Nigeria’s nine listed banks turned to high-quality debt instruments in 2024, booking a combined ₦5.93 trillion from investment securities—roughly 40 percent of total interest income of ₦14.804 trillion—as their securities holdings swelled to ₦44.649 trillion. Meanwhile, loans and advances rose to ₦55.746 trillion, customer deposits climbed to ₦126 trillion, and the sector delivered ₦5.96 trillion in pre-tax profits (₦4.799 trillion post-tax), underscoring a decisive pivot into near risk-free assets amid a high-rate environment.
Shift to Investment Income
As benchmark rates soared, banks leaned heavily on treasury bills, FGN bonds and OMO bills to lock in yields. Income from these securities jumped by 123 percent year-on-year, up from ₦6.63 trillion in 2023 to ₦14.804 trillion in 2024, with securities accounting for 40 percent of that total, compared with 36.35 percent a year earlier.
Expansion of Portfolios
By December 2024, the aggregate value of banks’ investment portfolios reached ₦44.649 trillion, nearly triple the ₦24.257 trillion at end-2023—a 196.49 percent increase that fueled much of the sector’s profit growth.
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Wema Bank
Wema Bank more than doubled its securities income to ₦113.68 billion, representing 32 percent of its ₦354.63 billion in total interest revenue, as its holdings in government bonds and T-bills rose 98 percent to ₦113.68 billion, locking in stable returns with minimal volatility.
Stanbic IBTC
Stanbic IBTC delivered one of the sharpest uplifts, with securities income surging 347 percent to ₦161.40 billion, or 28.5 percent of its interest income. The bank’s portfolio ballooned 149 percent to ₦1.085 trillion, allowing it to capitalise on rising yields.
Fidelity Bank
Fidelity Bank earned ₦163.42 billion from investment securities—a 143.25 percent jump—now contributing 17.5 percent to interest income. Despite the surge, loans and advances remained its primary revenue driver, as its fixed-income book expanded 65.5 percent to ₦1.81 trillion and was largely held to maturity for yield certainty.
FCMB
FCMB posted ₦175.79 billion in securities income (up 123.60 percent), making up 28 percent of its total interest intake. Its investments rose 49.6 percent to ₦1.19 trillion, chiefly at amortised cost with a modest fair-value tranche for portfolio flexibility.
GTCO
Guaranty Trust Holding Company PLC’s securities income rocketed 230.16 percent to ₦582.86 billion, representing 43.4 percent of its interest income. Its ₦4.15 trillion portfolio is split between ₦1.65 trillion at amortised cost and ₦2.5 trillion under FVOCI, balancing predictable returns with marked-to-market upside potential.
First Bank Holdings
First Holdco drew ₦849.66 billion from securities—35 percent of its interest revenue—as its holdings surged 134 percent to ₦6.54 trillion, mostly in bonds held to maturity alongside a smaller fair-value component for yield management.
Zenith Bank
Zenith Bank generated ₦1.038 trillion (a 165.56 percent increase) in securities income, 38.15 percent of its interest takings, with its debt book climbing to ₦5.1 trillion as T-bill and bond purchases more than tripled.
UBA
UBA topped half-trillion in securities income at ₦1.203 trillion—over 50.8 percent of its interest revenue—the only bank to exceed half its interest income from securities. Its portfolio, the sector’s largest at ₦12.5 trillion, grew 69.2 percent, focused on bonds held to maturity and FVOCI assets.
Access Holdings
Access led the league with ₦1.64 trillion in securities income—47 percent of interest income—doubling its ₦11.34 trillion portfolio across amortised cost, FVOCI, and FVTPL buckets to chase both stable returns and market-linked gains.
Risks and Outlook
While the pivot to government paper fortified earnings in a high-rate setting, a future decline in Central Bank rates could erode yields and compress net interest margins. Banks will need to recalibrate portfolios toward higher-margin loans or risk assets to sustain profitability once rates ease. Moreover, the tilt away from retail-risk lending—personal loans, SMEs, mortgages—may constrain broader credit growth and economic expansion if not balanced with targeted lending initiatives