Among the top performers, Zenith Bank recorded the largest absolute increase, earning $551 million, while First HoldCo earned $458 million.

Economist and Managing Director at Time Line Consult Limited, Shuaibu Idris, said that while the figures appear impressive, the high earnings must be viewed alongside operational costs.

“Nigerian banks have historically earned high interest income, so much so that the government at one point introduced a super profit tax for banks. However, expenditure is significant, covering electricity, operations, and delinquent debt,” Idris explained. He noted that despite high income, dividend payouts often do not match the level of profitability seen in interest earnings.

Looking ahead, Idris suggested that earnings could remain sustainable even if interest rates decline.

“Inflation has been high, peaking at around 36%, which justified high interest rates. With inflation now easing, interest rates may come down. However, banks are expected to maintain revenue by managing risk assets efficiently and meeting capital requirements set by the Central Bank of Nigeria,” he said.

Idris added that the sector is entering an era of capital increases, meaning banks will work to sustain returns for a growing shareholder base.

“The ability to generate $19 billion in interest income annually is likely sustainable, as banks adapt to changing interest rates while protecting profitability,” he said.

–ChannelAfrica–