A total of 20 big firms in Nigeria incurred an estimated N1.59 trillion on loan services, among others, in the third quarter (Q3) of 2025, signalling a high-interest-rate operating environment.

This is about an 18.9 per cent drop from the N1.96 trillion they incurred in the third quarter (Q3) of 2024.

Loan services, interest expenses on lease liabilities, interest on commercial papers, among others, are captured in the company’s finance costs.

However, the net foreign exchange gain in the period under review affected most companies’ finance costs, ultimately improving profit generation.

The affected companies are: MTN Nigeria Communications Plc, Dangote Cement Plc, Oando Plc, Nestlé Nigeria Plc, BUA Foods Plc, Nigerian Breweries Plc, International Breweries Plc, BUA Cement Plc, Conoil Plc and Aradel Holdings Plc.

Others are: Lafarge Africa Plc, Transcorp Hotels Plc, Presco Plc, Transnational Corporation Plc, Transcorp Power Plc, Geregu Power Plc, Cadbury Nigeria Plc, Dangote Sugar Refinery Plc, Seplat Energy and Totalenergies Marketing Nigeria Plc.

THISDAY learnt that the 20 companies in the third quarter (Q3) 2025 generated N5.2 trillion profit before tax, up from the N111.82 billion reported in Q3 2024.

Dangote Sugar Refinery Plc and Totalenergies Marketing Nigeria Plc were the only companies to declare losses in the period under review.

THISDAY analysed 20 companies across oil and gas, telecommunications, Fast-Moving Consumer Goods (FMCG), Cement manufacturing, Power generation, and Breweries, among others.

The results show that MTN Nigeria Communications Plc, Dangote Cement Plc, and Oando Plc were the three major firms with the highest financial costs.

MTN Nigeria posted N404.18 billion in finance costs in Q3 2025, about a 33.2 per cent increase from the N303.37 billion it posted in Q3 2024.

The N404.18 billion In finance costs in Q3 2025 by MTN Nigeria Communications contributed 25.8 per cent to the overall N1.66 trillion in finance costs in the period under review.

The telecommunication company noted that the 33.3 per cent increase in finance cost was mainly due to higher lease payments from the extended tower lease arrangements.

Despite the challenges, MTN Nigeria Communications reported the highest profit before tax, reporting N1.13 trillion in Q3 2025, up from a N713.63 billion loss before tax in Q3 2024.

In the period under review, Dangote Cement recorded N286.04 billion in finance costs, a 37 per cent drop from the N451.22 billion in the corresponding period of 2024, while Oando posted N288.8 billion in finance costs in Q3 2025, an 83 per cent increase from the N158.17 billion posted in Q3 2024.

Companies in Nigeria face high interest rates that continue to cut into profit and affect dividend payouts to shareholders.

THISDAY gathered that the average maximum lending rate in the banking sector closed September 2025 at 29.84 per cent, down from 30.21 per cent in September 2024.

This is according to the latest CBN’s “Money Market Indicators”.

The maximum lending rate is the average of the highest lending rates charged by deposit money banks in Nigeria. It is influenced by the CBN’s monetary policy adjustments aimed at controlling inflation and stabilising the local currency.

The Monetary Policy Committee (MPC) of the CBN in September 2025 cut the interest rate to 27 per cent following a downward movement in the inflation rate.

The inflation rate, according to the National Bureau of Statistics (NBS), had dropped to 18.02 per cent as of September 2025, from 24.48 per cent in January 2025. In December 2024, the maximum lending rate was 29.71 per cent, when the MPC voted to retain the MPR at 27.50 per cent.

The steep Increase in interest rates has sparked concerns about the potential impact on the cost of credit for businesses already facing economic hardships due to the Federal Government’s foreign exchange unification and fuel subsidy removal.

The CBN data showed that the average maximum lending rate rose to 29.79 per cent in January 2025 from 29.71 per cent in December 2024, when MPC members of the CBN voted to retain the MPR at 27.50 per cent.

Early in 2024, the CBN’s money market indicators showed an average maximum lending rate of 27.07 per cent in January 2024, when MPR was at 18.75 per cent, and 29.38 per cent in March 2024, when MPR was at 24.75 per cent.

When the MPR increased from 26.75 per cent in August 2024 to 27.25 per cent, the average maximum lending rate also rose from 29.93 per cent in August 2024 to 30.21 per cent in September 2024.

The banking sector lending rate in Nigeria averaged 14.17 per cent from 1961 until 2024, reaching an all-time high of 37.80 per cent in September of 1993 and a record low of six per cent in April of 1975.

In 2020, the average maximum lending rate reached a peak of 30.73 per cent when the MPR stood at 13.5 per cent. (THISDAY)