Nigerian banks are undergoing a significant transformation, shifting away from traditional lending models towards diversified revenue streams. This change is driven by economic challenges such as inflation, currency devaluation, and regulatory changes, which have made the traditional reliance on interest income from loans and government securities less sustainable. Banks are now focusing on non-interest income sources like digital banking, foreign exchange gains, and service fees to enhance profitability and ensure long-term growth.

Several leading Nigerian banks, including United Bank for Africa (UBA), Guaranty Trust Holding Company (GTCO), Zenith Bank, AccessCorp, ETI, First City Monument Bank (FCMB), Fidelity Bank, Stanbic IBTC, and Wema Bank, have demonstrated strong financial performance in 2024 by blending traditional banking with digital and transaction-driven services. This diversified approach is improving their financial stability and competitiveness in the global financial ecosystem.

UBA, for example, reported a 53.6 per cent surge in gross earnings, reaching N3.19 trillion in 2024. Profit before tax reached N803.72 billion, and profit after tax grew by 26.1 per cent to N766.6 billion. The bank's strategic focus on digital banking and foreign exchange operations has been pivotal, capitalizing on cross-border transactions and digital banking services to increase non-interest income. Investments in digital payment systems have further strengthened UBA's resilience against interest rate fluctuations and loan defaults.

GTCO achieved a historic pre-tax profit of N1.3 trillion in 2024, driven by a substantial increase in non-interest income through digital banking. Net fees and commission income surged by 73.4 per cent, and e-business revenue grew significantly. Strategic investments in digital banking infrastructure, including mobile banking solutions and fintech collaborations, have allowed GTCO to tap into new revenue streams and reduce dependence on traditional lending.

Ecobank Transnational Incorporated (ETI) has also repositioned itself as a modern banking powerhouse through digital transformation. In 2024, the group posted a profit after tax of N735.9 billion, a 179 per cent increase from the previous year. Investments in mobile banking, agency networks, and the Ecobank Mobile app have expanded its customer base and created low-cost transaction streams, driving fee and commission income. Effective management of foreign exchange volatility across its multi-jurisdictional operations has further contributed to its profitability.

Fidelity Bank reported a remarkable 210 per cent increase in profit before tax in 2024, reaching N385.2 billion. Gross earnings surged by 87.7 per cent, with non-interest income playing a crucial role. Enhanced digital banking capabilities have allowed Fidelity Bank to tap into a broader customer base, leading to higher transaction-based revenue. The bank's focus on asset quality and non-interest income growth has made it a standout performer.

Zenith Bank reported a profit after tax of N1.03 trillion in 2024, a 52.5 per cent increase from 2023, driven by innovative digital banking platforms and foreign exchange trading. Service fees from digital payments also contributed significantly. By embracing technology-driven growth, Zenith Bank has reduced its dependence on interest income and positioned itself as a key player in Nigeria’s evolving financial landscape.

Access Holdings reported a pre-tax profit of N867.02 billion in 2024, with gross earnings surging to N4.9 trillion. The bank has capitalized on its robust digital infrastructure, offering mobile banking, internet banking, and agency banking services. These digital services have generated substantial non-interest income through transaction fees and commissions.

Stanbic IBTC Holdings Plc reported a 60.2 per cent increase in profit before tax, reaching N303.8 billion in 2024. A significant surge in total interest income was complemented by non-interest revenue streams, particularly in digital banking fees and wealth management services. Strategic expansion into financial technology and digital banking has strengthened its position in the Nigerian banking sector.

FCMB’s gross earnings increased by 53.9 per cent to N794.8 billion in 2024, with profit before tax rising by 12.3 per cent to N117.2 billion. While interest income remains a key driver, non-interest income is becoming an essential pillar, driven by transaction fees, forex earnings, and digital banking revenues. Foreign exchange gains played a crucial role due to naira devaluation and increased forex transactions.

Wema Bank reported a 141 per cent increase in profit before tax in 2024, driven by strong interest income and success in digital banking. The ALAT digital banking platform has been central to this success, enabling the bank to reach new customers and generate increased transaction volumes. Focusing on digital services, forex gains, and service fees has reduced its reliance on traditional lending.

Across the Nigerian banking landscape, the shift toward non-interest income sources is gaining momentum, with banks incorporating digital banking, fintech partnerships, and transaction-based services. The rise of mobile banking, USSD services, and digital payments has provided new avenues for revenue generation. Foreign exchange activity has also become a key driver of profitability, particularly with the naira’s devaluation.

Looking ahead, Nigerian banks are expected to continue investing in digital banking, fintech collaborations, and diversified revenue models. Analysts from firms like Vetiva Capital Management, Afrinvest, and Cordros Capital highlight that banks are successfully capitalizing on foreign exchange revaluation and elevated interest rates. Afrinvest reported an 18.4 per cent growth in Nigeria’s financial sector, driven by digital banking and foreign currency gains. Cordros Capital emphasized the impressive growth in interest and non-interest income for banks like Access Bank.

The 2024 financial results of leading Nigerian banks underscore a transformative shift towards diversified income sources and digital innovation. This integration of traditional financial intermediation with digital finance, forex gains, and fee-based services marks a new era in Nigerian banking, driven by innovation, profitability, and long-term growth.

In Kenya, the banking sector is also focusing on sustainability and climate-related risk reporting, partnering with accountants to launch a new template that aligns with global benchmarks. The IFRS S1 and S2 template equips financial institutions to enhance decision-making and unlock opportunities in the transition to a low-carbon economy. This move follows the introduction of the EU’s new sustainability directives, which mandate compliance with Environmental, Social, and Governance (ESG) standards across global supply chains, impacting countries like Kenya. The horticulture sector, in particular, faces strict new regulations on managing pests and reducing pesticide use to remain competitive in the EU market.