As the extraordinary foreign exchange windfalls that Nigerian banks enjoyed after the 2023 FX market harmonisation continue to fade, analysts say lenders are now aggressively exploring new non-interest revenue streams. This shift is highlighted in Meristem Securities’ Banking Sector Highlights for November 2025, which outlines a more normalised earnings environment as the financial year draws to a close.
The FX harmonisation implemented early in President Bola Tinubu’s administration triggered a steep naira depreciation, resulting in massive FX revaluation gains for banks. However, the windfall was later tempered by the National Assembly’s introduction of a windfall tax through an amendment to the Finance Act 2023, leading to combined payments of about ₦205.59bn by six banks in the 2024 financial year. With FX gains now significantly reduced, analysts say banks must diversify to maintain revenue momentum.
Meristem projects that while gross earnings growth will moderate in 2025, interest income will remain the key driver, supported by a high interest-rate environment and the potential for balance sheet expansion. The widening of the asymmetric corridor to +50/-450 basis points lowers banks’ borrowing costs at the CBN, potentially enabling more credit extension. Still, experts note that banks are increasingly prioritising non-interest income sources such as fees, commissions, and digital-driven services to replace the fading FX-related gains.
Data from the first nine months of 2025 shows that nine financial institutions generated about ₦2.81tn from account maintenance fees, e-business charges, commissions, and related services representing a 24.10 per cent rise from the ₦2.27tn recorded over the same period in 2024. Yet, the impact of declining FX gains remains significant. Access Holdings, for instance, reported a 2.32 per cent year-on-year dip in non-interest revenue, largely due to a 53.43 per cent drop in FX revaluation gains. Strong growth in fees and other operating income helped cushion the decline.
Sterling Financial Holding Company recorded rising fees and commissions (+17.12 per cent YoY) and robust trading income (+78.19 per cent YoY), offsetting an FX revaluation loss of ₦1.88bn. United Bank for Africa similarly saw a steep fall in non-interest income, driven by an 83.34 per cent plunge in FX revaluation gains. Wema Bank also experienced a sharp drop, with FX revaluation gains falling by 70.21 per cent YoY, dragging down overall other income.
Meristem analysts also examined the Central Bank of Nigeria’s monetary policy stance, noting that holding the benchmark interest rate at 27 per cent and adjusting the asymmetric corridor has lowered the cost of borrowing from the CBN. While this supports liquidity and lending capacity, it is unlikely to translate into significantly cheaper credit for the real sector due to elevated loan pricing and the need to comply with the 50 per cent loan-to-deposit ratio. Nonetheless, many banks with high proportions of low-cost deposits such as Access Holdings, Stanbic IBTC, and Zenith Bank are better positioned to protect their margins.
The CBN has also announced that 16 banks have now met recapitalisation requirements, up from 14 in September.
At the 2025 Parthian Economic Discourse, economist Bismarck Rewane warned that traditional banks are losing bargaining power as fintech players such as OPay, Moniepoint, MTN MoMo, and others gain dominance. He argued that the sector is undergoing a major transformation, shifting from rent-seeking practices to efficiency-driven competition, with customers now more sophisticated and resistant to unjustified cost increases.
