Nigeria’s banking sector posted significant growth in 2024, with total assets surging to N170.02 trillion, marking a 39.6% year-on-year increase from N121.8 trillion in 2023.
This is according to the State of Enterprise (SOE) Report 2025, which analyzed key economic and financial indicators across sectors.
The report highlights the sector’s resilience in the face of a challenging economic climate marked by high inflation and a sharp devaluation of the naira.
Since 2023, the local currency has weakened substantially, depreciating from N450 to N1,600 per US dollar, following the foreign exchange unification policy introduced by President Bola Tinubu in May 2023.
The policy effectively ended Nigeria’s multiple exchange rate system, previously maintained under former President Muhammadu Buhari and the Central Bank of Nigeria (CBN).
Financial Sector’s Rising Economic Influence
According to the report, the financial services sector’s contribution to national output increased, with financial institutions generating N6 out of every N100 of Nigeria’s GDP in 2024, an uptick from N5 per N100 the previous year. This underlines the sector’s growing structural relevance and its expanding footprint in the broader economy.
In terms of market activity, remittance inflows through banking channels saw a slight uptick from $19.55 billion in 2023 to $19.8 billion in 2024, as members of the Nigerian diaspora continued to support relatives and local businesses through formal money transfer services.
The rise of digital financial services was even more pronounced. Point-of-Sale (POS) transactions reached N18.15 trillion in 2024, up 69.6% from N10.7 trillion the previous year, signaling a consumer shift away from traditional banking halls and toward more accessible and tech-driven payment solutions.
Additionally, electronic payment transactions, including mobile banking and online transfers, climbed dramatically from N600 trillion in 2023 to N1.078 quadrillion in 2024, reflecting deepening digital adoption and financial inclusion.
Sector Outlook and Risk Considerations
According to the report, “Between 2015 and 2024, the value of banking sector assets recorded a compound annual growth rate (CAGR) of 22.1%. While this growth reflects deepening financial intermediation, part of the nominal expansion was influenced by currency depreciation against the US dollar during the period.”
Despite 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 importance in driving economic activity.
What You Should Know
Looking ahead to 2025, the report identifies loan portfolio expansion, fixed-income investment gains, and digital innovation as key growth drivers for Nigerian banks, particularly efforts to boost non-interest income streams.
- However, the report also flags emerging risks. Chief among them is credit exposure to the oil and gas sector, which increases banks’ vulnerability to fluctuations in global oil prices and foreign exchange volatility.
On a more optimistic note, impairment charges, the costs banks incur to account for potential loan losses, are expected to decline, suggesting a gradual improvement in macroeconomic stability and credit quality.
