By Adewunmi Oluwaseun
Nigerian banks may record lower profits in 2025 as the naira’s newfound stability dries up the flood of foreign exchange revaluation gains that supercharged earnings last year, financial experts have said.
The currency’s steadiness, which follows decisive interventions by the Central Bank of Nigeria, signals the end of an era when devaluation fuelled outsized profit margins for the banking sector.
“There will be no foreign exchange gains this time. The naira has stabilised. So we do not expect banks to perform at the same level they did in 2024,” said Dr Paul Uzum, Executive Director at Hallo Capital Management Limited. “The focus now shifts to core banking — interest income, fees and operational efficiency.”
Dr Uzum added that while banks capitalised on FX windfalls during periods of volatility, the Q1 2025 results expected by the end of April may reflect more sustainable profit levels.
He stressed that this is not a sign of weakness but rather a return to normal business fundamentals.
“Banks with strong liquidity took advantage of past crises. But with FX gains off the table and interest rates beginning to moderate, we will see more modest earnings going forward,” he noted.
Chief Executive Officer of Cowry Asset Management Limited, Dr Johnson Chukwu, echoed this sentiment, warning that the days of spectacular returns may be numbered.
“With FX gains fading and interest rates expected to ease, profit margins may narrow.
However, banks that focus on non-interest income and strong loan growth will still remain attractive to investors,” he said.
In 2024, the top five banks — FBN Holdings, UBA, GTCO, Access Holdings and Zenith Bank — delivered a combined pre-tax profit of N5.1 trillion, marking a 59 percent leap from 2023.
Gross earnings climbed 80 percent, soaring from N9.6 trillion to N17.3 trillion, largely on the back of currency revaluation gains.
That tide, however, is now turning.
While the real sector was battered by FX losses last year, banks thrived.
This year, with the playing field more level and one-off currency gains off the ledger, the numbers may tell a different story — one driven not by crisis, but by performance.
