Tier-1 Nigerian Banks Surge to N114 Trillion Deposits as Lending Slows Amid Tight Monetary Policy
Nigeria’s biggest banks ended 2025 with a powerful surge in customer deposits, even as lending activity slowed under tight monetary conditions. Fresh audited financial statements show that First HoldCo, Guaranty Trust Holding Company (GTCO), Zenith Bank, United Bank for Africa (UBA), and Access Holdings collectively grew deposits to N114 trillion, up from N93 trillion in 2024.
The 23 percent jump highlights strong liquidity in the financial system, driven by sustained customer confidence and a high-interest-rate environment shaped by the Central Bank of Nigeria (CBN). While the CBN maintained a restrictive monetary stance for most of the year to tame inflation and stabilise the naira, recent policy adjustments—including a 50 basis point cut in the Monetary Policy Rate to 26.5 percent and a reduction in the Cash Reserve Ratio—signalled early easing.
Among the banks, Access Holdings led deposit growth, rising sharply to N34.5 trillion from N22.5 trillion, while UBA, Zenith Bank, First HoldCo, and GTCO also recorded steady increases. However, this liquidity boom did not translate into equally strong lending expansion, as credit growth remained more cautious across the industry.
Although total banking system credit rose year-on-year, loan growth lagged behind deposits, reflecting stricter risk management and weaker borrowing appetite amid high interest rates. Loan-to-deposit ratios declined across all tier-1 lenders, with GTCO recording the lowest at 25 percent, showing that banks are holding more liquidity rather than aggressively expanding credit.
Looking ahead, analysts expect a shift in 2026 as recapitalised banks, which collectively raised over N4.65 trillion, begin to deploy stronger balance sheets into lending. Fitch Ratings projects loan growth could exceed 20 percent as capital strength improves. For now, however, Nigeria’s banking sector remains in a phase defined by strong deposits, cautious lending, and earnings boosted by high interest income from government securities and other fixed-income assets.
source: Business day