CBN’s Tough Love Pays Off: Afrinvest Reveals Banking Windfall

Nigerian banks have recorded a sharp rise in interest income, hitting ₦15.4 trillion in the past year, largely due to the Central Bank of Nigeria’s aggressive monetary tightening.

The findings were contained in Afrinvest’s 20th edition of its annual Banking Sector Report, unveiled in Lagos as part of the firm’s 30th anniversary. The report, themed “ACT-BOLD: Beyond a Trillion-Dollar Economy,” highlighted how the Monetary Policy Committee raised benchmark rates by 875 basis points between February and November 2024, bringing rates to 27.5 percent.

Although the measures squeezed liquidity, they boosted lenders’ earnings, driving a 118.5 percent year-on-year increase in interest income, alongside trading gains of ₦2.3 trillion. Pre-tax profits surged 65.7 percent to ₦6.2 trillion.

On recapitalisation, the report noted that banks have raised about ₦2.5 trillion through rights issues, public offerings, and private placements, with Access Corp, Zenith Bank, Ecobank, and Lotus already meeting new thresholds ahead of the June 2026 deadline. Some institutions are considering mergers as part of their compliance strategies.

Afrinvest’s Group Managing Director, Ike Chioke, said the report identifies seven key sectors — agriculture, creatives, technology, banking and finance, oil and gas, logistics, and domestic manufacturing — as growth accelerators capable of pushing Nigeria beyond the $1 trillion GDP mark.

He stressed that savings from subsidy removals should be redirected into infrastructure, education, healthcare, and energy access to cushion hardship for the 133 million Nigerians living in poverty.

The firm’s chairman, Donald Lawson, represented by development economist Prof. Osita Ogbu, noted that Afrinvest’s legacy extends beyond numbers, citing its contributions to investment, infrastructure, and market growth. Looking ahead, Lawson said the company aims to deepen financial inclusion, expand its retail reach, and strengthen leadership in banking and fintech across Africa.

Afrinvest traces its roots back to 1995, when SecTrust, founded by Godwin Obaseki, later acquired Afrinvest Nigeria Limited, originally set up in London by Phillip Iheanacho.