Banking
Why Nigerian Banks Now Prefer Local Bond Issuance to Eurobonds—Fitch
By Dipo Olowookere
Global rating company, Fitch, has shed light on why banks in Nigeria are now embracing Naira-denominated bonds instead of international bond known as Eurobond.
In a report released few days ago, Fitch attributed the new craze for the local bonds by the lenders to the desire to build capital buffers.
Nigeria is moving towards Basel III, which may get under way this year and is likely to weigh on banks’ regulatory capital ratios.
“We expect banks to bolster their capital by issuing subordinated debt eligible as Tier 2 capital rather than by raising equity. Raising equity could be difficult given the equity market decline in the past year,” the report said.
Banks’ local currency issuance in 2014-2015 was mostly subordinated debt, driven by the need to rebuild regulatory capital positions that had been weakened by deteriorating asset quality.
Issuance plummeted in 2016-2017 following the oil price crash, which led to economic deterioration, weaker credit demand and rapidly worsening asset quality, particularly for oil-related loans.
However, in 2018, issuance recovered when operating conditions started to improve and four banks tapped the market to bolster capital ratios or fund growth, with local currency bonds totalling N233 billion ($640 million) at end-January 2019.
Another reason by Fitch for the new preference for local local-currency issuance is that it diversifies banks’ funding and reduces their foreign-exchange risk.
Though it said the raising of local bonds was credit positive, it stressed that most ratings remain constrained by Nigeria’s operating environment and ‘B+’ sovereign rating.
“The increase in local currency issuance reflects banks’ reduced appetite for foreign-currency lending, their desire to diversify funding given the high cash reserve requirements (CRR) on local currency customer deposits and their need to issue capital securities to meet forthcoming Basel III capital requirements. Investor demand for local currency bonds is mainly domestic, but higher real yields and greater exchange-rate stability could attract foreign interest.
“Banks are increasingly shifting focus to local currency lending given the challenges in foreign currency lending, particularly to the troubled oil sector.
“They are likely to grant more lending to existing local currency borrowers that benefit from the economic recovery, and target new sectors that have been underbanked, particularly retail and SMEs,” the statement said.
It added that, “Nigerian banks are predominantly funded by customer deposits (77% in LC and 23% in FC at end-1H18).
“There are drawbacks to this, as foreign currency deposits can be volatile, exposing banks to significant liquidity risks, and local currency deposits are subject to a punitive CRR of 22.5%, one of the highest in the region.
“The CRR forces banks to park significant reserves at the central bank. These reserves are unremunerated, and the central bank does not return excess reserves immediately. The CRR significantly constrains banks’ ability to fund local currency loan growth with LC deposits, and is a major incentive for them to diversify their funding.”
By Modupe Gbadeyanka
The six edition of the Hackaholics of Wema Bank Plc has produced 20 top finalists shared equally between two streams, Ideathon and Hackathon.
The Hackathon finalists are Rapid DEV, Secure IT, Neurafeed, Trust Lock Babcock, Pulse Track, IlluminiTrust, Trust Lock FUTA, Fix Fraud AI, KASH Flow and VOC AI.
The Ideathon finalists include PLOY, Fertitude, VarsityScape, Mama ALERT, StockMed, Chao, All Arbitrate, FarmSlate, Sane AI and Cycle X.
They emerged after a two-day pre-pitch held on December 16 and 17, 2025, for the grand finale slated for Friday, December 19, 2025.
They grand finale of Hackaholics 6.0 will convene the top players in Africa’s tech and innovation ecosystem, creating an avenue for these finalists to not only put their creativity to the ultimate test but also give their solutions visibility to potential investors for additional funding opportunities beyond the prizes to be won.
The prizes to be won for the Ideathon include N25 million for the winner, N20 million for the first runner-up, N15 million for the second runner-up and N5 million each for two women-led teams.
In the Hackathon category, the first to fourth-place winners will receive N20 million, N15 million, N10 million and N5 million, respectively.
The pre-pitch saw the top 43 contenders battle in a game of innovation and problem solving, presenting compelling pitches for a chance to make it to top 10 in their respective streams.
After a rigorous stretch of pitches and presentations, the top 20 emerged, securing their spot in the grand finale of Hackaholics 6.0.
“Hackaholics started off as a hackathon and morphed into an ideation. For Hackaholics 6.0, the sixth edition, we decided to give both the builders of new solutions and the refiners of existing ones, an opportunity to make meaningful impact.
“For us at Wema Bank, we understand that innovation isn’t just building from scratch. Sometimes, it’s looking at what exists and developing new ways to optimise that and create more efficiency. This is the idea behind our two-stream Ideathon-Hackathon structure.
“Every year, Hackaholics shows us just how eager and motivated Nigerian youth are when it comes to exploring creativity and innovation, and we are honoured to be the institution that provides them with the platform and resources to put this drive to good use.
“We toured seven cities, indulged 1,460 participants and discovered hundreds of remarkable ideas; some of which needed some refining and some of which deserved to move to the next stage.
“For those who needed to go back to the drawing board, we provided useful guidance and for the top contenders, we were able to shortlist to the top 43, who proceeded to the pre-pitch. To every participant, Wema Bank is proud of you. This is just the beginning,” the chief executive of Wema Bank, Mr Moruf Oseni, said.
By Adedapo Adesanya
The Nigeria Customs Service (NCS) says it will enforce penalties against designated banks that delay the remittance of customs revenue, in a move aimed at strengthening transparency and safeguarding government earnings.
This was disclosed in a statement on the NCS official account on X, formerly known as Twitter and signed by its spokesman, Mr Abdullahi Maiwada, who said the delays undermine the efficiency, transparency, and integrity of government revenue administration.
“The Nigeria Customs Service has noted instances of delayed remittance of customs revenue by some designated banks following reconciliation of collections processed through the B’odogwu platform,” the statement read.
“Such delays constitute a breach of remittance obligations and negatively impact the efficiency, transparency, and integrity of government revenue administration.
“In line with the provisions of the Service Level Agreement executed between the Nigeria Customs Service and designated banks, the Service hereby notifies stakeholders of the commencement of enforcement actions against banks found to be in default of agreed remittance timelines.”
Mr Maiwada disclosed that any bank that fails to remit collected Customs revenue within the prescribed timeline will be liable to penalty interest calculated at three per cent above the prevailing Nigerian Interbank Offered Rate for the period of the delay.
He added that affected banks would be formally notified of the delayed amounts, the applicable penalty, and the deadline for settlement.
“Accordingly, any designated bank that fails to remit collected Customs revenue within the prescribed period shall be liable to penalty interest calculated at three per cent above the prevailing Nigerian Interbank Offered Rate for the duration of the delay.
“Affected banks will receive formal notifications indicating the delayed amount, applicable penalty, and the timeline for settlement,” the statement read.
By Aduragbemi Omiyale
The deputy managing director of First Bank of Nigeria (FBN) Limited, Mr Ini Ebong, has offloaded some shares of FBN Holdings Plc, the parent firm of the banking institution.
A regulatory notice from the Nigerian Exchange (NGX) Limited confirmed the development on Thursday.
It was disclosed that the transaction occurred on Friday, December 12, 2025, on the floor of the stock exchange.
The sale involved about 11.8 million shares, precisely 11,783,333 units traded at N31.14 per share, amounting to about N366.9 million.
Mr Ebong, who studied Architecture from University of Ife and obtained Bachelor and Master of Science degrees, became the DMD of First Bank in June 2024. Prior to this appointment, he was Executive Director, Treasury and International Banking since January 2022.
He was previously the Group Executive, Treasury and International Banking, a position he held since 2016 after serving as the bank’s Treasurer from 2011 to 2016.
Before joining First Bank, he was the Head of African Fixed Income and Local Markets Trading, Renaissance Securities Nigeria Limited, the Nigerian registered subsidiary of Renaissance Capital. He also worked with Citigroup for 14 years as Country Treasurer and Sales and Trading Business Head.
He has a passion for market development and has worked actively to drive change and internationalisation of the Nigerian financial markets: foreign exchange, fixed income and securities.
He has worked closely with regulatory bodies such as the Central Bank of Nigeria (CBN) and the Debt Management Office (DMO) in assisting with the development of fresh monetary and foreign exchange policies, to broaden and deepen markets and open them up to international practices.
At various times he has facilitated and delivered courses and seminars on a wide variety of subjects covering Money Markets, Securities and Foreign exchange trading and market risk management subjects to regulators, corporate customers, banks and market participants.
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