Zedcrest: Nigerian banks to maintain strong profitability
Nigerian banks delivered triple-digit profit growth in 2024, but can we expect that momentum to be sustained this year? Analysts at Zedcrest Wealth believe so, they say a robust interest income, digital transformation and sustained elevated interest rates will be the key drivers. They also note that the recapitalisation drive will enhance banking profits. Gbeminiyi Shopeju, Investment Analyst at Zedcrest Wealth joins CNBC Africa to share their outlook for the sector.
Mon, 06 Jan 2025 15:35:57 GMT
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AI Generated Summary
- The banking sector in Nigeria achieved triple-digit profit growth in 2024, driven by robust interest income and digital transformation.
- Analysts anticipate sustained profitability in 2025, with a focus on government securities and non-interest income.
- Policy changes and monetary environment shifts are expected to influence banking sector dynamics in the coming year.
Nigerian banks are gearing up for another year of solid profitability, with analysts at Zedcrest Wealth predicting sustained growth in 2025. The banking sector in Nigeria saw triple-digit profit growth in 2024, buoyed by robust interest income, digital transformation, and sustained elevated interest rates, according to Gbeminiyi Shopeju, Investment Analyst at Zedcrest Wealth. Shopeju highlighted the impact of recapitalization efforts on enhancing banking profits during an interview on CNBC Africa. In the midst of economic challenges and policy changes, Nigerian banks are primed to navigate potential risks and capitalize on tailwinds to maintain their financial strength. Looking ahead, the sector is expected to stay resilient, driven by a mix of traditional revenue streams and emerging opportunities in the digital space. The focus on government securities and non-interest income is poised to support profitability, even as the policy environment undergoes shifts and adjustments. Shopeju's optimistic outlook underscores the potential for Nigerian banks to thrive amid evolving market dynamics and regulatory changes.
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