By Chinwendu Obienyi
Despite rising inflation and successive interest rate hikes by the Central Bank of Nigeria’s Monetary Policy Committee (MPC), the banking sector experienced robust confidence, reflected in substantial growth in deposits and capital inflows.
This discovery follows an in-depth analysis by Daily Sun of the audited financial statements of seven banks for the year ended December 31, 2024, which revealed a surge of over N900 billion in new deposits, signaling strengthened investor confidence and growing customer trust.
The success came through strategic and innovative steps taken by the banks, especially in the use of technology.
The financial institutions include; Zenith Bank, Guaranty Trust Holding Company (GTCO), United Bank for Africa (UBA), Ecobank Transnational Incorporated (ETI), Fidelity Bank, Stanbic IBTC and Wema Bank Plc.
Deposits refers to money lodged into a bank or financial institution by an individual, business or organisation.
It could be in the form of savings, current, fixed term and demand deposits. Deposits are important for banks as they use them to provide loans and support economic activities.
Zenith Bank led the surge in customer deposits, recording a remarkable 102.08% increase from N306.75 billion in 2023 to N622.01 billion in 2024. GTCO followed with deposits rising from N102.76 billion to N220.47 billion, while UBA saw its customer deposits grow from N14.89 billion to N21.89 billion.
Similarly, ETI, Fidelity Bank, Stanbic IBTC, and Wema Bank recorded deposit growth, reaching N31.64 billion, N5.94 billion, N3.0 billion, and N2.52 billion, respectively. Collectively, these banks saw customer deposits climb to N907.47 billion, a substantial rise from the N450.461 billion recorded in 2023.
Financial analysts attributed this impressive deposit growth to strategic capital-raising initiatives, improved financial soundness indicators, a surge in retail deposits, a bullish stock market, and regulatory reforms. They noted that, despite economic headwinds such as inflation and currency depreciation, the banks have maintained strong liquidity.
Inflation, which peaked at 34.8% in late 2024, has begun to ease, with the National Bureau of Statistics (NBS) reporting a decline to 23.18%. However, the naira remains under pressure, depreciating by 0.5% to close at N1,538.70/$1 in the official market despite the Central Bank’s $69.50 million intervention.
In the last one year, the naira’s value dropped significantly, closing at N1,535/$1 in the official market, a 40.9% decline. In the parallel market, it depreciated by 26.8% to end the year at N1,660/$1, highlighting the ongoing currency challenges despite market interventions.
UBA’s Group Managing Director/Chief Executive Officer, Oliver Alawuba, who expressed excitement at the results, stated that the 2024 financial performance demonstrates the bank’s continued focus on driving earnings growth, preserving asset quality, expanding business operations and deepening market share.
“Our continued investment in our highly diversified global network allows UBA to deliver high-quality, consistent earnings. Our businesses have been able to grow product and service income and expand our deposit base, allowing the Group to increase earnings while maintaining strong spreads and margins,” Alawuba highlighted.
According to him, the just results reflect broad-based growth across all core businesses and were achieved despite prevailing macroeconomic challenges, geopolitical uncertainties, and exchange rate volatilities.”
Also speaking, the Chief Executive Officer, Ecobank Group, Jeremy Awori expressed strong satisfaction with the bank’s 2024 full-year financial results, emphasizing the resilience of its diversified operations across 33 African markets.
He highlighted that despite challenges such as high inflation, rising interest rates, and currency fluctuations, Ecobank achieved a record pre-tax profit of $658 million, a 33 per cent year-on-year growth in constant currency terms.
Despite these achievements, challenges such as liquidity constraints persisted, with banks borrowing heavily from the CBN to address funding gaps. Nonetheless, the sector’s overall performance reflects renewed confidence and a strong foundation for future growth.