Banking
FCMB, Fidelity Bank, Diamond Bank Get Moody’s First-Time Ratings
By Dipo Olowookere
Notable rating agency, Moody’s Investors Service, on Monday assigned first-time ratings to three Nigerian tier-two lenders.
The three mid-tier banks are First City Monument Bank Limited (FCMB), Fidelity Bank Plc and Diamond Bank Plc.
While the long term global scale local-currency bank deposit and issuer ratings of B2 were assigned to FCMB and Fidelity Bank, Diamond Bank had the long term B3 global scale local-currency bank deposit and issuer ratings.
A statement issued by Moody’s noted that the three mid-tier Nigerian banks account for approximately 12 percent of the country’s banking assets.
Moody’s also assigned local currency bank deposit national scale ratings (NSRs) of A2.ng to FCMB and Fidelity Bank and A3.ng to Diamond Bank.
In the statement, Moody’s explained that the primary drivers of its assessment of the banks’ standalone credit profiles were their robust loss-absorbing buffers, above its global average for similarly rated peers, and their resilient local currency liquidity buffers.
These strengths, however, are moderated by the challenging operating environment in Nigeria, as the oil and gas dependent economy slowly recovers from its 2016 recession.
Moody’s said it also incorporated one notch of rating uplift, based on a high probability of government support, from the banks’ Baseline Credit Assessments (BCA) of b3 for FCMB and Fidelity Bank and caa1 for Diamond Bank.
The B2 local-currency deposit and issuer ratings assigned to FCMB and Fidelity Bank were aligned with the ratings of the Nigerian government, the rating agency said.
For FCMB and Fidelity Bank, Moody’s has assigned a stable outlook on long-term global scale bank deposit and issuer ratings.
“The stable outlooks reflect our expectations that over the next 18 months credit costs associated with the banks’ loan portfolio will be absorbed by pre-provision profits and that overall, these banks’ credit fundamentals will continue to remain in line with peers at the B2 rating level,” the statement said.
For Diamond Bank, Moody’s has assigned a positive outlook on its long-term global scale bank deposit and issuer ratings.
It said Diamond Bank’s positive outlook reflects its expectation that elevated asset risks will decline this year on account of the resolution of some of its past due loans that have not been impaired.
“It also reflects our view that the ongoing deleveraging of the bank will improve the bank’s funding profile and support capital,” Moody’s said.
Moody’s explained that FCMB’s BCA of b3 reflects the bank’s robust levels of tangible common equity versus peers internationally.
At year-end 2017, FCMB’s tangible common equity to risk-weighted asset ratio (TCE/RWA) was 13.7 percent which compares favourably to the b3 global peer average of 11 percent.
However, the agency views FCMB’s capitalization as being moderated by the bank’s exposure to foreign currency risks.
As of December 2017, 55 percent of the bank’s loan book was denominated in foreign currency, and any further depreciation of the naira will inflate risk-weighted assets, thus reducing capital ratios.
Over the next 18 months, Moody’s expects the bank’s relatively robust pre-provision income and flat loan growth, as sought by management, to support capital.
The bank’s nonperforming loan (NPL) ratio was just 4.7 percent as of December 2017, versus the banking system NPL ratio of 15.1 percent as of September 2017.
FCMB’s exposure to upstream and midstream oil and gas sectors and foreign currency denominated loans leave the bank’s loan performance vulnerable to both global oil prices and the depreciation of the local currency, the naira.
Additionally, FCMB has significant exposure to retail loans (individuals and SMEs) of approximately 28 percent, making the bank’s asset risk more sensitive to downside scenarios than its domestic peers.
However, the rating firm expects only modest upward pressure on FCMB’s NPL ratio in 2018 as the vast majority of the bank’s oil and gas upstream and midstream portfolio has been restructured to reflect the new oil price environment and, as such, Moody’s expects many of these loans to remain performing over our outlook period.
From a liquidity perspective, the bank is able meet all its foreign currency obligations over the next 18 months with its current stock of foreign currency liquid assets.
However, the bank’s foreign currency loans to foreign currency deposits ratio of 198 percent will require the bank to continue to rely on confidence-sensitive dollar funding should the bank want to maintain its current level of foreign currency assets going forward.
Positively, a large proportion of market funds are from less confidence-sensitive development finance institutions or international banks with a developmental focus.
FCMB benefits from a strong retail franchise as indicated by its capacity to grow its retail deposits amidst a challenging operating environment.
On the asset side, although a potential source of asset risk for the bank, as highlighted above, the banks retail exposure will continue to support profitability given the high margins in this sector versus expectation of manageable credit costs going forward.
The bank’s long-term B2 local currency bank deposit rating incorporates one notch of rating uplift from its b3 BCA, based on Moody’s assessment of a high probability of government support in case of financial stress.
The high willingness to support the banks by the Nigerian government was demonstrated in the last crisis, when banks were rescued through recapitalisations and balance sheet clean ups via outright purchases of NPLs by the Asset Management Corporation of Nigeria (AMCON).
Fidelity Bank Plc
Fidelity Bank has been assigned B2 local currency bank deposit and issuer ratings, with a stable outlook. The ratings are underpinned by a standalone BCA of b3.
Fidelity Bank’s BCA of b3 reflects the bank’s resilient asset quality and relatively high provision coverage of NPLs.
As of December 2017, Fidelity Bank’s NPLs were 6.4 percent of gross loans which compares favourably against the banking system average of 15.1 percent as of September 2017.
The bank’s coverage ratio, including regulatory reserves, was 109 percent which would provide capacity for the bank to write off some of its old NPLs and reduce the ratio.
Although Fidelity Bank’s high exposure to foreign currency denominated loans is a source of risk, the bank’s exposure to the oil and gas industry is relatively low at 26 percent. The bank’s oil and gas exposure is predominantly to the upstream segment which makes up 73 percent of oil and gas loans and which has not produced any NPLs in 2017, following the restructuring of these loans.
Overall, Moody’s expects Fidelity Bank’s NPL ratio to remain stable at the current level of about 6.5 percent.
Another factor that Moody’s considered was Fidelity Bank’s relatively solid tangible common equity ratio which provides a reasonable loss absorbance buffer.
As of December 2017, tangible common equity as a percentage of risk-weighted assets stood at 15.4 percent, which is higher than the global b3 BCA peer median of 11 percent, and compares favourably against local peers.
“However, we view Fidelity Bank’s reported capitalization as being moderated by the bank’s exposure to foreign currency risks,” Moody’s said in the statement.
As of December 2017, 46 percent of the bank’s loan book was denominated in foreign currency, and any further depreciation of the naira will inflate risk-weighted assets, thus reducing capital ratios. Like many of its peers, Moody’s considers Fidelity Bank’s capacity to grow its profitability as limited because of the still difficult, although improving, operating environment and the declining yields on the bank’s government security exposures, which will limit profit retention for capital growth.
Fidelity Bank’s relatively high loans to deposits ratio of 103 percent (please note that the loan balance used in the calculation of this ratio includes on-lending facilities) indicates a tighter funding requirement than other local banks and global peers.
The bank’s deposits declined in 2017 because it transferred out government-related deposits to the Central Bank of Nigeria (CBN) on account of the Treasury Single Account (TSA).
The deposits were predominantly foreign currency deposits, and as a result, Fidelity Bnak’s foreign currency deposits declined by 51 percent, leading to a high foreign currency loans to foreign currency deposits ratio of above 370 percent.
Moody’s said it considers this to be credit negative because, although the bank is predominantly deposit funded, it will also need to rely on more expensive and confidence-sensitive non-deposit funding, which will likely strain its margins and profitability.
However, Fidelity Bank’s overall liquidity buffers are robust, with the bank’s reported liquidity ratio of 36 percent against a regulatory requirement of 30 percent.
From a foreign currency perspective, though foreign currency liquid assets are modest, they are sufficient to meet the bank’s upcoming foreign currency obligations over the next 18 months.
The bank’s long-term B2 local currency bank deposit rating incorporates one notch of rating uplift from its b3 BCA, based on Moody’s assessment of a high probability of government support in case of financial stress.
The high willingness to support the banks by the Nigerian government was demonstrated in the last crisis, when banks were rescued through recapitalisations and balance sheet clean ups via outright purchases of NPLs by the Asset Management Corporation of Nigeria (AMCON).
Diamond Bank Plc
Diamond Bank has been assigned B3 local currency bank deposit and issuer ratings, with a positive outlook. The ratings are underpinned by a standalone BCA of caa1.
The bank’s BCA of caa1 reflects its high asset risks as indicated by its relatively high Moody’s adjusted NPL ratio (which adds accounts overdue by longer than 90 days but not impaired to the impaired loans stock) and credit costs which strained profitability, especially in 2017.
Moody’s adjusted NPLs accounted for around 42 percent of gross loans as of December 2017. Diamond Bank has relatively high exposures to the oil & gas sector (predominantly the trouble midstream sector) at 52 percent of total loans as of December 2017 and a high proportion of foreign currency denominated loans that make up 46 percent of the bank’s total loans. Though credit losses will remain elevated, asset risks will decline this year on account of resolution of some of its past due loans that have not been impaired.
The bank also faces relatively tight foreign currency funding, because the bank’s foreign currency loans to foreign currency deposits of 156 percent will require the bank to rely on confidence-sensitive market funding to support its dollar assets.
Similar to other Nigerian mid-tier banks, dollar deposits contracted in 2017 and although Moody’s expects the situation to improve this year, mid-tier banks such as Diamond Bank will likely remain under some pressure because competition for these deposits has increased.
Additionally, about $330 million of Diamond Bank’s foreign currency obligations are maturing within the next 18 months, a substantial amount relative to the bank’s foreign currency liquid assets.
That said, Diamond Bank’s standalone credit profile also captures the bank’s relatively robust capital buffers and relatively low nominal leverage.
As of December 2017, the bank’s tangible common equity was 14.7 percent and its shareholders’ equity to total assets ratio was 13 percent, although this is moderated by the low provisioning.
Diamond Bank also benefits from its strong franchise as a retail bank, and therefore benefits from stable and low cost retail deposits (around 70 percent of deposits are retail deposits, which is among the highest retail ratio of any rated Nigerian bank).
In addition, Diamond Bank maintains high liquidity buffers in local currency.
As of December 2017, the bank’s reported liquidity ratio was 43 percent which provides a cushion to the minimum requirement of 30 percent.
The bank’s long-term B3 local currency bank deposit rating incorporates one notch of rating uplift from its caa1 BCA, based on Moody’s assessment of a high probability of government support in case of financial stress.
In 2013 the CBN classified Diamond Bank as a Systemically Important Bank (SIB), which supports Moody’s high willingness of support assumption.
Additionally, the high willingness to support the banks by the Nigerian government was demonstrated in the last crisis, when banks were rescued through recapitalisations and balance sheet clean ups via outright purchases of NPLs by the Asset Management Corporation of Nigeria (AMCON).
By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has directed Nigerian banks to flag suspected fraud Bank Verification Numbers (BVNs) after a 24-hour watchlist from May 1.
According to a circular signed by Mr Musa Jimoh, the Director of the Payment Systems Policy Department, the apex bank introduced this new policy in an amended version of the 2021 Revised Regulatory Framework for BVN and Watch-List for the Nigerian Banking Industry.
The circular titled, Addendum to the Revised Regulatory Framework for Bank Verification Number Operations and Watch-List for the Nigerian Banking Industry, disclosed that the new framework introduces four new policies which mandate Financial Institutions to establish and maintain a temporary watchlist for BVNs implicated in suspected fraudulent transactions reported by a financial institution.
The statement reads, “A BVN may remain on this temporary Watchlist for a maximum period of twenty-four (24) hours; during this period, the BVN owner shall be contacted to provide clarification regarding the identified transaction(s).”
For the BVN enrolment age requirement, the circular reads, “Enrolment for BVN is restricted to individuals who have attained the age of eighteen (18) years and above.”
For the restrictions on phone number amendments, the circular explained that updates on phone numbers linked to a BVN shall be allowed only once.
For Access to BVN data, the statement reads, “Access to the BVN databases shall be exclusively granted to Central Bank of Nigeria (CBN) licensed financial institutions. Notwithstanding this provision, the Central Bank of Nigeria (the Bank) reserves the right to approve access to the BVN databases in extenuating circumstances and in accordance with the provisions of extant laws.”
The apex bank urges financial institutions to act accordingly as implementation of the new provisions shall take effect from May 1, 2026.
Launched in February 2014 by the CBN in collaboration with the Nigeria Inter-Bank Settlement System (NIBSS), BVN was part of efforts to strengthen the security and integrity of Nigeria’s banking system amid broader banking reforms. It was introduced primarily to reduce banking fraud and identity theft, which had become widespread due to individuals opening multiple accounts under different identities across banks. By assigning each customer a unique biometric-based identification number linked to fingerprints and facial data, BVN ensures that all accounts belonging to a person across Nigerian banks can be verified and traced.
The system also improves the effectiveness of banks’ Know Your Customer (KYC) procedures, enhances transparency in financial transactions, and supports regulatory oversight within the financial sector.
At the Africa Trade Conference (ATC) 2026 held in Cape Town, South Africa, policymakers, financiers, and global business leaders gathered to confront one of Africa’s most persistent economic constraints: the continent’s vast trade financing gap.
Hosted by Access Bank Plc, the conference brought together stakeholders from governments, development finance institutions and the private sector to explore how Africa can transform its fragmented trade ecosystem and unlock the promise of the African Continental Free Trade Area.
The central message emerging from the discussions was clear: Africa must move from being a continent of landlocked markets to a network of land-linked economies, connected through finance, infrastructure and digital trade systems.
Turning Vision into Velocity
The conference, themed “Turning Vision into Velocity: Building Africa’s Trade Ecosystem for Real-World Impact,” focused on translating policy ambition into practical solutions for businesses across the continent.
Delivering the welcome address, Roosevelt Ogbonna, Managing Director and Chief Executive Officer of Access Bank Plc, emphasised that Africa must confront the structural barriers that continue to limit intra-continental commerce.
“The reality is that Africa still controls a small share of global trade,” Ogbonna said. “The corridors are still fragmented and more aspirational than functional, and too many small businesses that aspire to trade across Africa remain constrained.”
According to him, the conference was convened to continue the conversation begun at its inaugural edition in 2025, focusing on how Africa can expand trade within the continent while strengthening its participation in global markets.
“This conference must not end as another talking shop,” he said. “It must become the birthplace of a movement that contributes to transforming intra-African trade.”
For Access Bank Plc, the role of financial institutions in that transformation is evolving.
“At Access Bank, we see ourselves as financiers and connectors of markets, ideas and opportunities,” Ogbonna noted. “Our role is to help African businesses move from ambition to impact, from local relevance to global competitiveness.”
Bridging Africa’s Trade Finance Gap
Despite its abundant natural resources and population of more than 1.3 billion people, Africa remains underrepresented in global trade flows.
One of the biggest barriers is the lack of accessible financing for exporters, manufacturers and small businesses seeking to expand across borders. The trade finance gap continues to constrain intra-African commerce, which remains significantly below levels recorded in other regional trading blocs.
To address this, Ogbonna highlighted three strategic priorities that emerged from the previous edition of the conference: breaking down silos between policymakers, financial institutions and businesses; building a trade ecosystem powered by reliable data and analytics, and developing systems that support both large corporations and smaller businesses expanding across borders
Encouragingly, he noted that progress is already emerging across several sectors.
“We have seen value chains emerging across agriculture, manufacturing and services, and we are seeing African brands crossing borders and building a global presence,” he said.
Nevertheless, the gains remain uneven across the continent, with progress concentrated in a few markets and trade corridors.
Financing the Future of African Trade
Beyond the structural challenges of trade finance and infrastructure, the conference also explored the evolving financial architecture required to unlock Africa’s full trade potential.
Keynote addresses were delivered by Kennedy Mbekeani, Director General for the Southern Africa Region at the African Development Bank, and Kwabena Ayirebi, Managing Director of Banking Operations at the African Export-Import Bank.
Both speakers emphasised the need for stronger collaboration among development finance institutions, commercial banks and governments to mobilise the capital required to drive infrastructure development and support trade across the continent.
Mbekeani stressed that private capital would be crucial in bridging Africa’s infrastructure financing gap.
“The mobilisation of private capital remains crucial as many African governments are constrained by limited fiscal space and overstretched balance sheets,” he said.
“The mobilisation of capital, particularly private capital, is something that we need to work on.”
The conversation was further enriched by insights from Tolu Oyekan, Managing Director and Partner at Boston Consulting Group, who presented the Africa Trade Outlook 2026.
His presentation highlighted the macroeconomic forces shaping the future of African trade, including shifting global supply chains, the growing importance of regional value chains and emerging opportunities for African industries to capture greater value in global markets.
Digital infrastructure and payments were also central to the conversation.
Mike Ogbalu, Chief Executive Officer of the Pan-African Payment and Settlement System, underscored the importance of payment interoperability in enabling seamless cross-border transactions across the continent.
Efficient payment systems, he noted, are essential to reducing the cost and complexity of trading across African borders, particularly for small and medium-sized enterprises.
Policy, Finance and Partnerships
The conference also convened a high-level ministerial panel that brought together policymakers and financial sector leaders to examine the policy environment required to accelerate Africa’s economic integration.
Participants included Elizabeth Ofosu Adjare, Ghana’s Minister for Trade, Agribusiness and Industry, and Tiroeaone Ntsima, Botswana’s Minister of Trade and Entrepreneurship, alongside senior executives from international financial institutions.
Together, they explored how regulatory alignment, infrastructure development and innovative financing structures can accelerate the implementation of the African Continental Free Trade Area and unlock intra-African trade.
The objective, participants agreed, was not merely dialogue but partnership, bringing together the policymakers, financiers and businesses capable of translating Africa’s trade ambitions into tangible outcomes.
Reimagining Africa’s Economic Geography
Beyond policy discussions and financing strategies, the conference reflected a deeper shift in how Africa views its economic geography.
For decades, the continent’s development challenges have often been framed in terms of physical constraints: landlocked economies, fragmented markets and weak infrastructure.
But the emerging vision presented in Cape Town suggests a different future, one where integrated banking networks, digital payment systems and trade finance platforms transform isolated markets into connected trade corridors.
For Access Bank Plc, that transformation is already underway.
With operations spanning 25 countries globally, including 16 across Africa, the bank is building financial corridors that link African businesses to each other and to global markets.
From Potential to Participation
The conversations at the Africa Trade Conference reinforced a growing consensus across the continent: Africa’s economic transformation will depend on policy reforms and institutions capable of financing and facilitating trade.
Banks, development finance institutions and payment platforms are increasingly becoming the connective tissue linking African markets.
For Access Bank, the ambition is clear, helping reshape the narrative of African trade.
From isolated markets to integrated corridors. From landlocked constraints to land-linked opportunity. And from economic potential to meaningful participation in the global trading system.
By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has rolled out fresh technology-driven rules compelling banks and other financial institutions to deploy automated anti-money laundering systems capable of detecting suspicious transactions in real time.
The directive, contained in a circular issued on March 10, 2026, applies to deposit money banks, mobile money operators, international money transfer operators, payment service providers, and other institutions under the apex bank’s supervision.
According to the regulator, the new framework sets minimum standards for automated anti-money laundering solutions designed to strengthen the detection and reporting of financial crimes within Nigeria’s rapidly digitising financial ecosystem.
In the circular, the CBN explained that the guidelines establish a baseline structure for financial institutions to deploy advanced monitoring tools capable of flagging suspicious financial activities instantly.
“The baseline standards provide a framework for implementing automated solutions that strengthen the detection and reporting of suspicious transactions in real time and enhance compliance with applicable AML/CFT/CPF laws and regulations, while also supporting the use of emerging technologies to improve overall financial crime risk management,” it stated.
The circular was jointly signed by the Director of Banking Supervision, Mrs Akinwunmi A. Olubukola, and Mrs Olubunmi Ayodele-Oni, acting for the Director of the Compliance Department.
Under the new policy, financial institutions must deploy automated anti-money laundering platforms that combine customer identification systems, transaction monitoring, sanctions screening, and risk assessment tools into a single integrated framework.
The CBN said the guidelines apply to all institutions operating within the financial system under its regulatory authority, including banks, payment companies, and other licensed financial service providers.
While the new rules take effect immediately, institutions have been given specific timelines to fully implement the required technology infrastructure.
Deposit money banks are expected to achieve full compliance within 18 months, while other financial institutions have 24 months to meet the regulatory requirements.
In addition, all institutions are required to submit detailed implementation roadmaps within three months of the issuance of the circular.
“The implementation of these guidelines shall start from the date of issuance, while full compliance shall be 18 months (for Deposit Money Banks) and 24-months (for Other Financial Institutions) from the date of issuance,” the apex bank added.
A major highlight of the framework is the emphasis on advanced technology tools such as artificial intelligence, machine learning, predictive analytics, and behavioural monitoring to identify unusual financial patterns that may indicate criminal activity.
Under the guidelines, institutions must deploy systems capable of conducting risk-based customer due diligence, monitoring transactions across multiple financial channels, and screening customers against sanctions databases and lists of politically exposed persons.
The CBN also directed that these automated systems must integrate seamlessly with core banking infrastructure and customer identity databases, enabling continuous real-time analysis of transaction flows and behavioural patterns.
According to the apex bank, traditional manual monitoring processes are increasingly inadequate in a financial environment that is becoming more complex and heavily driven by digital payments, fintech platforms, and mobile banking.
The regulator said automated surveillance systems would enable institutions to identify potential financial crimes earlier and report suspicious transactions promptly to authorities such as the CBN and the Nigerian Financial Intelligence Unit (NFIU).
The guidelines further require financial institutions to establish governance structures to oversee the performance of automated systems, validate artificial intelligence models, and ensure that data protection safeguards comply with Nigeria’s privacy regulations.
Beyond technology deployment, institutions must maintain detailed audit trails and case management systems that document investigations into suspicious financial activity and track regulatory reporting obligations.
The central bank warned that institutions that fail to comply with the new standards or operate ineffective anti-money laundering frameworks could face regulatory penalties.
Compliance will be monitored through a combination of off-site regulatory surveillance, on-site examinations, and targeted thematic reviews conducted by the banking regulator.
The CBN emphasised that the newly issued standards represent only the minimum compliance benchmark, adding that institutions may be required to implement stronger controls depending on their operational scale, transaction volumes, and risk exposure.
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