Ten commercial banks listed on the Nigerian Exchange (NGX) recorded a combined N3.77 trillion in loan impairment charges from 2023 through Q1 2025, driven largely by the naira’s sharp devaluation, soaring inflation, and rising interest rates.
Loan loss provisions totaled N1.34 trillion in 2023, jumped to N2.13 trillion in 2024, and hit N297.1 billion in just the first quarter of 2025. These macroeconomic pressures have squeezed corporate profits, eroded household purchasing power, and raised debt servicing costs.
Despite these challenges, several banks are showing resilience in managing credit risks, with key indicators reflecting stability or even improvement.
Fidelity Bank noted the economic strain in its 2024 results but highlighted operational gains. CEO Nneka Onyeali-Ikpe reported:
“Net Interest Margin rose to 12.0% from 8.1% amid a high-yield environment. Our funding cost remained stable at 5.2%. Notably, our NPL ratio improved to 3.0% from 3.5%, and cost of risk dropped to 1.5% from 2.6%, reflecting strong risk management.”
Access Holdings echoed similar sentiments, stating:
“Asset quality remains stable, with a slight improvement in the NPL ratio to 2.76% (Dec ’23: 2.78%). We aim to keep NPLs below 5% in 2025, supported by proactive risk oversight.”
Zenith Bank also emphasized its credit strength:
“We maintain a robust portfolio, with 96% of loans in Stage 1 and 2. Our NPL ratio rose modestly to 4.7% in 2024 from 4.4% in 2023. Oil and gas exposure stood at 30.5%, and general commerce at 26.6%, indicating a diversified loan book.”
While impairments remain elevated, these figures reflect both the scale of Nigeria’s economic challenges and the ongoing efforts by top banks to navigate uncertainty with disciplined risk frameworks.
