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6 banks generate ₦1.4 trillion from loans, advances in Q1, 2024

The high revenue earned by the banks during the period are proceeds of the recent CBN interest rate hike.

6 banks generate ₦1.4 trillion from loans, advances in Q1, 2024 [Pishon Design Studio]

Some Nigerian banks have taken advantage of the Central Bank Of Nigeria’s (CBN) interest rate hike to swell their profits in the first quarter of 2024.

An analysis of the banks’ Q1 2024 results revealed that six financial institutions recorded high revenue amounting to ₦1.41 trillion from interest on loans and advances to customers in the period under review.

The banks include Access Holdings Plc, Guaranty Trust Holding Company Plc (GTCO), United Bank for Africa Plc (UBA), Zenith Bank Plc, Ecobank Transnational Incorporated Plc (ETI) and Fidelity Bank Plc.

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A breakdown of the six banks’ earnings is shown below:

The bank earned ₦335.84 billion from interest paid from loans to customers. This revenue indicated a 125% increase from ₦149.1billion earned in Q1 2023.

Ecobank declared ₦326.73 billion interest income from loans to customers in Q1 2024 representing a 178.6% growth from ₦117.3 billion reported in Q1 2023.

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Zenith Bank posted ₦300.5 million interest income from loans to customers in Q1 2024, representing 142.6% growth from ₦123.87 billion in Q1 2023.

UBA announced revenue of ₦195.31 billion from loans to customers in Q1 2024, showing a 103.3% rise from ₦96.05 billion reported in Q1 2023.

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Fidelity Bank earned ₦128.54 billion in interest income from loans to customers in Q1 2024, representing about 74% from ₦73.91 billion in Q1 2023.

GTCO posted ₦122.04 billion interest income from loans to customers in Q1 2024, showing a 92% increase from ₦63.59 billion declared in Q1 2023.

According to some financial experts, the high revenue earned by the banks during the period are proceeds of the recent CBN interest rate hike.

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Recall the CBN Governor, Olayemi Cardoso in February 2024, raised the monetary policy rate (MPR), from 18.75% to 22.75%. This was raised again in March 2024 to 24.75%

While this move has been hailed as a strategic operation to curb the inflation surge, it has also raised concerns regarding its impact on the cost of credit for businesses currently facing harsh economic realities.

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