April 26, (THEWILL) — Nigeria’s banking sector is entering a new phase of strength and strategic repositioning following the conclusion of the Central Bank of Nigeria’s (CBN) 24-month recapitalisation exercise, which has reshaped balance sheets, risk capacity, and profit drivers across Tier-1 lenders.
By the March 31, 2026, deadline, the country’s largest banks had collectively built a capital buffer exceeding N4.65 trillion, marking one of the most significant capital expansions in the industry’s history. Audited 2025 financial results show that while headline profitability remains strong, still hovering around trillion-naira levels for leading institutions, the composition of earnings is shifting toward more stable and recurring income streams.
The FUGAZ group (FirstBank, UBA, GTCO, Access Holdings, and Zenith Bank) led the recapitalisation drive, each exceeding the N500 billion minimum threshold required to retain international banking licences. FirstHoldCo emerged with the largest capital base at N789.42 billion following a N350 billion private placement, while Access Holdings reported N662.22 billion, reinforcing its position as the largest bank by assets. Zenith Bank closed with N614.65 billion in capital, while GTCO and UBA posted N514.04 billion and N511.82 billion, respectively, supported by retained earnings and capital raises.
As of April 22, 2026, while the Central Bank of Nigeria (CBN) has formally confirmed that both Access Holdings and UBA have successfully met the new N500 billion capital threshold for international licenses, their full-year audited financial statements for 2025 are currently awaiting final regulatory approval for publication. Consequently, performance metrics for these institutions are based on their latest Nine-Month (9M) 2025 interim filings and board-approved summaries.
Performance across the group remained robust despite the structural transition. Zenith Bank reported a Profit Before Tax (PBT) of N1.26 trillion and a Profit After Tax (PAT) of N1.04 trillion, even as earnings dipped slightly from the previous year. GTCO delivered N1.23 trillion in PBT and N865.75 billion in PAT, maintaining one of the strongest profitability ratios in the industry, supported by a 60.4 percent return on equity and a cost-to-income ratio of 27.9 percent.
Access Holdings posted N867 billion in PBT and N642.2 billion in PAT based on its latest available filings, driven by significant growth in gross earnings and expanding digital income streams. UBA recorded N537.53 billion in PAT for the nine-month period, reflecting steady performance across its 20 African markets and diversified revenue base. FirstHoldCo reported N893 billion in PBT but saw PAT decline sharply to N45 billion from N677 billion in 2024, largely due to elevated impairment charges and asset quality pressures.
A major theme across the 2025 results is the shift in earnings composition. Banks are increasingly relying on interest income derived from government securities, as well as non-interest income driven by electronic banking. In a high-interest-rate environment, with the Monetary Policy Rate (MPR) at 26.5 percent, yields on Treasury Bills and bonds have remained elevated, encouraging banks to channel liquidity into relatively low-risk instruments. Zenith Bank’s interest income rose 35 percent to N3.7 trillion, reflecting this strategic pivot.
Across the sector, total investments in government securities climbed to approximately N49.15 trillion by late 2025, underscoring a broader move toward capital preservation and predictable returns. While this shift enhances income stability, it also signals a more cautious lending posture, with implications for private sector credit expansion.
At the same time, electronic banking has evolved into a central pillar of profitability. In the first quarter of 2025 alone, leading banks generated N165.2 billion from digital channels, highlighting the scale and consistency of this revenue stream. Zenith Bank recorded N89.13 billion in e-banking income alongside N91.95 billion in account maintenance fees, while GTCO generated N64.72 billion from electronic banking, supported by growth in its fintech subsidiary, HabariPay.
Access Holdings reported a 44.8 percent increase in e-banking revenue to N48.35 billion in the early part of 2025, reflecting its aggressive push into digital channels. UBA, leveraging its presence across 20 African jurisdictions, processed transactions worth over N25.6 trillion on mobile platforms alone, reinforcing the growing dominance of digital banking across the continent.
The forward outlook for Q2 2026 hinges on whether banks can sustain fee-based income growth to hedge against potential moderation in government security yields.
This evolving earnings mix, anchored on stable interest income and expanding digital revenues signals a more resilient banking model, one that is better aligned with long-term economic growth and less dependent on volatility-driven windfalls.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
