Naira slides, however Nigeria’s {bank} belongings leap 40% to N170 trillion in 2024 — SOE Report
Nigeria’s banking sector posted vital progress in 2024, with complete belongings surging to N170.02 trillion, marking a 39.6% year-on-year improve from N121.8 trillion in 2023.
That is in line with the State of Enterprise (SOE) Report 2025, which analyzed key {economic} and {financial} indicators throughout sectors.
The report highlights the sector’s resilience within the face of a difficult {economic} local weather marked by excessive inflation and a pointy devaluation of the naira.
Since 2023, the native forex has weakened considerably, depreciating from N450 to N1,600 per US greenback, following the overseas change unification coverage launched by President Bola Tinubu in Might 2023.
The coverage successfully ended Nigeria’s a number of change fee system, beforehand maintained beneath former President Muhammadu Buhari and the Central {Bank} of Nigeria (CBN).
{Financial} Sector’s Rising {Economic} Affect
In keeping with the report, the {financial} companies sector’s contribution to nationwide output elevated, with {financial} establishments producing N6 out of each N100 of Nigeria’s GDP in 2024, an uptick from N5 per N100 the earlier 12 months. This underlines the sector’s rising structural relevance and its increasing footprint within the broader financial system.
By way of market exercise, remittance inflows by means of banking channels noticed a slight uptick from $19.55 billion in 2023 to $19.8 billion in 2024, as members of the Nigerian diaspora continued to help kin and native companies by means of formal cash switch companies.
The rise of digital {financial} companies was much more pronounced. Level-of-Sale (POS) transactions reached N18.15 trillion in 2024, up 69.6% from N10.7 trillion the earlier 12 months, signaling a shopper shift away from conventional banking halls and towards extra accessible and tech-driven fee options.
Moreover, digital fee transactions, together with cellular banking and on-line transfers, climbed dramatically from N600 trillion in 2023 to N1.078 quadrillion in 2024, reflecting deepening digital adoption and {financial} inclusion.
Sector Outlook and Threat Concerns
In keeping with the report, “Between 2015 and 2024, the worth of banking sector belongings recorded a compound annual progress fee (CAGR) of twenty-two.1%. Whereas this progress displays deepening {financial} intermediation, a part of the nominal enlargement was influenced by forex depreciation towards the US greenback in the course of the interval.”
Regardless of currency-related distortions, the sector’s asset base now represents 63.1% of Nigeria’s nominal GDP, up from 52% in 2023, reflecting its continued significance in driving {economic} exercise.
What You Ought to Know
Looking forward to 2025, the report identifies mortgage portfolio enlargement, fixed-income funding features, and digital innovation as key progress drivers for Nigerian banks, notably efforts to spice up non-interest revenue streams.
- Nonetheless, the report additionally flags rising dangers. Chief amongst them is credit score publicity to the oil and gasoline sector, which will increase banks’ vulnerability to fluctuations in international oil costs and overseas change volatility.
On a extra optimistic notice, impairment expenses, the prices banks incur to account for potential mortgage losses, are anticipated to say no, suggesting a gradual enchancment in macroeconomic stability and credit score high quality.
