened the Group’s snacks portfolio. The transaction has also deepened leadership and operational capacity across the Group.
Speaking on the results, group managing director, UACN, Fola Aiyesimoju, said, “2025 was a pivotal year for UAC. The completion of the acquisition of C.H.I. Limited significantly increased the scale of our Group, with revenue reaching N343 billion, a 74 per cent increase compared to 2024.
“While Group profitability was impacted by N21 billion one-off acquisition costs, our underlying performance was strong, with profit before exceptional items rising by 76 per cent to N29 billion, from N16 billion in 2024. With the acquisition completed, our focus is on executing our value creation plan, prioritising margin recovery and working capital optimisation, to deliver stakeholder value consistent with our growth strategy.”
Segment performance reflected a mix of consolidation gains and macroeconomic headwinds. The Packaged Food and Beverages segment emerged as the Group’s largest contributor following the inclusion of CHI Limited, delivering N204.5 billion in full-year revenue.
The Paints segment also delivered another year of steady growth, supported by increased demand for premium products and improved product mix.
In the Edibles and Feeds segment, operating conditions remained challenging due to declining agricultural commodity prices. During the fourth quarter, the segment recognised an inventory write-down of N4.1 billion to net realisable value, a prudent measure that strengthens balance sheet resilience and supports improved margin performance going forward.
Beyond its operating subsidiaries, UAC also benefited from improved contributions from associate companies, supported by sales of non-core property assets at MDS Logistics Limited.
Looking ahead, UACN stated that it entered 2026 with a strengthened portfolio, improved earnings base, and a clear execution agenda, positioning the Group to unlock value from its expanded portfolio and deliver consistent long-term shareholder value.
-Leadership
The National Commissioner of the Nigeria Data Protection Commission (NDPC), Dr Vincent Olatunji, has stated that Data protection-related activities have generated over N16.2 billion for the Nigerian economy, creating employment opportunities for Nigerians in the digital ecosystem.
Speaking at a media training workshop in Lagos on the backdrop of the National Privacy Week 2026 “Privacy in the Era of Emerging Technologies: Trust, Ethics and Innovations” Dr Olatunji stated that this significant revenue is supplemented by additional income from licensing and penalties, describing privacy as a strategic confidence-building tool that will drive Nigeria’s digital transformation and attract investment.
He declared data privacy a fundamental human right and a critical pillar for trust, equity and freedom in Nigeria’s fast-growing digital economy, noting that the rapid adoption of telecommunications, artificial intelligence, robotics and digital platforms makes privacy protection no longer optional, but essential for national development.
The NDPC boss stressed that journalists must first understand the subject deeply before driving public awareness, emphasising that responsible reporting is key to building confidence in digital systems and protecting citizens’ rights.
He, however, traced the evolution of Nigeria’s data protection framework from the launch of the Nigeria Data Protection Regulation (NDPR) in 2019 to the establishment of the NDPC with full legal authority. He explained that the commission is driven by strategic pillars of awareness, human capital development, cooperation, technology-driven systems, strong governance, and sustainable funding.
According to him, these reforms have transformed the sector, growing the number of licensed Data Protection Officers from zero to over 7,000, with more than 23,000 professionals now working across the country’s data privacy ecosystem, supported by local certification programmes and a Virtual Privacy Academy.
He added that compliance in the public sector has improved significantly from an initial four per cent, as sector regulators now lead data protection efforts across their industries.
Olatunji stated that on the global stage, Nigeria is working with more than 40 countries and international data protection bodies, while NDPC is an active member of the Network of African Data Protection Authorities (NAPA), and a recent recipient of the Picasso Award as Africa’s most outstanding data protection authority.
Commenting, legal expert Barr. Alex Onwe, in a comprehensive overview of the Nigeria Data Protection Act (NDPA) 2023, asserted that the new law establishes a critical framework for safeguarding personal information in the digital age.
Onwe stated, “The foremost object of the NDPA is to safeguard the rights and freedoms of data subjects, as guaranteed under the Constitution”
While highlighting the law’s foundation in fundamental human rights, with its application extending to any entity processing the data of individuals in Nigeria, regardless of where the organisation is domiciled.
Barr. Onwe detailed the core principles organisations must follow, including lawful processing and stringent security measures, warning of severe penalties for non-compliance, including fines of up to two per cent of annual revenue.
He urged organisations to develop data privacy policies and ensure rigorous staff training. While adding that proactive adherence is not just a legal duty but essential for building trust, as the NDPC is empowered to enforce the Act through investigations, orders, and substantial penalties.
-Leadership
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