Nigeria’s listed banks earned a combined N5.93 trillion from investment securities in 2024, a sharp rise highlighting how lenders leaned into safe, high-yield assets during the year.
The income from securities formed a major part of the banks’ total interest income of about N14.804 trillion, which itself doubled by 123% compared to N6.63 trillion in 2023.
Securities income contributed about 40% of total interest income, up from 36.35% a year earlier, highlighting a subtle but important shift in how banks made their money.
This growth was driven largely by the rapid expansion of banks’ investment portfolios.
As of December 2024, the combined value of their investment securities stood at N44.649 trillion, a 196.49% jump from N24.257 trillion a year earlier.
Loans and advances also grew; N55.746 trillion versus N39.693 trillion in 2023, while total deposits rose to N126 trillion, about 50% higher than the 2023 figures.
Together, these fueled an impressive bottom-line performance, with the nine banks reporting combined pre-tax and post-tax profits of N5.96 trillion and N4.799 trillion, respectively, both more than 50% higher year-on-year.
These banks include the FUGAZ group (First Bank Holdings, UBA, GTCO, Access, and Zenith), as well as FCMB, Fidelity, Stanbic IBTC, and Wema clearly capitalized on the elevated interest rate environment.
However, their individual strategies and performances varied considerably
Wema Bank: N113.67 billion (+97.90% YoY)
Wema nearly doubled its securities income to N113.67 billion, making up 32% of total interest income N354.633 billion, up 91.03% YoY.
Its investment portfolio swelled by 44% to N900.23 billion, mostly in safe assets like T-bills and bonds, locking in stable returns with minimal volatility.
Stanbic IBTC: N161.40 billion (+347.20% YoY)
Stanbic IBTC recorded one of the sharpest jumps, growing securities income nearly fourfold to N161.4 billion, 28.5% of total interest income.
The bank boosted its securities holdings by 149% to N1.085 trillion, capitalizing on rising yields.
Fidelity Bank: N163.42 billion (+143.25% YoY)
Fidelity earned N163.4 billion from investment securities, now contributing 17.5% to total interest income.
Though securities income grew faster, loans and advances remained the primary driver.
Fidelity expanded its portfolio 65.5% to N1.81 trillion, largely held to maturity.
FCMB: N175.79 billion (+123.60% YoY)
FCMB pulled N175.8 billion from securities, about 28% of total interest income.
The value of its investment portfolio grew by 49.6% to N1.19 trillion
Most of these investments are kept until maturity (amortized cost), with a small increase in buying stocks and bonds that are revalued at market prices (fair value).
GTCO: N582.86 billion (+230.16% YoY)
GTCO’s securities income exploded 230% to N582.86 billion, now accounting for 43.4% of its interest income.
Its portfolio climbed 68% to N4.15 trillion. The growth in its investment portfolio shows a strategic move to capitalize on high interest rates.
Most of the portfolio (N1.65 trillion) is held at amortized cost, ensuring stable and predictable returns.
A large portion (N2.5 trillion) is classified under FVOCI; assets that can fluctuate in value, providing some opportunity for higher returns, but also introducing more risk.
First Holdco: N849.66 billion (+205.15% YoY)
First Holdco earned N849.66 billion from securities, representing 35% of interest income.
Investments surged by 134% to N6.54 trillion, mostly in bonds that can are held till maturity and the ones that can fluctuate in value positioning for both yield and relative balance sheet protection.
Zenith Bank: N1.038 trillion (+165.56% YoY)
Zenith Bank posted N1.038 trillion in securities income, 38.15% of its interest revenue.
Income from T-bills and bonds more than tripled, while the investment portfolio rose to N5.1 trillion.
UBA: N1.203 trillion (+137.05% YoY)
UBA’s securities income crossed N1.2 trillion, over half (50.8%) of its interest income the only bank to cross that mark.
It grew its investment portfolio by 69.2% to N12.5 trillion, the largest among peers, heavily tilted toward bonds held to maturity and FVOCI (Fair Value Through Other Comprehensive Income)
Access Holdings: N1.64 trillion (+100.50% YoY)
Access led the pack, earning N1.64 trillion from securities, 47% of total interest income.
Access Holdings doubled its investments to N11.34 trillion, spreading them across three types of assets:
- Amortized cost (safe, steady returns)
- FVOCI (flexible, but less risky)
- FVTPL (riskier, with price swings impacting profits)
This strategy targets strong returns but increases exposure to market risks, especially if bond markets fluctuate.
Key Takeaway:
The stronger contribution of investment securities to earnings highlights how banks strategically shifted towards near risk-free assets like government bonds and treasury bills.
- In a high-interest rate environment, these provide a safer and more reliable path to grow income while minimizing lending risks.
- However, this heavy reliance on securities income presents a caution: when interest rates eventually decline, banks could face pressure on yields unless they reposition their portfolios toward higher-margin lending or other riskier assets.
Importantly, while the surge in securities earnings has strengthened banks’ profitability and stability, it also suggests a slowdown in the creation of retail risk assets such as personal loans, SME financing, and mortgages, which could, over time, constrain broader economic growth.