UBA, Zenith Lead as CBN's Bold Decisions Help Seven Nigerian Banks Boost Income From Customers to N2.54trn
- UBA and Ecobank are among the seven Nigerian deposit money banks that saw their interest incomes rise significantly in 2022
- This is thanks to the CBN's decision to hike interest in 2022, boosting the revenue from customers' loans
- The interest income earnings provided significant support for banks to record improved profits for the year
In 2022, the Central Bank of Nigeria (CBN) made significant decisions to raise the interest rate four times from 11.5% in March to 16.5% at the end of December 2023.
The move appears to have paid off, as data obtained from the financial statements of seven banks in Nigeria show that their interest income from customers increased by 25.1% to N2.54 trillion from the previous year's figure of N2.03 trillion.
Source: Getty Images
Bank interest income refers to the money earned from the interest charged on customers' loans and advances. Also, banks can make income from investments such as government bonds.
When the CBN adjusts its monetary policy, banks tend to follow suit to ensure that the policy favours them. This often results in customers who have taken out loans being forced to pay higher interest rates than the previously agreed rate.
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The seven banks that experienced this remarkable increase in interest income include Zenith Bank Plc, United Bank for Africa Plc (UBA), Ecobank Transnational Incorporated (ETI), Fidelity Bank Plc, FCMB Group, Stanbic IBTC Holdings Plc, and Wema Bank Plc.
Breakdown of interest income by banks
- Zenith Bank Plc reported N540.17 billion interest income for 2022, up 26.3% from N427.6 billion in the previous year, BusinessDay reports.
- United Bank for Africa Plc (UBA)'s interest income increased by 17.4% to N557.15 billion from N474.26 billion.
- Ecobank Transnational Incorporated (ETI)'s interest income grew to N690.54 billion from N603.37 billion.
- Fidelity Bank Plc reported interest income that jumped 48.4% to N277.26 billion in 2022 from N186.78 billion in 2021.
- FCMB Group's interest income increased by 35.5% to N219.55 billion from N162.04 billion.
- Stanbic IBTC Holdings Plc saw its interest income rise 45.7% to N152.67 billion in 2022 from N104.75 billion.
- Wema Bank Plc's interest income grew by 39.5% to N104.39 billion from N74.8 billion.
List of Nigeria's most valuable banks after Q1, 2023
Meanwhile, in another report, Legit.ng disclosed the list of Nigerian most valuable banks based on market capitalization after the first quarter of 2023.
Zenith Bank and GT Bank were the most valued commercial banks on the Nigerian market retaining their position from the start of the year
First Bank is the only bank that saw its market value drop during the first quarter of 2023.
Source: Legit.ng
