NewStats: 3,264,153 , 8,182,807 topics. Date: Monday, 09 June 2025 at 10:08 PM 3361

Nigerian banks have begun releasing their Q1 2025 results, and while many are still posting billions in profit, the era of runaway earnings growth may be drawing to a close.

For years now, Nigeria’s biggest banks, popularly referred to as the FUGAZ, have normalized quarterly pre-tax profits above N150 billion.

However, early numbers from this quarter suggest that growth is beginning to stall, and in some cases, reverse.

GTCO, one of the sector’s most efficient banks, saw its pre-tax profit fall sharply by 41% to N300 billion. FirstHoldCo wasn’t spared either, recording a 20.2% drop.

Access Holdings and Zenith Bank still posted modest growths of around 10%, but even that marks a steep drop from the triple-digit surges seen this time last year. So, what changed?

The cost of staying in business is rising

A closer look at the financial statements tells part of the story. Operating expenses are rising across the board, largely in response to spiraling inflation.

As the cost of doing business climbs, banks are spending more on everything—from technology to salaries. With bigger balance sheets, their overheads are also scaling up.

For instance, FirstHoldCo spent over N19 billion on advertising and promotion—a huge spike compared to last year.

Access Bank reported N41 billion in IT and e-business expenses, while Zenith Bank’s IT spend surged past N21 billion. Personnel expenses are also on the rise, as banks adjust wages and expand their workforce to growth.

In addition to inflationary pressures, banks are also seeing spikes in statutory costs. The controversial AMCON levy, a resolution fund fee, is taking a bigger bite out of profits.

Then there’s the sharp drop in foreign exchange revaluation gains—another major factor now weighing on bottom lines.

The forex windfall is drying up

Over the last two years, Nigerian banks recorded massive gains from forex revaluation, thanks to multiple currency devaluations. But with the naira now showing relative stability in 2025, those once-in-a-lifetime windfalls are tapering off.

Take Zenith Bank. Its trading gains dropped from N186.3 billion in Q1 2024 to just N12.8 billion this quarter. Last year, the bank made over N1 trillion in revaluation and trading gains.

GTCO’s story is even more dramatic, with unrealized FX gains plunging from N331 billion to just N1.5 billion.

This sharp drop was expected, but its effect on earnings is now clearly visible.

The EPS challenge looms

There’s another factor quietly at play: dilution from last year’s capital raises. In 2024, Nigerian banks raised nearly N2 trillion in fresh equity to meet recapitalization targets.

This means more shares in circulation—and therefore lower earnings per share (EPS), even if total profit still grows.

EPS is critical for valuations and investor sentiment. To maintain or grow EPS at 2024 levels, banks would need to significantly scale up profits—perhaps double or triple current levels.

That will be a tall order, especially as banks are now expected to grow earnings primarily through lending.

While interest rates remain high and risk-free instruments like treasury bills are attractive, expanding loan books in a fragile economy could increase non-performing loans.

Fortunately, most banks have built solid buffers by making provisions during the profitable years. But the risks remain.

What to expect going forward

While more Q1 results are yet to be released, the early signs point to a common trend: earnings growth is cooling off. This doesn’t mean banks are in trouble—it just means investors must adjust their expectations.

The Nigerian banking sector is still very profitable. But the days of bumper gains driven by one-off FX revaluations, underpriced equities, and windfall trading income may be behind us.

For investors, it’s time to watch how banks respond: Will they double down on lending? Will costs spiral further? Or will they find new, more sustainable paths to profit?

The golden era of easy bank profits may be fading. What comes next will demand better strategy—and a lot more patience.

https://nairametrics.com/2025/05/02/nigerian-banks-are-seeing-their-earnings-decline-and-it-could-get-worse/

The country is confusing me

Among other things include:
- The emerge of the likes of Opay as competitors
- The use of Loan App against the traditional bank for loan
- The Japa effect
- The increase in the use of internet banking/mobile app which increased cost of IT
- Last but not the least; The prevailing activities of Sapa

Tinubu will handle the economy

The Opay effect

I told a cashier in G.. that was raising shoulder during naira scacity period, that this big bank hall ll be converted to a museum or better still a poultry farm in 5-10 years time. She was still formimg untop of my unreversed 11k tilll date.

Fintech ll show them shege. Without a single major branch Opay and Moneipoint ll snatch all their customers like how sidechicks do it professionally

Economy in shambles. You were warned about APC.

Mesef no get sense for 2014 and 2019, but I thank God I got wiser in 2023. I could have been one of the people believing lies since 2014 if not for God-given wisdom. I pray they all receive common sense soon. Because nobody should go through life with this amount of foolishness.

OLE ni won

That's why they keep extorting us with their outrageous charges

After all the extortions?

I don't believe it

Tinubu will build it like he built Lagos, you people shouldn't worry at all. Vote him again in 2027 for continuity.

Everything is going down in this country, and we all know that it's due to clueless leaders we have. Hope God saves Nigeria

Careful4u:
Tinubu will handle the economy

shettima will handle insecurity.lol

Tinubulation on the beat...

Everything he touches dies.

And it will only get worse.

Greedy mofos who turned savings s to debit s. Charging for ATM card maintenance, sms alerts, withdrawal from another ATM and so on.

Opay and others to the rescue.

Una banking halls go soon close.

Yet CBEX de rip 1trillion from the economy in a short time. Shows the banks are not doing their job and the people have lost faith in them. They are just institutions to store money and even steal from customer. They add no value to their customers.

HE CAME TO KILL STEAL AND DESTROY

SUCH A STAIN ON THE ENTIRE SW

cnnamoko:
The Opay effect

I told a cashier in G.. that was raising shoulder during naira scacity period, that this big bank hall ll be converted to a museum or better still a poultry farm in 5-10 years time. She was still formimg untop of my unreversed 11k tilll date.

Fintech ll show them shege. Without a single major branch Opay and Moneipoint ll snatch all their customers like how sidechicks do it professionally

cnnamoko:
The Opay effect

I told a cashier in G.. that was raising shoulder during naira scacity period, that this big bank hall ll be converted to a museum or better still a poultry farm in 5-10 years time. She was still formimg untop of my unreversed 11k tilll date.

Fintech ll show them shege. Without a single major branch Opay and Moneipoint ll snatch all their customers like how sidechicks do it professionally

Yekiniology.

mean say dem been d cashout on us, now no more free cashout

Careful4u:
Tinubu will handle the economy

ClearFlair:
Economy in shambles. You were warned about APC.
Mesef no get sense for 2014 and 2019, but I thank God I got wiser in 2023. I could have been one of the people believing lies since 2014 if not for God-given wisdom. I pray they all receive common sense soon. Because nobody should go through life with this amount of foolishness.

Aify147:
Tinubu will build it like he built Lagos, you people shouldn't worry at all. Vote him again in 2027 for continuity.

reiddecuti:
Tinubulation on the beat...
Everything he touches dies.

Chikarata2020:
Everything is going down in this country, and we all know that it's due to clueless leaders we have. Hope God saves Nigeria

Is Opay and Moniepoint a joke to you guys? Everything is not politics. You need to start using that grey stuff between your ears.

ClearFlair:

What happened to the grey one between your own ears when they were posting fake data trying the deceive the masses? Is integrity even a thing to you?

How is this related to the topic of discussion here?

You actually need my earlier advice, and you need it urgently.

lexy2014:

How have you used "that grey stuff between your ears"?
How were you expecting them to use theirs?

From their comments, it appears like it is sawdust they have between their ears.

And do you share anything in common with them?

The profits were from round tripping...

Allocated FX were sold at huge profit margin at black market rates...when the gap between official and black market rate was high..

That's gone...they need to do the real work of giving investments loans and the likes to make profit now..

That's the only thing that has changed. We can all see manufacturing, oil and gas , and also FMCG declaring profits at Q1 2025....even Nestle that lose over 100 Billion in Q1 2024, as stabilised and posted a profit.

But banks...Na only dem dey get free money before...and now, it's no more

Walai:

Opay is bae

cnnamoko:
The Opay effect

I told a cashier in G.. that was raising shoulder during naira scacity period, that this big bank hall ll be converted to a museum or better still a poultry farm in 5-10 years time. She was still formimg untop of my unreversed 11k tilll date.

Fintech ll show them shege. Without a single major branch Opay and Moneipoint ll snatch all their customers like how sidechicks do it professionally

True, couple with the fact they no longer have access to unlimited forex.

cnnamoko:
The Opay effect

I told a cashier in G.. that was raising shoulder during naira scacity period, that this big bank hall ll be converted to a museum or better still a poultry farm in 5-10 years time. She was still formimg untop of my unreversed 11k tilll date.

Fintech ll show them shege. Without a single major branch Opay and Moneipoint ll snatch all their customers like how sidechicks do it professionally

A banker was complaining that people no longer bring money to bank for deposit, that they prefer to patronize POS operator. I just laughed, day just dey break for this bank

People still dey use bank?? Abi bank still dey exist?? .. except for my Wema shaa wey money dey enter fixed... Immediately fiam! I don move am go opay or palmpay.. piggyvest and the grand one.. my binance and bitget🤗

Just get a least half plot for farming

The round tripping game is now over !
Get back to core Banking.

cnnamoko:
The Opay effect

I told a cashier in G.. that was raising shoulder during naira scacity period, that this big bank hall ll be converted to a museum or better still a poultry farm in 5-10 years time. She was still formimg untop of my unreversed 11k tilll date.

Fintech ll show them shege. Without a single major branch Opay and Moneipoint ll snatch all their customers like how sidechicks do it professionally

Bros, this your writeup simply point to the fact that you don't even know how the banking sector work. So you're saying fintech and wallets will drive traditional banking out of circulation? Many of you don't even know that these so called fintechs rely on the structure of the traditional banks to run well.
Kindly mention a fintech today that does not maintain an with a traditional bank, can your fintech grant hundreds of billions to the government in form of loans? How many financial instruments can you invest in through the Opay you mentioned?
What's their assets base and how much do they pay as salaries? Can your Opay give APGs and other facilities to big corporations and individuals for business?

Make una just calm down with this Opay this, Palmpay that abeg.

Banks make there Money from buying dollar at #400 from Cbn and selling it to the public at #700 naira

The Era is gone

cnnamoko:
The Opay effect

I told a cashier in G.. that was raising shoulder during naira scacity period, that this big bank hall ll be converted to a museum or better still a poultry farm in 5-10 years time. She was still formimg untop of my unreversed 11k tilll date.

Fintech ll show them shege. Without a single major branch Opay and Moneipoint ll snatch all their customers like how sidechicks do it professionally

You forgot to add that Crypto Exchanges is now what people use to save money instead of using Banks. They just buy USDt and keep. In 10 years Banks will start to struggle real bad

How can banks that are reporting loan performance loss be saying they are making money ...I don't a dime in one of my current s this people just keeo on throwing it into more negative every month... that i have no reason to touch again in my life,they are just declaring paper money using depositors money to stay afloat.
To those saying opay and moniepoint..you very right ND wrong in a way ..those platforms still make use of normal banks to settle their interbank claims with Nibbs..so that's not the real reason of the downfall in profit..plus where on earth will industries be making loss only the banks will be making profits... Nigerian banks are one of the reason economy is down honestly.