Due to the Central Bank of Nigeria’s (CBN) increase of the Monetary Policy Rate (MPR) to 13% as of June from 11.5 percent in January 2022, a total of 13 banks generated N2.04 trillion in interest from customer loans, securities investments, among other things, in the first half year ended June 30, 2022.
From the N1.66 trillion generated by these 13 banks in the comparable half year ended June 30, 2021, this is a gain of 23%. The Central Bank of Nigeria (CBN) raised its benchmark rate together with other African economies in response to developments in major global economies in order to reduce inflationary pressures. The MPR was changed in July 2022 to 14%.
In H1 2022, the 13 banks generated N1.37 trillion in interest on loans and advances to customers, up from N1.09 trillion in H1 2021, according to an analysis by THISDAY. The 13 institutions include Access Holdings Plc, Zenith Bank Plc, FBN Holdings, Guaranty Trust Holdings Plc (GTCO), and Ecobank Transnational Incorporated in addition to United Bank for Africa Plc (UBA) (ETI). The others are Jaiz Bank Plc, Wema Bank Plc, Sterling Bank Plc, Union Bank of Nigeria Plc, Stanbic IBTC Holdings, FCMB Group Plc, and Fidelity Bank Plc.
The majority of Tier-1 banks benefited from the rise in interest rates in the African nations where they do business. In particular, ETI recorded N317.23 billion in interest income in H1 2022, up from N28.75 billion in H1 2021, while its interest on loans & advances to customers climbed to N168.72 billion in H1 2022, up 16.3% from N145.08 billion in H1 2021.
Access Holdings, a different pan-African bank, recorded N372.3 billion in interest income in the first quarter of 2022, up 16.5 percent from N319. 7 billion in the same period the previous year. Access Holdings also saw a 37% increase in interest on loans and advances to consumers, from N174.43 billion in H1 2021 to N238.9 billion in H1 2022.
Additionally, UBA’s interest income increased by 16% to N257.36 billion from N222.63 billion in H1 2021, while Zenith Bank’s interest income increased by 19% to N241.73 billion in H1 2022 from N203.9 billion in H1 2021.
GTCO’s ended H1 2022 with N147.2 billion in interest income, up 17% from N126.09 billion in H1 2021. The Holdings collected N103.3 billion from loans to clients in the first half of 2022, a 13.06 percent rise from N91.37 billion in the first half of 2021.
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