No fewer than 10 listed banks have declared a whopping N1.83trillion total pretax profits in their first quarter(Q1) 2025 financial results, LEADERSHIP checks have shown.
Similarly, most of the deposit money banks (DMBs) have positioned their balance sheets to benefit from forex adjustments and high-yield assets.
The concerned financial institutions are: Zenith Bank, Guaranty Trust Holding Company (GTCO), Wema Bank, Ecobank Transnational Incorporated (ETI), First HoldCo, United Bank for Africa (UBA), Access Holdings, FCMB Group, Fidelity Bank and Stanbic IBTC Holdings.
Most of these banks had earlier came into the capital market to raise funds for the ongoing banking recapitalisation and yet, still have enough financial acumen to record profit profit in the first quarter of the year.
A review of their unaudited Q1 2025 financial statements showed the banks sustained profitability despite economic headwinds such as foreign exchange volatility, persistent inflation, and rising operational costs. The results reflect continued earnings from high-yield government securities, customer loans, and foreign currency trading.
Apart from GTCO and First HoldCo that reported a decline in their profitability, others posted an increase when compared to the previous year. GTCO recorded N300.377 billion, down 41 per cent from N509.349 billion in Q1 2024, while First Holdco posted N186.479 billion, a 20.4 per cent drop from N234.168 billion.
Zenith Bank led the chart with N350.815 billion profit before tax, a 10 per cent rise from N320.194 billion recorded in Q1 2024. Fidelity Bank posted a profit before tax of N105.770 billion, up 168 per cent from N39.498 billion in Q1 2024.
Others are: ETI, Access Holdings, UBA, Stanbic IBTC Holdings, Wema Bank, and FCMB Group posted profit before tax of N267.305 billion, N222.782 billion, N204.266 billion, N116.415 billion, N41.158 billion and N35.020 billion in Q1 2025.
Speaking on the performance, the Group chief executive officer of GTCO, Segun Agbaje, said, ‘our Q1 2025 performance reflects the strength of all our business verticals and our capacity to generate strong and sustainable earnings.’
He stated that, “we remain optimistic about the year ahead. The fundamentals of our business are strong, our customer base continues to grow, and we are executing with discipline across our strategic priorities. Importantly, at this pace, the Group is well-positioned to deliver the full year PBT of 2024 at the very minimum by the end of the 2025 full year.”
Group managing director, UBA, Oliver Alawuba attributed the bank’s growth to prudent risk management and customer-centric innovation, saying, ‘our results underscore the effectiveness of our core banking focus.’
Financial analyst, Tajudeen Olayinka observed that the banks’ strong profits were partly driven by gains from currency revaluation and structured US dollar positions, adding that, ‘most DMBs positioned their balance sheets to benefit from forex adjustments and high-yield assets,’ he said.
The chief operating officer of InvestData Consulting Limited, Ambrose Omordion said, “as the financial year progresses, the critical determinants of future profitability and the capacity to deliver sustainable investor returns in what is now a more demanding operating environment will hinge on the banks’ ability to effectively manage their cost bases, strategically address the volatility of the naira, and rigorously maintain asset quality.”
He stated that, in 2025, the Nigerian banking sector is expected to see continued growth and resilience, driven by both strategic reforms and innovation, while also facing challenges like inflation and exchange rate fluctuations, adding that, in essence, the 2025 outlook for the Nigerian banking sector is cautiously optimistic, with expected growth fueled by reforms, innovation, and a stable financial environment, while navigating challenges like inflation and exchange rate fluctuations.
Analysts at CardinalStone Research said, “we view the banking sector recapitalisation as a net positive in the near to medium despite concerns over short-term dilution effects. For one, banks now have enough resources to enlarge interest-earning assets and scale up digital & technology platforms, with the former set to compensate for lower market yields in H2 2025 and the latter capable of combining with the positive macro backdrop to support fee and commission income.
“Nonetheless, the expected relative stability of the exchange rate suggests that banks may record lower fair value gains on derivatives, potentially reducing the growth of non-interest earnings,” they pointed out.
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