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Bank-Backed Fintechs Achieve New Heights in Profitability and Efficiency
Guaranty Trust Holding Company Plc’s HabariPay continues to exemplify exceptional cost management, operating at just 30.69% of its revenue. This efficiency starkly contrasts with its peers, Hydrogen (Access Holdings) and Zest (Stanbic IBTC), which operated at 78.66% and 78.23% of their incomes respectively during the first three quarters of 2025.
Record-Breaking Combined Profits Signal Fintech Maturity
Collectively, these bank-affiliated fintechs generated a remarkable ₦7.91 billion (approximately $5.43 million) in profits over the nine-month period, marking their most robust financial performance since banks ventured into the fintech arena. This milestone reflects a growing sophistication among these subsidiaries, which have historically been criticized for lagging behind nimble independent players like OPay, PalmPay, and Moniepoint in speed and reliability.
The surge in profitability is attributed to enhanced operational efficiency, increased transaction volumes and values, and broader adoption by merchants, corporate clients, and everyday consumers who are gravitating towards bank-backed digital payment solutions. Notably, this period marks the first instance where all three fintech arms reported profits simultaneously, with Zest achieving profitability for the first time in Q3 2025.
Closing the Gap with Independent Fintech Leaders
For years, fintech startups such as OPay and PalmPay dominated the market by offering rapid, low-cost, and dependable payment services, while traditional banks struggled to keep pace. However, leveraging their extensive customer bases, established settlement infrastructures, and ongoing technological enhancements, bank-owned fintechs are steadily narrowing this competitive divide.
Profitability and Cost Efficiency Among Bank-Led Fintechs
Examining net profits and operational costs for the first nine months of 2025:
- Hydrogen (Access Holdings): ₦0.83 billion
- Zest (Stanbic IBTC): ₦0.54 billion
- HabariPay (GTCO): Dominates with 82% of total profits
Source: 9M 2025 Company Financial Statements | TECHCABAL
Hydrogen’s Profit Decline Amidst Transaction Growth
Hydrogen recorded a profit of ₦833 million ($571,833), representing a 42.63% decrease compared to the previous year. Despite a modest 0.95% increase in operating income to ₦5.74 billion ($3.94 million), operating expenses rose by 6.64% to ₦4.52 billion ($3.10 million), impacting overall profitability.
Since its inception in September 2022 as a backend payments and infrastructure provider for fintechs, banks, and telecom companies, Hydrogen has steadily expanded its transaction processing capabilities. Transaction values surged by 127.93% to ₦60.4 trillion ($41.46 billion) as of September 2025, fueled by the 2024 launch of the Hydrogen Payment Gateway-a versatile solution enabling businesses to accept diverse online payment methods. Enhancements in switching, merchant collections, and card security have further bolstered its market presence.
According to its September 2025 investor presentation, Hydrogen now commands a 14% market share in switching services, with over 20,000 merchants relying on its platform.
Zest Achieves Breakthrough Profitability
Stanbic IBTC’s Zest fintech posted its inaugural profit of ₦543 million ($372,755) in Q3 2025, a significant turnaround from a ₦1.89 billion ($1.29 million) loss in the same quarter the previous year. Operating expenses increased by 6.53% to ₦2.12 billion ($1.46 million), reflecting ongoing investments in growth.
In the first half of 2025, Zest narrowed its losses to ₦389 million ($267,038) from ₦945 million ($648,718) a year earlier, while revenue skyrocketed fourteenfold to ₦874 million ($599,978). Despite this progress, Zest’s cost structure remains an area for improvement as it seeks sustainable profitability.
HabariPay’s Profit Surges Amid Expanding Payment Ecosystem
HabariPay’s net profit more than doubled, rising 115.51% to ₦6.54 billion ($4.49 million), driven by a 112.68% increase in operating income to ₦9.43 billion ($6.47 million). Although operating expenses climbed 171.61% to ₦2.89 billion ($1.98 million), HabariPay remains Nigeria’s most lucrative bank-backed fintech.
The fintech’s growth is largely powered by its Squad platform, which facilitates payments through virtual accounts, USSD, cards, and bank transfers, while generating additional revenue from switching and bill payment services.
Evolution of Bank-Owned Fintechs in Nigeria
The Central Bank of Nigeria’s 2010 directive encouraging banks to adopt holding company structures paved the way for the creation of non-banking subsidiaries specializing in payments, asset management, and pensions.
GTCO launched HabariPay in June 2022, targeting SMEs and retailers with a suite of services including PoS, USSD, web gateways, virtual accounts, and switching via Squad. Access Holdings followed with Hydrogen in September 2022, focusing on infrastructure, switching, and collections. Stanbic IBTC introduced Zest in October 2023, offering a unified dashboard integrating cards, bank transfers, mobile money, and QR code payments.
Strategic Outlook and Expansion Plans
Bank-backed fintechs are capitalizing on their parent companies’ extensive user networks, a critical advantage as digital payment adoption accelerates across Africa.
Segun Agbaje, GTCO’s Group CEO, emphasized in the 2025 interim report that their payments subsidiary remains a key growth driver, with transaction volumes and values rising sharply due to increased merchant, corporate, and retail engagement.
GTCO is enhancing HabariPay’s ecosystem through strategic alliances and advanced technology integration, improving API connectivity, in-app payments, and cross-platform interoperability. These efforts position Squad as a trusted payment processor and a central pillar for digital commerce.
“Our vision is to facilitate seamless, intuitive, and inclusive financial interactions between consumers and businesses across sectors,” Agbaje stated.
Access Bank is preparing Hydrogen for expansion beyond Nigeria, with CEO Roosevelt Ogbonna declaring pan-African ambitions during an investor briefing in April 2025.
Stanbic IBTC is significantly increasing investment in Zest, with funding up by at least 85.8% since December 2024. This capital infusion supports infrastructure upgrades and network growth, aiming to establish Zest as the preferred payments partner for businesses through its integrated dashboard.
Challenges Ahead: Building Brand Recognition and Consumer Trust
Despite their financial breakthroughs, bank-backed fintechs still trail independent players like OPay, PalmPay, and Moniepoint in terms of brand visibility and consumer loyalty. While profitability is a major milestone, the next hurdle is to emerge from the shadows of their parent banks and establish themselves as standalone, consumer-centric brands.
Note: Exchange rate used for conversions: ₦1,456.72 = $1
