Driven by Interest Income, 12 Banks Generated N7.2tn Gross Earnings in Q1

Kayode Tokede 

Following the tightening of monetary policy by the Central Bank of Nigeria (CBN) that significantly boosted banks’ interest earnings, Access Holdings Plc, Ecobank Transnational Incorporated and 10 other banks posted a combined N7.2 trillion gross earnings in the first quarter ended March 2026, a 12.8 per cent increase when compared to N6.4 trillion recorded in the same period in 2025. 

The 10 other banks are: First HoldCo Plc, United Bank for Africa (UBA) Plc, Guaranty Trust Holding Company Plc (GTCO) FCMB Group Plc, Wema Bank Plc, Sterling Financial Holdings Company, Jaiz Bank Plc and Stanbic IBTC Holdings Plc.

The sharp rise in interest rates following the monetary tightening policy of the CBN has significantly boosted banks’ interest earnings. With higher lending rates and improved yields on government securities, banks have generated much stronger income from: Commercial and retail loans, Treasury Bills, Federal Government bonds and placements with other financial institutions.

In recent times, most Tier-1 banks have reported substantial increases in net interest income as loan yields rose faster than their funding costs.

THISDAY analysis of the banks financial reports showed that Access Holdings recorded N1.375 trillion gross earnings in Q1 2026, from N1.38 trillion in Q1 2025. 

ETI to declared N1.14 trillion gross earnings, representing an increase of 8.5 per cent from N1.05 trillion reported in Q1 2025.

Zenith Bank posted NN1.01 trillion gross earnings in Q1 2026, about 6.1 per cent increase over N949.9 billion reported in Q1 2025.   

On its part, First Holdco posted N942 billion gross earnings, up by 26.8 per cent from N742.7 billion declared in Q1 2025 while UBA closed Q1 2026 with gross earnings of N801.46 billion, about 4.86 per cent increase over N764.3 billion in Q1 2025.  

In addition to Tier 1 banks gross earnings was  GTCO that declared N527.3billion earnings, representing an increase of nearly 18 per cent from N448. billion announced in Q1 2025.   

Cumulatively, the 12 banks achieved profit before tax of N2.14 trillion during the period under review, up by 15.4 per cent when compared to N1.86 trillion in Q1 2025.

Meanwhile, analyst believed that the resilience demonstrated by the banking sector is not only a testament to the adaptability of financial institutions but also an indication of future opportunities, especially for investors eyeing stable returns.

However, they warned that with interest rates expected to moderate and the naira projected to strengthen with reduced volatility, the banks’ profit margins could come under pressure this year.

The experts remained bullish on the banking sector topline performance noting that banks with robust loan book growth and strong non-interest income strategies, especially those capitalising on trading activities, will likely remain attractive to investors.

Speaking, investment banker and stockbroker, Tajudeen Olayinka, said the Q1 2026  results confirm the banking sector’s inherent strength and its ability to thrive even in challenging economic times.

“Banks have shown they can perform under any condition, whether it is high inflation or high interest rate. This is because banking fundamentally revolves around liability generation and asset creation, making it a portfolio of opportunities in any economy,” he said.

Olayinka expressed that the sustainability of the strong performance hinged on the continuity or expansion of economic opportunities.

On his part, the vice president, Highcap Securities Limited, Mr David Adnori stated that Nigerian banks’ performance in the Q1 2026 offers a positive signal for what lies ahead in 2026.

According to him, the strong topline and bottom-line growth recorded by most banks came despite prevailing regulatory and economic challenges, reflecting the sector’s strategic resilience.

He attributed the surge in bank earnings primarily to expanded topline revenues and efficient treasury portfolio management, especially trading gains amid market volatility.

“The banks have consistently delivered stellar performances year after year, and 2024 was no exception. This time, high interest rates and currency fluctuations worked to their advantage. Also, the Central Bank of Nigeria’s decision to raise the Cash Reserve Ratio (CRR) to 50per centorced banks to think creatively about liquidity management, leading many to issue short-term commercial papers as alternative funding sources,” he said.

He explained, led to significant growth in customer deposits, loan portfolios and non-interest income streams, bolstered by elevated interest rates and windfall profits.

Adnori added that if the CBN pivots toward monetary easing in 2025 to support economic growth, as many analysts expect, the sector could experience slight margin compression.

“But even with tighter margins, we anticipate that the banks will still deliver respectable topline growth and profits,” he said.