Nigeria’s banking sector posted vital development in 2024, with complete property surging to N170.02 trillion, marking a 39.6% year-on-year enhance from N121.8 trillion in 2023.
That is in accordance with the State of Enterprise (SOE) Report 2025, which analyzed key financial and monetary indicators throughout sectors.
The report highlights the sector’s resilience within the face of a difficult financial local weather marked by excessive inflation and a pointy devaluation of the naira.
Since 2023, the native forex has weakened considerably, depreciating from N450 to N1,600 per US greenback, following the overseas trade unification coverage launched by President Bola Tinubu in Might 2023.
The coverage successfully ended Nigeria’s a number of trade fee system, beforehand maintained below former President Muhammadu Buhari and the Central Bank of Nigeria (CBN).
Monetary Sector’s Rising Financial Affect
In line with the report, the monetary providers sector’s contribution to nationwide output elevated, with monetary establishments producing N6 out of each N100 of Nigeria’s GDP in 2024, an uptick from N5 per N100 the earlier yr. This underlines the sector’s rising structural relevance and its increasing footprint within the broader economic system.
When it comes to market exercise, remittance inflows by banking channels noticed a slight uptick from $19.55 billion in 2023 to $19.8 billion in 2024, as members of the Nigerian diaspora continued to help kinfolk and native companies by formal cash switch providers.
The rise of digital monetary providers was much more pronounced. Level-of-Sale (POS) transactions reached N18.15 trillion in 2024, up 69.6% from N10.7 trillion the earlier yr, signaling a shopper shift away from conventional banking halls and towards extra accessible and tech-driven cost options.
Moreover, digital cost transactions, together with cell banking and on-line transfers, climbed dramatically from N600 trillion in 2023 to N1.078 quadrillion in 2024, reflecting deepening digital adoption and monetary inclusion.
Sector Outlook and Danger Concerns
In line with the report, “Between 2015 and 2024, the worth of banking sector property recorded a compound annual development fee (CAGR) of twenty-two.1%. Whereas this development displays deepening monetary intermediation, a part of the nominal enlargement was influenced by forex depreciation in opposition to the US greenback in the course of the interval.”
Regardless of currency-related distortions, the sector’s asset base now represents 63.1% of Nigeria’s nominal GDP, up from 52% in 2023, reflecting its continued significance in driving financial exercise.
What You Ought to Know
Looking forward to 2025, the report identifies mortgage portfolio enlargement, fixed-income funding positive factors, and digital innovation as key development drivers for Nigerian banks, significantly efforts to spice up non-interest revenue streams.
- Nevertheless, the report additionally flags rising dangers. Chief amongst them is credit score publicity to the oil and fuel sector, which will increase banks’ vulnerability to fluctuations in world oil costs and overseas trade volatility.
On a extra optimistic observe, impairment expenses, the prices banks incur to account for potential mortgage losses, are anticipated to say no, suggesting a gradual enchancment in macroeconomic stability and credit score high quality.
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