Banking
Moody’s Rates First Bank’s NPL Ratio Credit Negative
By Modupe Gbadeyanka
The non-performing loan (NPL) ratio of First Bank of Nigeria (FBN) Limited has been rated credit negative by Moody’s Investors Service because it requires higher loan-loss provisions that will harm profitability.
Moody’s said in a report on Thursday that, “We expected the bank’s NPL ratio to decline to 15 percent to 17 percent by year-end 2018 and to less than 15 percent this year.
“Although management is confident that a large percentage of these NPLs will be resolved this year, Nigeria’s benign economic environment will likely delay defaulters’ recoveries.”
First Bank, one of the five tier-one lenders in Nigeria, announced in its Q1 2019 earnings through its parent company, FBN Holdings Plc, that its NPL ratio was 25.3 percent of gross loans as of March 2019, and 25.9 percent at year-end 2018, versus 19.8 percent in October 2018.
FBN’s Stage 3 (impaired) loans at year-end were N535 billion (about $1.5 billion), which raised the NPL ratio to its present level, highest among its peers.
According to Moody’s, First Bank’s NPL ratio has been high, averaging around 22.6 percent between 2015 and 2018, indicating a challenging environment.
In addition, the Stage 2 loan, those with a significant deterioration in credit risk were 26 percent of gross loans at year end 2018 because of greater delinquencies.
Assuming there is no loan growth in 2019, and using FBN’s NPL ratio, which is a good proxy for First Bank, the bank would need to cut its stock of Stage 3 loans by about 60 percent to reduce the NPL ratio to below 10 percent, which is its management’s target for 2019. It is worthy to note that slower reduction in NPLs will strain First Bank’s solvency and credit profile.
Moody’s noted that because NPLs are concentrated among a few borrowers, resolution of just a few defaulters would significantly reduce the NPL ratio.
First Bank had substantial provisions of about 82 percent of NPLs as of March 2019, which would allow it to accelerate writing off some of its NPLs.
High NPLs will require First Bank to continue to set aside large loan-loss provisions, which will erode its net profits and reduce the amount it can retain capital.
First Bank’s high loan-loss provisions, which averaged 5.7 percent between 2014 and 2017, are significantly higher than those of its peers, which averaged 1.3 percent over the same period. Management’s 2019 loan-loss provision ratio target is 3 percent to 4 percent.
First Bank’s pre-provision income generation capacity is robust, which enables the bank to absorb these elevated asset risks.
The bank’s ratio of pre-provision income to average assets compares favourably with peers whose average ratio was 3.9 percent between 2014 and 2018.
However, the bank’s ratio of net income to average assets is weaker than its peers, limiting organic capital generation.
By Modupe Gbadeyanka
About N2 billion is expected to be used to finance renewable energy products for customers by the end of 2026 in an effort to accelerate Nigeria’s clean energy transition.
To meet this goal, Sterling Bank is launching Sterling Solar Financing Hubs inside StarTimes retail outlets to embed on-the-spot solar financing at the point of purchase.
From the N2 billion earmarked for this initiative, N600 million has already been used up.
Under this programme, customers can now walk into participating outlets, select their preferred solar solution, receive financial guidance from dedicated Sterling Solar Financing Advisors, and begin the financing process immediately, subject to the bank’s credit assessment.
The first phase of the rollout commenced this July with five Solar Financing Hubs across Lagos, located in Lekki, Ikeja, Festac, Surulere, and Victoria Island.
The network will expand rapidly to 46 StarTimes outlets nationwide before the end of the third quarter of 2026, with a view to extending the model to more than 200 StarTimes locations nationwide.
Both parties have promised to continue working together to democratise access to clean energy financing, empowering more Nigerians to solarise their homes and businesses while contributing to a greener future.
“Sterling exists to enrich lives, and we believe that access to clean, reliable energy should be within everyone’s reach. Through this partnership with StarTimes, we are democratising access to solar by bringing financing directly to the point of need, enabling more families and businesses to transition to sustainable energy without the burden of prohibitive upfront costs. This is about unlocking opportunity, improving livelihoods, and powering Nigeria’s future,” the Divisional Head of Renewable Energy and Mobility at Sterling Bank, Mr Darlington Nwankwo, said.
Also commenting, the Vice President of StarTimes Nigeria, Mr Eric Xiao, said, “With the rollout of the Sterling Solar Financing Hubs, we are doing more than just selling solar products; we are building a sustainable energy ecosystem. By integrating StarTimes’ extensive service network with Sterling Bank’s professional financial services, we are significantly lowering the barrier for Nigerian households and small businesses to access clean energy.
“Moving forward, we will continue to deepen this partnership, ensuring that more Nigerians can enjoy reliable, affordable, and smart energy solutions, ultimately turning our vision of energy accessibility into a reality for all.”
By Modupe Gbadeyanka
The Nigeria Business Summit Regional Tour of Stanbic IBTC Bank made a detour to Jogor Centre, Ibadan, Oyo State, on Wednesday, July 15, 2026, to empower Micro, Small, and Medium Enterprises (MSMEs).
The event brought together business leaders, development partners and government representatives to discuss pathways for sustainable enterprise development across the South-West.
Participants engaged in practical masterclasses on export opportunities; access to finance and business growth strategies; gaining actionable insights into market expansion; trade documentation; credit readiness; financial record-keeping; and structured financing solutions designed to support long-term business success.
The Head of Enterprise Banking at Stanbic IBTC Bank, Ms Olajumoke Bello, informed participants that the programme is part of the lender’s commitments to supporting MSMEs through practical business education, strategic partnerships and improved access to growth opportunities.
The Executive Director of Business and Commercial Banking at Stanbic IBTC Bank, Mr Remy Osuagwu, on his part, said, “Our ambition is to be more than a financial institution to Nigerian businesses. We want to be a trusted growth partner, providing the financing, business insights and advisory support entrepreneurs need to build sustainable enterprises and unlock new opportunities.”
Similarly, the chief executive of Stanbic IBTC Bank, Mr Wole Adeniyi, who reinforced the company’s commitment to enterprise development, highlighted the importance of providing businesses with the right support structures to enable sustainable growth and long-term competitiveness.
“At Stanbic IBTC, we believe that sustainable economic growth depends on the success of small and growing businesses. That is why we are focused on providing access to finance, practical advisory support and the connections businesses need to move from ambition to scale,” he stated.
The Oyo State Commissioner for Investment, Trade, Cooperatives, and Industry, Professor Soliu Adelabu, said the initiative was designed to support businesses and strengthen the state’s entrepreneurship ecosystem, praising the bank for its support for traders, entrepreneurs, and artisans in the state.
The Permanent Secretary in the Oyo State Ministry of Women Affairs and Social Inclusion, Mrs O.M. Shotonwa-Roagess, highlighted the importance of strategic partnerships in expanding economic opportunities for women and vulnerable groups across Oyo State. She noted that the ministry remains open to collaborating with organisations such as Stanbic IBTC, development partners and the private sector to drive financial inclusion, entrepreneurship and sustainable economic empowerment.
The Nigeria Business Summit Regional Tour forms part of Stanbic IBTC’s broader commitment to empowering entrepreneurs through capacity building, financial inclusion and strategic business support, helping enterprises unlock new opportunities for growth and long-term success.
The Ibadan leg built on the momentum of previous tour stops in Katsina and Aba.
By Adedapo Adesanya
The Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, says Nigeria anticipates remittances from citizens living abroad to increase by two-thirds in 2026 as it seeks to bolster its foreign-exchange reserves to $1 billion monthly.
“We are expecting that by the end of the year, we will hit about a billion Dollars a month from diaspora remittances,” he said at the 14th Annual BusinessDay CEO Forum in Lagos on Thursday, themed From Stability to Shared Prosperity.
Mr Cardoso said remittances are expected to be boosted from more than $600 million currently, banking on the CBN’s deliberate target at remittances to diversify reserve sources beyond oil earnings.
According to him, the apex bank engaged Nigerians abroad, banks and international partners to identify barriers to official remittance flows.
He said the lender subsequently reviewed policies to ensure easier movement of funds into and out of the country.
Mr Cardoso described the approach as providing free entry and free exit for foreign exchange.
He said the reforms helped double diaspora inflows within one year and exceeded initial expectations, also projecting annual remittances could reach about $8 billion if the current momentum was sustained, adding that the development reflected growing confidence in Nigeria’s financial system and foreign exchange market.
Mr Cardoso said reforms introduced by the apex bank had restored stability in the foreign exchange market and improved investors’ confidence.
He identified exchange rate unification as one of the central bank’s major achievements under the reforms programme.
According to him, replacing multiple exchange rate windows with a market-driven system eliminated distortions and improved transparency.
Mr Cardoso said improved foreign exchange liquidity and stronger reserves were among the gains from the reforms.
He said Nigeria’s net external reserves had risen from about $3 billion at the start of the reforms to above $40 billion currently, noting that gross external reserves had grown to about $52 billion, representing about 10 months of import cover.
According to him, the reserves are designed to shield the economy from external shocks and excessive market volatility.
He said the reserves were not meant for routine interventions or day-to-day exchange rate management.
