Vetiva: Nigerian Banks Set to Stay Strong in H2 2025 — Despite Economic Challenges
Source: Vetiva H2 2025 Outlook
Analysts at Vetiva say Nigeria’s banking sector is showing signs of strength and resilience going into the second half of 2025 (H2 2025). This confidence is based on strong capital-raising strategies, better cost management, and rising interest income.
️ “Despite economic headwinds, banks are staying strong with improved efficiency and smart fundraising,” said Oluwayemisi Sunmola, Vetiva’s banking analyst.
Key Highlights for the Banking Sector:
✅ Interest income is expected to grow by 20% in 2025, thanks to higher loan pricing and juicy returns from government securities.
CBN’s high interest rate (MPR at 27.5%) is helping banks enjoy higher yields.
However, as inflation slows, interest rates may ease — which could soften income growth.
Banks with lots of low-cost deposits (like savings/current accounts) will likely continue to thrive.
One area of concern: Loan impairment charges may rise by 86% due to stricter regulations and reclassified loans. This could hurt profits for banks with old debt exposures.
Recapitalisation is underway — Some top banks like GTCO, Stanbic IBTC, and UBA are well-positioned to keep paying dividends, but others might struggle in the short term.
️ Oil & Gas: Opportunities & Pressures
⛽ The global energy market is shaky, and Nigeria’s oil production is still below OPEC quotas due to infrastructure issues.
️ While local oil players are gaining ground, results are still moderate for now.
Deregulation has created tough competition among fuel marketers — only the smartest will survive!
The Dangote Refinery is helping with local supply, but FX and sourcing issues remain.
Consumer Goods: Bouncing Back!
After a tough 2024, things are looking up! Companies are reporting over 60% revenue growth in Q1 2025.
Input costs are dropping, thanks to a stronger naira and more local sourcing.
️ As consumer spending picks up and festive demand rises, more growth is expected in the second half of the year.
Telecoms: Still on a Strong Signal
The sector is booming due to higher data demand and tariff hikes.
Contribution to GDP rose to 14.4% in Q4 2024, showing steady growth.
Smartphone adoption and broadband expansion are driving revenue.
FX risk management and tech upgrades like renewable energy are helping MTN, Airtel, and others stay profitable.
✅ Outlook: Solid growth ahead with better earnings visibility!
Final Take:
Vetiva’s report paints a cautiously optimistic picture of Nigeria’s key sectors in H2 2025. While risks remain, smart strategies, policy clarity, and market adaptability are helping businesses rebuild momentum.
Source: Vetiva H2 2025 Outlook
Analysts at Vetiva say Nigeria’s banking sector is showing signs of strength and resilience going into the second half of 2025 (H2 2025). This confidence is based on strong capital-raising strategies, better cost management, and rising interest income.
️ “Despite economic headwinds, banks are staying strong with improved efficiency and smart fundraising,” said Oluwayemisi Sunmola, Vetiva’s banking analyst.
Key Highlights for the Banking Sector:
✅ Interest income is expected to grow by 20% in 2025, thanks to higher loan pricing and juicy returns from government securities.
CBN’s high interest rate (MPR at 27.5%) is helping banks enjoy higher yields.
However, as inflation slows, interest rates may ease — which could soften income growth.
Banks with lots of low-cost deposits (like savings/current accounts) will likely continue to thrive.
One area of concern: Loan impairment charges may rise by 86% due to stricter regulations and reclassified loans. This could hurt profits for banks with old debt exposures.
Recapitalisation is underway — Some top banks like GTCO, Stanbic IBTC, and UBA are well-positioned to keep paying dividends, but others might struggle in the short term.
️ Oil & Gas: Opportunities & Pressures
⛽ The global energy market is shaky, and Nigeria’s oil production is still below OPEC quotas due to infrastructure issues.
️ While local oil players are gaining ground, results are still moderate for now.
Deregulation has created tough competition among fuel marketers — only the smartest will survive!
The Dangote Refinery is helping with local supply, but FX and sourcing issues remain.
Consumer Goods: Bouncing Back!
After a tough 2024, things are looking up! Companies are reporting over 60% revenue growth in Q1 2025.
Input costs are dropping, thanks to a stronger naira and more local sourcing.
️ As consumer spending picks up and festive demand rises, more growth is expected in the second half of the year.
Telecoms: Still on a Strong Signal
The sector is booming due to higher data demand and tariff hikes.
Contribution to GDP rose to 14.4% in Q4 2024, showing steady growth.
Smartphone adoption and broadband expansion are driving revenue.
FX risk management and tech upgrades like renewable energy are helping MTN, Airtel, and others stay profitable.
✅ Outlook: Solid growth ahead with better earnings visibility!
Final Take:
Vetiva’s report paints a cautiously optimistic picture of Nigeria’s key sectors in H2 2025. While risks remain, smart strategies, policy clarity, and market adaptability are helping businesses rebuild momentum.