Banking
Unity Bank, Wema Bank, Others “Potentially Challenged”—Report
By Modupe Gbadeyanka
All seems not to be too well with second tier banks in Nigeria, including Unity Bank, which has reportedly been in talks with investors since October.
According to a report by Bloomberg, analysts at Exotix Partners LLP, Jumai Mohammed and Ronak Gadhia said in a note last month that, “We view the Tier 2 banks as potentially challenged” because they seem unable “to weather asset-quality deterioration storms.”
Bloomberg said in its report published today titled ‘Nigeria Bank Divide Widens as Cash Shortage Chokes Small Lenders’ that small-and-medium sized lenders like Wema Bank Plc dropped plans last month to raise Dollar loans to rather sell Naira debt locally in smaller tranches.
Unity Bank Plc, which missed a February 28 central bank deadline to recapitalize, has been in talks with investors since October, while Diamond Bank Plc started negotiations to sell businesses and issue debt over a year ago.
The report quoted an analyst at Afrinvest West Africa Ltd, Omotola Abimbola, as saying “The gap between the Tier 1 and Tier 2 banks has been widening in profitability and balance-sheet size,” expressing fears that, “In the next one or two years, we will probably see the trend extending further.”
Below is Bloomberg’s report:
The divide between the haves and the have-nots among Nigerian banks is widening.
The country’s biggest lender is so flush with cash it plans to repay $400 million of bonds when they become due in November 2018 rather than raising additional debt, while the next two largest banks sold international bonds for the first time since 2014.
At the other end of the scale, smaller lenders are scrapping plans to raise dollar loans and struggling to find investors to raise capital.
Top tier banks in Africa’s most-populous nation and biggest oil producer are rallying after the central bank in April opened a foreign-exchange trading window, easing a crippling currency shortage that contributed to the worst economic contraction in 25 years.
Smaller banks are lagging behind as they battle rising levels of non-performing loans and capital buffers near regulatory minimums.
“The gap between the Tier 1 and Tier 2 banks has been widening in profitability and balance-sheet size,” said Omotola Abimbola, an analyst at Afrinvest West Africa Ltd. “In the next one or two years we will probably see the trend extending further.”
United Bank for Africa Plc, the third-biggest lender by market value, raised $500 million in its first Eurobond sale on June 1 at yields below initial guidance.
This followed an equivalent issue a week earlier by Zenith Bank Plc in a deal that was four times oversubscribed. Guaranty Trust Bank Plc, Nigeria’s largest lender, said this month it has no plans to sell Eurobonds because it’s setting aside funds to repay existing debt.
‘Potentially Challenged’
By contrast, small- and-medium sized lenders like Wema Bank Plc dropped plans last month to raise dollar loans to rather sell naira debt locally in smaller tranches. Unity Bank Plc, which missed a Feb. 28 central bank deadline to recapitalize, has been in talks with investors since October, while Diamond Bank Plc started negotiations to sell businesses and issue debt over a year ago.
“We view the Tier 2 banks as potentially challenged,” Exotix Partners LLP analysts Jumai Mohammed and Ronak Gadhia said in a note last month. The lenders seem unable “to weather asset-quality deterioration storms.”
Still, the five-year dollar bonds didn’t come cheap. Lagos-based United Bank for Africa settled on a coupon, or interest paid twice annually, of 7.75 percent. That’s the highest of at least 10 sales of $500 million by emerging-market banks this year from Turkey, Kuwait, Bahrain, South Korea and China. Zenith will pay 7.375 percent on the securities it placed, compared with 6.25 percent on five-year notes sold in April 2014.
Even so, more lenders will issue Eurobonds because they need dollars to offer loans in the U.S. currency or to repay debt, said Lekan Olabode, an analyst at Vetiva Capital Management Ltd. in Lagos. Lome, Togo-based Ecobank Transnational Inc. plans to sell a $400 million, 5-year convertible bond this month, which will be used to refinance debt and provide short-term bridge funding for non-performing loans at its Nigerian unit, its biggest business.
Margin Impact
Access Bank Plc has $350 million of bonds due in July, while Fidelity Bank Plc has to repay $300 million next May. “Any Eurobond issuance from the Tier 2 names will come in relatively more expensive — impacting margins,” Olabode said.
Some banks may use share-price gains to sell equity, although most trade at less than book value, making a rights offering expensive, he said. Local debt also comes at a price, with yields on 5-year government bonds at 16.3 percent.
The Nigerian Stock Exchange Banking Index has advanced 44 percent this year, with United Bank for Africa soaring 99 percent to its highest since January 2014, while Access Bank has climbed 83 percent to a four-year high. Wema has gained less than 2 percent and Skye Bank Plc and Union Bank of Nigeria Plc are up about 10 percent in 2017.
Union Bank, in which former Barclays Plc Chief Executive Officer Bob Diamond’s Atlas Mara Ltd. owns 31 percent, said in November it will sell as much as 50 billion naira ($156 million) in a rights issue. The sale is still scheduled to happen by the end of this quarter, spokeswoman Ogochukwu Ekezie-Ekaidem said on June 8.
Sterling Bank, which announced plans to raise 65 billion naira in Tier 2 capital last July, managed to raise 7.9 billion naira in 2016 at 16.5 percent, according to Chief Financial Officer Abubakar Suleiman. “We don’t think the market conditions are OK to raise it now, so we are waiting,’’ he said.
Without enough capital to back new business and write loans, small lenders risk falling further behind as Nigeria’s economy recovers from last year’s 1.6 percent contraction. The International Monetary Fund forecasts Nigeria will expand 0.8 percent this year as the oil price improves.
“Big banks have a pricing advantage,” said Olabode. “That makes a big difference in size and capacity to do business.”
Additional Information from Bloomberg
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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