Banking
Fitch Affirms First Bank’s B- Rating with Negative Outlook
By Modupe Gbadeyanka
Renowned rating agency, Fitch Ratings, has announced affirming the Long-Term Issuer Default Ratings (IDR) of FBN Holdings Plc (FBNH) and First Bank of Nigeria Ltd (FBN).
A statement issued yesterday said the banks’ Viability Ratings (VR) have been affirmed at ‘B-‘ and the Support Ratings at ‘5’, while the the Long-Term National Ratings have been affirmed at ‘BB+(nga)’ with the outlooks negative.
FBN Holdings is the non-operating holding company which owns FBN. Its ratings are aligned with those of FBN, its main operating subsidiary.
Fitch said FBN’s ratings are driven by its standalone creditworthiness. Reducing the group’s dependence on contributions from FBN is a medium-term target.
Currently, FBN generates around 90% of group revenues, but the objective is to increase contributions from other subsidiaries over time. FBN represents around 95% of consolidated group assets.
FBN is one of Nigeria’s largest banks, with shares of 14% and 17% of banking sector loans and deposits, respectively.
Fitch noted that FBNH has a strong franchise but its asset quality is troubled and capital levels are not commensurate with risk, in its view, reflecting high impaired loans. In the past, the group’s business model was reliant on large, often oil-related, corporate lending. Risk-control deficiencies are being addressed by new management.
Gross loans represent slightly below half of FBNH’s balance sheet. Around 40% of gross loans are extended to the oil and gas sectors, many of which have been restructured.
The rating agency views that restructuring efforts made to align debt servicing schedules with projected cash flows appear reasonable and the performance of restructured loans appears to be holding up well.
It added that loan loss reserve coverage reached 52% of impaired loans at end-September 2017, low compared with the average for large Nigerian banks peers (around 90%). Unreserved impaired loans represented 36% of Fitch Core Capital (FCC). FBNH’s capital ratios are low compared with peers and capital weakness has a high influence on the ratings.
FBNH’s margins are in line with peer averages and cost/income ratios are reasonable, considering the bank’s large branch network, it said, adding that FBN’s ability to generate revenues at pre-impairment operating level is strong, but high impairment charges have impacted earnings and profitability in 2016 and 2017.
The structure of FBNH’s funding base is credit positive. Stable customer deposits, largely held at FBN and demonstrating considerable stability, represent around two-thirds of FBNH’s total deposits. FBNH’s funding costs are lower than peers, reflecting FBN’s strong retail franchise. Local currency liquidity ratios are consistently well above minimum regulatory limits, the rating firm stated.
Foreign currency(FC)-denominated borrowings, which represent around 5% of total funding, mainly comprise two Eurobond issues, maturing in August 2020 and July 2021.
It said access to international capital markets can be unsteady for Nigerian banks, exposing them to refinancing risks, but international banks continued to lend to FBN throughout 2016 when several Nigerian banks experienced tight FC liquidity positions. This is an indication of market confidence in the group which we view positively.
The Negative Outlook reflects pressure on capital arising from a still large amount of unreserved impaired loans, the rating agency headquartered in New York said.
Commenting further, Fitch said FBNH’s and FBN’s National Ratings reflect their creditworthiness relative to the country’s best credit and relative to peers operating in Nigeria.
In its report, Fitch said it believes that sovereign support to Nigerian banks cannot be relied on given Nigeria’s (B+/Negative) weak ability to provide support, particularly in FC.
In addition, there are no clear messages from the authorities regarding their willingness to support the banking system. Therefore, the Support Rating Floor of all Nigerian banks is ‘No Floor’ and all Support Ratings are ‘5’.
“This reflects our view that senior creditors cannot rely on receiving full and timely extraordinary support from the Nigerian sovereign if any of the banks become non-viable,” it said.
The subordinated debt issued by FBN Finance B.V., a special purpose company established by the group for the purpose of debt issuance, is rated one notch below FBN’s VR. Recoveries on the notes in the event of default are considered to be below average, as evidenced by a Recovery Rating (RR) of ‘RR5’.
FBN’s and FBNH’s ratings are primarily sensitive to a change in the level of loan loss reserve cover. At present, unreserved impaired loans weigh on capital adequacy and this has a high influence on the ratings. Once asset quality trends demonstrate sustained improvement, loan loss reserves cover a larger proportion of impaired loans, and assuming the operating environment does not deteriorate, the Outlook on the ratings would no longer be Negative and upgrades could be envisaged. If key weaknesses are addressed, FBNH and FBN could achieve multi-notch upgrades because their ratings are well below their natural levels considering FBN’s size and position within Nigeria’s banking sector.
A downgrade could result from further weakness in already limited capital buffers, which could threaten FBN’s viability. Given the positive trends in asset quality improvement and capital retention, this is not our base case.
The SR is potentially sensitive to any change in assumptions around the propensity or ability of the sovereign to provide timely support to the bank.
Ratings assigned to the subordinated notes are on Rating Watch Positive (RWP). If modifiers are introduced to the ‘CCC’ IDR category, as proposed by Fitch’s exposure draft on Global Banking Criteria published on 12 December 2017, the subordinated notes would be rated ‘CCC+’, maintaining the one-notch differential with FBN’s VR.
By Adedapo Adesanya
The Senate has demanded detailed explanation from the Central Bank of Nigeria (CBN) over the alleged non-remittance of N1.44 trillion in operating surplus.
The Senate Committee on Banking, Insurance and Other Financial Institutions, chaired by Mr Tokunbo Abiru, opened its statutory briefing with a firm call for transparency at the apex bank, noting that the Auditor-General’s query on the unremitted funds required a full, clear and documented response, insisting that public trust in monetary governance depended on strict accountability.
While acknowledging the CBN’s achievements in stabilising the foreign exchange market and reducing inflation, Mr Abiru underscored that such progress must be accompanied by institutional responsibility.
He stated the Senate expected the CBN to explain the circumstances surrounding the query, outline corrective steps taken and reveal safeguards against future lapses.
This came as the Governor of the central bank, Mr Yemi Cardoso, appeared before the senate committee and offered an extensive review of economic conditions, asserting that Nigeria was experiencing renewed macroeconomic stability across major indicators.
Mr Cardoso attributed the progress to bold monetary reforms, foreign-exchange liberalisation and disciplined liquidity management implemented since mid-2025.
According to him, headline inflation had declined for seven consecutive months, from 34.6 per cent in November 2024 to 16.05 per cent in October 2025, marking the steepest and longest disinflation trend in over a decade.
Food inflation accruing to him also slowed to 13.12 per cent, supported by improved supply conditions and exchange-rate predictability.
The CBN governor described the foreign-exchange market as fundamentally transformed, adding that speculative attacks and arbitrage opportunities had largely disappeared.
According to him, the premium between the official and parallel markets had fallen to below two per cent, compared to over 60 per cent a year earlier. As of November 26, the naira traded at N1,442.92 per dollar at the Nigerian Foreign Exchange Market, stronger than the N1,551 average recorded in the first half of 2025.
He also announced a sharp rise in external reserves to $46.7 billion, the highest in nearly seven years and sufficient to cover over ten months of imports.
Diaspora remittances, he noted, had tripled to about $600 million monthly, while foreign capital inflows reached $20.98 billion in the first ten months of 2025, 70 per cent higher than in 2024 and more than four times the 2023 figure.
Cardoso further confirmed that the CBN had fully cleared the $7 billion verified FX backlog, restoring investor confidence and strengthening Nigeria’s balance-of-payments position.
On banking-sector stability, he reported that recapitalisation efforts were progressing smoothly. Twenty-seven banks had already raised new capital, with sixteen meeting or surpassing the new regulatory thresholds ahead of the March 31, 2026 deadline, highlighting improvements in ATM cash availability, digital-payments oversight and cybersecurity compliance.
Despite the positive indicators, the Senate sought clarity on several policy decisions.
Mr Abiru pressed for explanations on the sustained 45 per cent Cash Reserve Ratio (CRR), the 75 per cent CRR applied to non-Treasury Single Account public-sector deposits, FX forward settlements, mutilated naira notes in circulation, excessive bank charges, failed electronic transactions and the compliance of CBN subsidiaries with parliamentary oversight.
He also requested an update on the activities of the Financial Services Regulatory Coordinating Committee, arguing that stronger inter-agency cooperation was necessary to maintain public confidence.
The session later moved into a closed-door meeting.
By Modupe Gbadeyanka
About N3.6 trillion has been repaid to the Central Bank of Nigeria (CBN) by the Asset Management Corporation of Nigeria (AMCON) since its inception in 2010.
This information was revealed by the chief executive of AMCON, Mr Gbenga Alade, during a media parley to update the press on the activities of the agency.
Mr Alade said at the moment, the organisation still owes the central bank about N3 trillion for toxic assets of banks in the country.
He praised the organisation for its asset recovery drive, stressing that when compared with others across the world, Nigeria has done well.
“It is important to stress that the corporation has done tremendously well, especially when compared to other notable government-owned Asset Management Corporations around the world.
“Based on the balance at purchase, AMCON outperformed other Asset Management Corporations all over the world by achieving over 87 per cent in recoveries despite the unique challenges associated with debt recovery in Nigeria.
“The Malaysian Danaharta, which is adjudged one of the best performing Asset Management Corporation’s, only achieved 58 per cent. The Chinese Asset Management Corporation, despite its stricter laws, achieved just 33 per cent.
“Only the Korean Asset Management Corporation (KAMCO), South Korea, has achieved more recoveries than AMCON, with about 100 per cent. This was due to their brute force with which they chased the obligors.
“Despite KAMCO’s recovery records, the agency is still operational to date with slight realignments in its mandate.
“Other noted Asset Management Corporations that have transitioned into a perpetual institution of the various governments include, China Asset Management Company, Federal Deposit Insurance Corporation (FDIC) USA, and KFW Germany.
“So, gentlemen, without sounding immodest, AMCON has done well, and we will not relent until all the outstanding debts are fully realized,” Mr Alade stated.
On the financial performance of AMCON, he said last year, the firm posted a revenue of N156.25 billion and operating expenses of N29.04 billion, while for the 2025 fiscal year should be a revenue of N215.15 billion and operating expenses of N29.06 billion.
By Modupe Gbadeyanka
One of the non-interest banks in Nigeria, The Alternative Bank (AltBank), has opened a new branch in Effurun, Delta State.
The new office will serve the Edo-Delta region and provide purposeful banking and real financial empowerment for individuals, entrepreneurs, and businesses, a statement from the firm stated.
The lender disclosed that the Effurun branch is a bold move in its mission to reshape banking in Nigeria.
The launch was graced by key dignitaries, including the Ovie of Uvwie Kingdom, Emmanuel Ekemejewa Sideso Abe I; the Chairman of Uvwie Local Government, Anthony O. Ofoni, represented his vice, Andrew Agagbo; and the Special Adviser to the Governor of Delta State on Community Development, Mr Ernest Airoboyi; amongst others.
The Divisional Head for South at The Alternative Bank, Mr Chukwuemeka Agada, emphasised the institution’s commitment to Warri and its surrounding communities.
“By establishing a presence here, we are initiating a transformation in the way banking serves the people of Delta. Our purpose-driven approach ensures that customers’ financial goals are not just met but exceeded,” he stated.
“This branch represents our pledge to empower Warri’s dynamic businesses and families, providing them with the tools to grow without compromise,” Mr Agada added.
“We understand the heartbeat of this community, and we are excited to integrate our bank into the fabric of this dynamic region,” he stated further.
On his part, the representative of the Ovie, Mr Samuel Eshenake, challenged the bank to facilitate development and employment within the Effurun community.
The Regional Head for Edo/Delta at The Alternative Bank, Mr Akanni Owolabi, embraced this challenge, pledging that the bank will work sustainably to drive local commerce.
“At The Alternative Bank, we are committed to being an active partner in the development of Effurun. We see this branch as a catalyst for creating opportunities, driving employment, and supporting the growth of local businesses.
“Our mission is to empower this community, ensuring that every step forward is one of progress, prosperity, and shared success.”
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