The Central Bank of Nigeria (CBN) has reported a remarkable increase in its profit after tax for the year ended December 2022, marking a substantial growth from the previous year. This surge in profitability, despite challenging economic conditions and various financial activities, has been attributed to several key factors that have contributed to the bank’s financial success.

This was revealed after the apex bank released its long-awaited audited accounts for the year ended December 2022 showing it made a profit after tax of N103.8 billion, an increase from the N75.1 billion declared a year earlier.

The report’s results, which were signed by Godwin Emefiele and audited by EY and KPMG, also included audited results for 2016, 2017, 2018, 2019, 2020, and 2021, which were published on the apex bank’s website.

The apex bank’s results show it reported a profit after tax every year for the last 8 years, despite facing currency depreciations and doling out intervention funds, and loans to the government amongst other development finance activities.One of the primary drivers of the CBN’s profit surge has been its effective income generation strategies. The bank’s audited accounts reveal that it successfully leveraged a combination of higher interest income, fees, and commissions.

Notably, the apex bank achieved an impressive 80% surge in net interest income, reaching N1.8 trillion, up from N1 trillion in the preceding year. This increase can be attributed to the strategic management of its loan portfolio and other interest-bearing assets.A major highlight of the CBN’s income generation was its involvement in the controversial “Ways and Means” provision. This provision involved extending loans and overdrafts to the federal government, resulting in substantial interest income.

Critics have questioned the size of these loans and their compliance with the central bank act which mandates maximum lending of 5% of the previous year’s government revenues. Despite that, the N23 trillion loans generated N1.9 trillion in interest income, significantly surpassing the previous year’s N1.2 trillion.

According to the audited accounts of the apex bank, the Ways and Means provision is priced at a whopping MPR+3%. “Included in interest income on Loans and receivables is interest income on Overdraft facility granted to the Federal Government amounting to N1.9 trillion (2021: N1.2 trillion). The interest rate applied on this facility is MPR+3%.” the CBN says.