Nigeria’s top listed banks earned a combined N5.93 trillion from investment securities in 2024, a strong testament to the power of strategic asset allocation in a high-interest rate environment.
This windfall reflects an increasingly cautious approach by lenders, who pivoted heavily towards government bonds and treasury bills as a reliable engine of profitability amid economic uncertainty.
Securities income now accounts for a commanding 40 per cen5 of total interest income, up from 36.35 per cent in the previous year, as banks doubled down on near risk-free instruments to generate steady returns.
Total interest income across the group of banks soared to N14.8 trillion—an eye-watering 123 per cent rise from the N6.63 trillion reported in 2023—marking a record year for interest based revenues.
This growth was underpinned by a 196.5 per cent surge in the value of investment securities, which stood at N44.65 trillion as of December 2024.
In tandem, loans and advances rose to N55.75 trillion, while customer deposits reached N126 trillion, both contributing to robust earnings across the board. Altogether, these nine lenders—comprising Access Holdings, UBA, Zenith Bank, First Holdco, GTCO, FCMB, Fidelity, Stanbic IBTC, and Wema Bank— delivered a combined pretax profit of N5.96 trillion and post-tax profit of N4.8 trillion, each reflecting over 50 per cent growth year-onyear.
Access Holdings led the pack, earning N1.64 trillion from investment securities, which made up 47 per cen5 of its interest income. Its investment portfolio more than doubled to N11.34 trillion, diversified across amortised cost, FVOCI, and FVTPL assets—a strategy that maximizes yield while introducing calibrated risk. UBA followed closely, with N1.203 trillion in securities income, making up a striking 50.8 per cent of its total interest income—the highest proportion among peers.
Its N12.5 trillion investment book, the largest in the sector, was predominantly anchored in bonds held to maturity and fairvalue instruments. Zenith Bank earned N1.038 trillion, or 38 per cent of its interest revenue, while GTCO recorded N582.86 billion—a 230 per cent increase that pushed securities income to 43.4 per cent of its interest haul.
First Holdco wasn’t far behind with N849.66 billion in income, driven by a portfolio that surged 134 per cent to N6.54 trillion. Mid-tier banks also delivered robust performances. FCMB’s securities earnings reached N175.79 billion, Fidelity earned N163.42 billion, and Stanbic IBTC posted N161.40 billion—up nearly 350 per cent year-on-year.
Wema Bank nearly doubled its securities income to N113.67 billion, with such earnings now accounting for 32 per cent of its interest income. While this strategic migration into investment securities has fortified banks’ balance sheets and provided consistent income streams, it also raises long-term questions.
Chief among them: what happens when interest rates eventually decline? The heavy tilt toward fixed-income assets could pressure margins, especially if banks do not gradually pivot back to lending, which historically offers higher returns but comes with elevated risk.
