Lagos, Nigeria | September 22, 2025
The half-year (H1) earnings season for Nigerian banks has revealed a sharp slowdown in foreign exchange (FX) revaluation gains, signaling the end of the extraordinary windfalls that buoyed the industry in 2023 and 2024.
Analysts note that while lenders still reported strong top-line growth, the FX gains that previously masked underlying pressures have begun to taper, leaving banks more exposed to core operational realities such as loan performance, interest rate fluctuations, and rising operating costs.
In 2023 and early 2024, the harmonisation of Nigeria’s exchange rates and repeated naira devaluations created massive revaluation gains for banks, boosting profits and strengthening capital buffers. However, with the naira showing greater stability in recent months, that cushion has weakened.
Earnings statements from tier-one lenders show mixed outcomes: some posted resilient profits supported by loan growth and higher yields on fixed-income instruments, while others saw profit margins contract due to narrower FX gains.
Industry watchers believe the shift could mark a turning point, with banks now needing to focus more heavily on risk management, cost efficiency, and innovation to sustain profitability in the absence of FX windfalls.
Financial experts also caution that credit quality could become a growing concern, as businesses and households grapple with inflationary pressures and tighter liquidity.
The Central Bank of Nigeria’s monetary tightening stance and ongoing reforms in the FX market are expected to shape the next phase of the industry’s earnings performance.
