Banking
Nigerian Banks to Still Struggle in 2017—Fitch
By Dipo Olowookere
Fitch Ratings says Nigerian banks will continue to face challenges this year, following an extremely difficult 2016.
Banks faced multiple threats from the operating environment in 2016, including Nigeria sliding into recession, the economy continuing to suffer from low oil prices and severe shortages of foreign currency (FC).
Consequently banks struggled with declining operating profitability (excluding translation gains), sluggish credit growth, fast asset quality deterioration, tight FC liquidity and weakening capitalisation, putting increasing pressure on their credit profiles.
Fitch, in its latest report, stated that outlook for the rest of 2017 is not much brighter, stressing that it believes that the banks will continue to face extremely tight FC liquidity despite the authorities’ best efforts to normalise the foreign-exchange (FX) interbank market and improve the supply of US dollars.
“Importantly, deliveries under the Central Bank of Nigeria’s (CBN) FX forward transactions since 1H16 have helped the banks access US dollars and reduce a large backlog of overdue trade finance obligations to international correspondent banks.
However, given the severity of the FC liquidity issues, refinancing risk remains at the top of our perceived risks for the sector, especially as some banks have large Eurobond maturities in 2017/2018,” the rating agency said.
It noted that fast asset quality deterioration is in line with its expectations given the macro challenges and the continuing issues in the oil-sector.
It added that oil-related impaired loans (NPLs) are high and this excludes large volumes of restructured loans.
Other industry sectors contributing to NPLs include general commerce and trading, which have been affected by both the naira depreciation and FC shortages.
For the Fitch-rated banks, “We believe the NPL ratio could rise to 10%-12% by end-1H17 (this remains lower than the CBN’s reported figure for the entire sector). As a one-off policy change, the CBN allowed banks to write off all fully reserved NPLs by end-2016.
“Together with significant loan restructuring (particularly in the oil sector), this will ease pressure on NPLs for now, in our view.”
Fitch further said slower economic growth and a lower risk appetite from banks will continue to translate into subdued credit growth and weak core earnings generation in 2017. Loan growth averaged 25% in 9M16, but this was due to the currency translation effect post devaluation as about half of sector loans are in FC. Loan growth was negligible in constant currency terms.
The banks’ 2016 profitability was underpinned by large translation gains booked on net long FC positions following the naira devaluation. Excluding these, some banks would have reported a significant fall in operating income.
Regulatory capital ratios are high from a global perspective, but remain under pressure due to inflated risk-weighted assets (due to the FC translation effect) and lower core retained earnings.
The agency said in its view, there is a limited margin of safety as some banks could very easily breach minimum regulatory requirements in the event of further naira depreciation and/or weaker asset quality.
It said the Long-Term IDRs of all banks’ are in the ‘B’ range, indicating highly speculative fundamental credit quality. The low ratings reflect the significant influence of the weak operating environment, which overshadows other rating factors. The banks’ IDRs are driven by their Viability Ratings, Fitch’s assessment of their standalone creditworthiness.
The agency pointed out that following a reassessment of potential sovereign support available to the banks in 2016, it believes that sovereign support cannot be relied on given Nigeria’s (B+/Negative) weak ability to do so in FC.
“As a consequence, we removed sovereign support from the Long-Term IDRs,” it said.
Concluding, Fitch said overall, the largest Nigerian banks with stronger and more diverse business models, high revenue-generating capacity and stronger liquidity profiles appear to be coping better than smaller banks on most metrics. However, tail risks remain high for all banks due to their sensitivity to concentration risk.
By Aduragbemi Omiyale
The N3.97 billion commercial paper issuance of AG Mortgage Bank Plc will close on Thursday, June 18, 2026.
The sale of the debt instrument by the real estate lender commenced on Wednesday, June 10, 2026.
It is under the N5 billion commercial paper issuance programme of the lending firm aimed to support its short-term working capital and funding requirements.
The company is selling the papers in two series, with Series 2 offered at a discounted rate of 19.2895 per cent for 270 days, and Series 3 at a discounted rate of 19.3651 per cent for 364 days.
The minimum subscription is N5 million, and subsequent additions of N1 million.
AG Mortgage Bank is a leading primary mortgage bank in Nigeria with over two decades of experience in providing affordable mortgage financing and housing finance solutions.
The bank has grown its asset base to over N33 billion and remains a key participant in major housing intervention programmes, including the National Housing Fund Scheme and other government-backed mortgage initiatives.
Supported by a diversified product offering, strong institutional credibility, and an experienced management team, AG Mortgage Bank continues to deliver solid financial performance.
For FY 2025, interest income increased by 28.1 per cent to N3.65 billion, while profit after tax rose by 130.0 per cent to N1.05 billion, reflecting strong earnings growth, operational efficiency, and prudent risk management.
By Aduragbemi Omiyale
The chairman of Access Holdings Plc, Mr Aigboje Aig-Imoukhuede, has reaffirmed the organisation’s long-term commitment to shareholders, expressing confidence in the company’s strategic positioning, which he said is underpinned by disciplined execution, a diversified business model, a strengthened capital base, and a clear focus on sustainable value creation.
Speaking at the 4th Annual General Meeting (AGM) of the firm on Wednesday, he explained that the temporary suspension of dividend distributions was a consequence of regulatory compliance requirements rather than any deterioration in the group’s financial performance.
Mr Aig-Imoukhuede reaffirmed that the financial institution’s earnings capacity remains strong and that the board’s position reflects adherence to supervisory expectations and prudent capital management principles.
He assured shareholders of the board’s commitment to resuming dividend payments as soon as the relevant regulatory conditions are satisfied, noting that, “Our approach is clear: capital retained today must translate into greater value tomorrow and sustainable returns for our shareholders.”
The Chairman reiterated the strategic imperative underpinning the company’s next phase of growth, saying, “Our strategy, From Scale to Value, reflects the natural evolution of our journey. Scale created opportunity; value creation is how we fully realise it.”
He noted that while the organisation continues to generate strong returns, ensuring that earnings per share consistently exceed the cost of capital remains central to unlocking sustainable shareholder value.
The retired banker also acknowledged the significant unrealised value embedded within the firm’s international subsidiaries and reiterated management’s focus on improving market recognition of that intrinsic value over time.
Commenting on the financial performance of the group in 2025, he said Access Holdings accelerated provisions on legacy and regulatory forbearance credit exposures, resulting in elevated impairment charges.
He explained that the group consciously prioritised balance sheet strength and long-term resilience over short-term earnings optimisation.
“Periods of economic uncertainty often reveal more about an institution than periods of uninterrupted growth. Our focus remains on building a business that is not only growing, but improving in the quality, resilience, and sustainability of its earnings,” he stated.
Last year, the financial services organisation delivered pre-tax profit of N1.007 trillion, underscoring the strength of its diversified platform and expanding earnings base across key markets. Total assets increased to N51.56 trillion, while customer deposits grew strongly, reflecting sustained franchise momentum and deepening customer trust.
By Modupe Gbadeyanka
A new report highlighting the transformation from a newly established fintech venture into one of Nigeria’s leading payment infrastructure providers has been launched by HabariPay Limited.
The report, known as the HabariPay Impact Report 2025, provides stakeholders with a comprehensive evolution, innovation journey, business performance, and impact of the fintech subsidiary of Guaranty Trust Holding Company (GTCO) Plc on the digital payments landscape.
The company’s contributions to enabling digital commerce, supporting businesses, strengthening payment infrastructure, and expanding financial access through technology-driven solutions were also captured in the piece.
The HabariPay Impact Report 2025 also highlights the organisation’s strong financial and operational performance, the growth of the Squad platform, and the development of infrastructure that powers payment acceptance, switching, transfers, merchant services, and value-added solutions.
The publication further explores the role of innovation, talent development, and ecosystem partnerships in driving the company’s success.
It showcases HabariPay’s investments in innovation through initiatives such as the Take on Squad Hackathon and the Squad Hackademy, both of which are helping to develop future technology talent and accelerate the creation of practical solutions to real-world challenges.
“As a technology-driven company, we believe that impact extends beyond financial performance. It is reflected in the businesses we enable, the merchants we support, the infrastructure we build, and the opportunities we create for the next generation of innovators.
“The HabariPay Impact Report 2025 captures this journey and demonstrates our commitment to creating sustainable value for customers, partners, and the broader economy,” the Managing Director of HabariPay, Ms Eduofon Japhet, said.
“The HabariPay Impact Report 2025 represents more than a reflection on our achievements; it is a testament to the deliberate investments we have made in building sustainable payment infrastructure, empowering businesses, fostering innovation, and creating long-term value for our stakeholders.
“As we look ahead, we remain committed to expanding our capabilities, deepening our impact, and shaping the future of digital payments through technology-driven solutions that are secure, scalable, and inclusive,” she added.
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