Nigeria's financial sector sees major growth as smaller banks reportedly begin merger talk

• Despite challenging economical conditions, the Financial and Professional Services sector, including banking, insurance, superior markets, and fintech, showed beardown show successful 2024
• The banking assemblage grew by 30.9%, security premiums increased, and fintech saw grounds integer payments, positioning Nigeria arsenic a person successful tech concern connected the continent
• However, challenges specified arsenic debased security p*netration, constricted fintech infrastructure successful agrarian areas, and endowment drain persist, requiring attraction for sustained growth

Legit.ng writer Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

Despite challenging economical conditions, Nigeria's Financial and Professional Services (FPS) assemblage performed good successful 2024, with Deposit Money Banks (DMBs) expanding their assets to N170.02 trillion, oregon astir 63.1% of the nation's full GDP.

Nigeria's Financial and Professional Services assemblage performed good successful 2024. Photo Credit: FG, Contributor
Source: Getty Images

According to the State of Enterprise (SOE) 2025 report, the FPS assemblage continues to beryllium a cardinal pillar of inclusive development, nationalist income generation, and nationalist economical recovery, contributing 5.8% of GDP.

Notwithstanding the difficulties brought connected by the depreciation of the naira, inflationary pressures, and overseas speech volatility, banks, security businesses, superior markets, and fintech enterprises proved to beryllium robust, maintaining capitalist assurance and concern operations each twelvemonth long. Just the banking sector grew 30.9 percent twelvemonth implicit twelvemonth to N4.58 trillion.

According to the research, banking and security companies are present the largest donors to firm income tax, surpassing the manufacturing sector. As of Q3 2024, they remitted N570.91 billion, which is expected to summation to N825.92 cardinal by the extremity of the year.

Additionally, their value-added taxation (VAT) publication accrued to N223.69 cardinal and is predicted to scope N409.98 billion.

The Sun reported that banks utilized currency depreciation to summation gross and gully successful investment, portion manufacturers battled with precocious input costs and FX-related losses. It is anticipated that this inclination volition continue, peculiarly if the projected windfall taxation connected profit-driven fiscal institutions is implemented.

With gross premiums written rising to N1.17 trillion by Q3 and expected to scope N1.47 trillion by year-end, the security subsector besides reported beardown performance. The sector's plus worth accrued 45% to N3.88 trillion, portion gross claims accrued to N696.9 billion, a 29.9% emergence implicit 2023.

The NGX Insurance Index had a 123.2% summation arsenic a effect of investors' favorable absorption to the industry. The anticipated support of the Insurance Industry Reform Bill, which aims to amended governance and digitisation, further boosts marketplace confidence.

Capital market

The superior markets' upward inclination persisted. By Q1 2025, the NGX All Share Index had climbed by 37.65% to 102,926.40 points and past again to 105,660.64 points. Trading volumes reached N5.59 trillion, and marketplace capitalisation surged to N66.26 trillion, a 53.4% rise.

By year-end, overseas superior inflows had accrued from $3.91 cardinal successful 2023 to $9.64 billion, the astir since 2020, with banks' recapitalisation accounting for a important magnitude of the transactions.

With N1.08 quadrillion successful integer payments made successful 2024—an 80% summation implicit N600 trillion the twelvemonth before—the fintech manufacture had 1 of its champion years to date. While POS usage accrued to 1.5 billion, mobile wealth transactions accrued by 30% to 3.9 billion.

Nigeria led the continent successful garnering $331.64 cardinal successful tech capital, oregon astir 30% of Africa's total, with a ample information of that wealth going toward fintechs, contempt a 53.5% diminution successful full African tech funding.

The study claims that Nigeria's outgo infrastructure is presently among the champion successful the satellite and the astir developed successful Africa. The federation trailed lone China, South Korea, Thailand, Brazil, and India with 7.9 cardinal real-time transactions.

Nigeria led the continent successful garnering $331.64 cardinal successful tech capital, oregon astir 30 percent of Africa's total. Photo Credit: Contributor
Source: Getty Images

The study highlighted persistent challenges, including arsenic debased security p*netration, superior marketplace liquidity limits, insufficient fintech infrastructure successful agrarian areas, and anemic pension uptake successful the informal sector, contempt the FPS sector's singular success. Additionally, it noted that issues requiring contiguous improvements included endowment drain and a deficiency of investments related to sustainability.

Stakeholders asseverate that the manufacture is inactive indispensable to Nigeria's economical prospects. “The sector’s show underscores its capableness to thrust sustainable growth, unlock capital, and amended livelihoods,” the study stated.

Smaller banks reportedly statesman talks

Legit.ng reported that the Central Bank of Nigeria's (CBN) recapitalisation people is acceptable to significantly reshape the country's banking landscape, peculiarly impacting smaller banks.

The deadline for gathering the caller superior requirements is March 31, 2026.

According to reports, 2 Nigerian banks, 1 with a determination licence and different with a nationalist licence, person started merger talks, which whitethorn beryllium finalised successful the coming months.

PAY ATTENTION: Сheck retired quality that is picked exactly for YOU ➡️ find the “Recommended for you” artifact connected the location leafage and enjoy!

Source: Legit.ng