UBA, Zenith lead as CBN bold decisions help boost seven Nigerian Banks' income from customers to N2.54trn

In 2022, the Central Bank of Nigeria (CBN) made significant decisions to raise the interest rate four times from 11.5 percent in March to 16.5 percent as 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.

Bank interest income refers to the amount of 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 favors them. This often results in customers who have taken out loans being forced to pay higher interest rates than the previously agreed-upon rate.

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): interest income increased by 17.4% to N557.15 billion from N474.26 billion.

Ecobank Transnational Incorporated (ETI): interest income grew to N690.54 billion from N603.37 billion.

Fidelity Bank Plc: interest income jumped 48.4% to N277.26 billion in 2022 from N186.78 billion in 2021.

FCMB Group: interest income increased by 35.5% to N219.55 billion from N162.04 billion.

Stanbic IBTC Holdings Plc: interest income rose 45.7% to N152.67 billion in 2022 from N104.75 billion.

Wema Bank Plc: interest income grew by 39.5% to N104.39 billion from N74.8 billion.