Quick Summary:
- Five Nigerian banks earned a combined N1.695 trillion pre-tax profit from foreign subsidiaries in 2024, representing 33.5% of total group profits.
- Macroeconomic factors like higher interest rates and Naira devaluation boosted overall earnings, with gross earnings up 82% year-on-year.
- UBA led foreign subsidiary profits with N556 billion, followed by Access Holdings (N460 billion), GTCO (N273 billion), First Holdco (N219 billion), and Zenith Bank (N187 billion).
- Offshore operations are becoming vital revenue sources, diversifying income and enhancing resilience amid domestic economic volatility.
In 2024, five major Nigerian banks generated a combined N1.695 trillion in pre-tax profit from their foreign subsidiaries. This accounted for 33.5% of their total group profit of N5.060 trillion.
Despite this strong contribution from abroad, operations in Nigeria still make up the bulk of their earnings.
Strong Growth Driven by Macroeconomic Factors
The banks’ overall strong performance in 2024 was supported by policy changes such as higher interest rates and the devaluation of the Naira. These factors boosted foreign exchange gains and increased interest income from loans, advances, and investments in Treasury Bills and bonds.
For example, the group of banks known as the FUGAZ banks — First Holdco, UBA, GTCO, Access Holdings, and Zenith Bank — saw gross earnings jump 82% year-on-year (YoY). Earnings rose from N9.55 trillion in 2023 to N17.397 trillion in 2024.
This growth led to a 56% rise in pre-tax profit, reaching N5.060 trillion.
Profit Breakdown by Bank
Here’s how the foreign subsidiaries performed in 2024 based on audited financial reports:
Zenith Bank Plc – N187 Billion
Zenith Bank earned N187 billion from its four foreign subsidiaries in Ghana, Sierra Leone, Gambia, and the UK. This was about 14% of Zenith’s total pre-tax profit of N1.327 trillion, slightly down from 16.5% in 2023.
Zenith Bank UK led with N84.1 billion (up 71% YoY), followed closely by Zenith Bank Ghana with N82 billion. However, Zenith’s Nigerian operations remained dominant, contributing over 84% (N1.133 trillion) of the group’s profit.
First Holdco Plc – N219 Billion
First Holdco Plc, parent of First Bank of Nigeria, has six subsidiaries across Africa and one in the UK, plus representative offices in China and France.
In 2024, its foreign subsidiaries contributed N219 billion, or 27.5% of the group’s total pre-tax profit of N796.47 billion. This highlights the growing impact of its international operations.
GTCO Plc – N273 Billion
GTCO’s foreign subsidiaries made N273 billion in pre-tax profit, a 109% increase from N130.66 billion in 2023. Offshore operations accounted for 21.57% of the group’s profit, nearly unchanged from 2023.
The group operates in eight countries including Ghana, Kenya, Tanzania, and the UK. GT Bank Ghana led with N118.96 billion, an 81% increase YoY.
Despite losses from GT Bank Tanzania, all other subsidiaries were profitable.
GTCO Nigeria still dominated with N1.003 trillion out of the total N1.266 trillion pre-tax profit.
Access Holding Plc – N460 Billion
Access Holdings’ 15 foreign subsidiaries generated N459.99 billion in pre-tax profit, a 131% YoY increase.
This accounted for 53% of the group’s adjusted pre-tax profit of N867.02 billion, up from 27.32% in 2023.
Access Bank UK was the standout with N259.1 billion in profit. However, the group also recorded losses in South Africa, Mozambique, and Kenya.
Foreign operations contributed N1.1 trillion to gross earnings of N4.878 trillion, showing Access’s growing global presence.
UBA Plc – N556 Billion
UBA led the pack with N556.36 billion in pre-tax profit from foreign subsidiaries in 20 African countries and the UK.
This was 69.22% of the group’s adjusted pre-tax profit of N803.73 billion, up sharply from 29.69% in 2023.
Foreign subsidiaries outperformed the domestic arm, which earned N486.53 billion.
Top contributors included UBA Cameroon (N96.63 billion) and UBA Côte d’Ivoire (N57.24 billion). Only UBA Kenya and Tanzania posted losses.
Impairment losses dropped 64% YoY to N53 billion, with UBA Ghana having the highest impairment.
Operating revenue from foreign subsidiaries doubled to N1.577 trillion.
Insight: Growing Importance of Foreign Subsidiaries
The rising profits from foreign subsidiaries show that Nigerian banks’ regional expansion is paying off. These offshore operations diversify revenue and protect banks from domestic economic fluctuations.
Going forward, continued investments abroad could boost resilience and position Nigerian banks as strong pan-African players.
However, managing risks and navigating foreign regulations will be key to sustaining this growth.
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