Every earnings season in Nigeria, the same movie plays. Banks announce record profits. Headlines scream success. Press releases glow with optimism. Then you actually read the financial statements.
What you find there tells a completely different story.
I analyzed the 2025 half-year results from 10 major Nigerian banks: Zenith, GTCO, UBA, First HoldCo, Access Holdings, Stanbic IBTC, Wema, FCMB Group, Sterling HoldCo, and Jaiz. The pattern is unmistakable. These institutions are using accounting gymnastics to hide losses, inflate gains, and paint a rosy picture that doesn’t exist.
The Numbers Don’t Add Up
Take Zenith Bank. They reported N625.6 billion in pre-tax profit. Sounds great. But their trading gains dropped by N328 billion, and credit impairments jumped 83 percent. Where exactly is the strength here?
GTCO claimed the throne with N900.8 billion in pre-tax earnings. Strip out last year’s N523 billion one-off fair-value gain, and their actual profit fell 26 percent. They’re not growing. They’re shrinking behind a wall of revaluations.
UBA’s interest expenses exploded from N328.9 billion to N560.6 billion. Their trading desk went from a N98 billion gain to a N10 billion loss. Result? They slashed their interim dividend. But the headline still said record profit.
First Bank HoldCo saw revenues rise, yet pre-tax profit fell. Why? Trading income collapsed by N486 billion, swinging from a N432 billion gain in 2024 to a N53.7 billion loss in 2025. Impairments doubled to N185 billion when they finally stopped using CBN forbearance to hide bad loans.
Access Holdings reported N2.5 trillion in gross earnings. Impressive, right? Look at their comprehensive income statement. Shareholders lost N62.4 billion, driven by N155.9 billion in forex translation losses and N74.4 billion in fair-value write-downs. Profit at the top line, destruction at the bottom.
The Smaller Players Aren’t Better
Stanbic IBTC’s growth came mostly from asset sales, not real business performance. Wema Bank celebrated a 229 percent profit surge while interest expenses rose 34 percent and impairment charges stayed suspiciously light at just N532 million. That math doesn’t work.
FCMB Group saw non-interest income crash 35 percent after losing revaluation gains. When regulatory leniency expired, a N36.2 billion impairment suddenly appeared.
Sterling HoldCo announced a 157 percent profit jump. Context matters: they just raised N100 billion in capital and still need N53 billion more to meet requirements. Their cost-to-income ratio sits at 64.5 percent, and non-performing loans exceed the 5 percent prudential limit.
Jaiz Bank reported N14.45 billion in profit while total assets shrank by N100 billion. Operational cash flow swung from a N428 billion inflow to a N119 billion outflow. That’s not profit. That’s accounting fiction.
How They’re Doing It
Banking insiders will tell you off the record that “results management” is standard practice now. The playbook is simple:
Loss-making subsidiaries get merged into group accounts where their damage gets diluted. Bad loans become “restructured assets” or disappear into special-purpose vehicles off the balance sheet. Fair-value revaluations boost income when markets rise, then translation losses get buried in footnotes when currencies move the other way.
Interest income looks impressive in a high-rate environment until you realize the cost of risk is exploding. Dividends signal confidence even when retained earnings are flat. Capital raises get sold as expansion when they’re actually emergency solvency measures.
Nobody discusses what happens when interest rates normalize. Nobody mentions declining cash generation. The focus is always on the number that makes the best headline.
Where Is the Central Bank?
The CBN shares blame here. Its supervision has become more reactive than proactive. It will sanction a bank for customer service failures but stays quiet on hidden FX exposures, aggressive revaluations, and creative loss concealment.
Regulatory forbearance has allowed banks to delay recognizing bad loans for years. When those impairments finally hit the books, they’re called “non-recurring” as if the underlying risk was never real.
Transparency isn’t a threat to financial stability. It’s the foundation of it. A banking system that hides weakness under glossy presentations is built on sand.
The Real Crisis Isn’t Liquidity. It’s Credibility.
When numbers get manipulated, when press releases are designed to deceive, and when regulators look the other way, trust erodes. Depositors stop believing in transparency. Investors stop trusting the data. Even genuine success gets viewed with suspicion.
The industry has confused perception with progress for too long. Banks need to stop treating financial reporting like a marketing exercise.
What Needs to Change
The CBN must demand full disclosure. That means:
- Clear reporting on FX positions and loan restructuring
- Core operating profit separated from one-off gains and trading income
- Cash flow data presented upfront, not buried in notes
- Detailed impairment breakdowns by sector and vintage
- Transparent explanations of capital raises
- Dividends aligned with free cash flow, not cosmetic profits
Auditors need to rediscover their professional conscience. Journalists and analysts need to dig into the notes, not just copy press releases. Ask why interest income is rising while impairments and NPLs are climbing too.
The health of Nigeria’s financial system doesn’t depend on who publishes the biggest profit number. It depends on who can prove that profit is real, repeatable, and resilient.
Read Every Headline With Skepticism
Until the industry embraces real transparency, treat every “record result” announcement with doubt. What the headlines celebrate, the balance sheets often contradict.
Today’s reported profits could easily become tomorrow’s revealed losses. A bank’s greatest asset isn’t capital. It’s credibility. Once you lose that, no amount of creative accounting can bring it back.
Udunze is a journalist and PR professional based in Lagos. Reach him at [email protected]