How do banks in Nigeria make money?

2 min readNov 15, 2019


Ever wondered how banks declare billions and billions of Naira in profit? Let’s walk you through. We will be using Zenith Bank’s financial statements for the third quarter ended September 30, 2019.

Interest income

The biggest source of income for most banks is interest income. Interest income comprises interest earned on loans granted as well as interest earned on securities such as treasury bills.

For the period under review, Zenith Bank made a total of N321 billion as interest income. Go a bit further and you will find that N175 billion or 54.5% comprised loans and advances to customers. 38.3% or N123 billion was made up of interest earned from treasury bills and bonds.

Subtract interest expenses of N107 billion and impairment charges of N18.2 billion.

Net interest income amounts to N196 billion.

Fees and commission

Another key income driver is fees and commission. Zenith Made a total of N86.2 billion as fees and commission income. The biggest sub heads here were fees on electronic products which amounted to N35.3 billion, current account maintenance fees of N15.3 billion as well as credit related fees of N14.2 billion.

Fees and commission expense amounted to N12.5 billion.

So net fees and commission income was N73.8 billion.

Trading income

Trading income is another key earner for banks. This comprises trading of treasury bills, bonds as well as derivatives.

Zenith made a total of N66.4 billion as net trading income between January and September, 2019.

What of expenses?

It would be odd if we didn’t look at the other side of the equation.

The biggest expenses for the bank were operating expenses of N102.6 billion as well as personnel expenses of N57 billion. Add them up and you get N157 billion.


I have left a few items on both income and expense lines.

Do the maths however, and you can easily see how Zenith made a profit after tax of N150 billion between January and September.




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