Otedola, Elumelu, Ovie, 6 other Nigerian billionaires pocket $19 billion in interest earnings

An analysis of interim financial statements filed with the Nigerian Exchange Limited revealed that interest income among nine leading banks surged 28 percent from $14.9 billion in the same period in 2023.

According to a Punch report, the institutions include Access Holdings Plc (controlled by the Herbert Wigwe Estate), First HoldCo (FirstBank, with majority shares owned by Femi Otedola), Zenith Bank Plc (founded by Jim Ovia), United Bank for Africa (UBA, led by Tony Elumelu), Guaranty Trust Holding Company, Stanbic IBTC Holdings, Sterling Financial Holding Company, Wema Bank, and Ecobank Transnational Incorporated.

Interest income represents earnings from lending, deposits, and investment securities, an area where these banking magnates have historically flourished.

Access Holdings topped the charts in absolute terms, earning $3.74 billion, a 21 per cent increase from the prior year. Zenith Bank followed with $3.53 billion, up 41 per cent, while Ecobank posted $3.01 billion, up 20 per cent. First HoldCo, the parent of FirstBank, earned $2.95 billion. Together, these four institutions accounted for most of the sector’s interest income.

Other banks also saw notable gains: GTCO rose 26 percent to $1.59 billion, UBA grew 10 percent to $2.55 billion, Wema Bank surged 73 percent to $512 million, while Sterling and Stanbic IBTC Holdings increased by 39 percent and 37 percent, respectively.

The revenue surge was primarily driven by Nigeria’s high-interest-rate environment, where banks earn from loans, investment securities, and cash reserves.

Governor Olayemi Cardoso said the reduction reflected “the increased momentum of disinflation in August.”

Still, global ratings agency Moody’s warned that the lower rate could compress net interest margins unless loan volumes rise.

“We expect yields on loans and government securities to fall faster than the cost of deposits,” Moody’s stated, noting that deposit costs adjust more slowly than lending rates.

As these billionaires enjoy record earnings, the broader sector faces a delicate balancing act: sustaining income growth while navigating the impact of policy changes. This narrative resonates across Africa’s rapidly expanding financial markets.