Banking
Fitch Affirms Zenith Bank at ‘B+’, Outlook Negative
By Modupe Gbadeyanka
Fitch Ratings has affirmed Zenith Bank Plc’s Long-Term Issuer Default Rating (IDR) at ‘B+’ with the Outlook Negative. Also, the lender’s Viability Rating (VR) was affirmed at ‘b+’ and its Support Rating at ‘5’.
Fitch said Zenith Bank’s IDRs are driven by its standalone creditworthiness, defined by the VR. The VR is constrained by Nigeria’s sovereign rating and the Negative Outlook on the Long-Term IDR mirrors the Outlook on Nigeria’s sovereign rating (B+/Negative).
Zenith’s VR is the highest assigned by Fitch to a Nigerian bank. This reflects the bank’s established franchise in Nigeria where it controls an overall markets share of around 16%. The franchise is particularly strong in the corporate segment. Loss-absorption capacity is strong relative to peers and management has demonstrated its ability to deliver a good performance through volatile operating cycles.
Fitch views Zenith’s management team positively. Decision-making is well spread across a broad number of executives to minimise reliance on individuals. Achieving targets in a volatile operating environment can be difficult but Zenith’s execution is strong relative to peers. The bank’s strategy is primarily to continue to service leading corporate clients.
The loan book represents around 45% of assets, which is lower than international banks, but in line with the average for large Nigerian banks. Zenith’s underwriting standards and risk controls compare favourably with the average for rated peers. Reported impaired loans are low as a percentage of gross loans (around 4%) and reserve coverage is above 100%. Lending to the oil and gas sector represents around 30% of total loans, average for the sector, and the top 20 loans represent around one-quarter of total loans, which is lower than average comparative figures reported by large Nigerian banks (around 40%).
The bank’s performance metrics compare favourably with peers. Margins are narrower, reflecting the corporate focus, but loan impairment charges also tend to be lower, as could be expected given the more resilient nature of the bank’s clients. Cost control has been reasonable considering high inflation in Nigeria. In 2018, we expect profitability to decline for many Nigerian banks, reflecting weak loan growth, lower Treasury Bill issuance and falling yields on these government securities. IFRS-9 will also result in a rise in loan impairment charges, although this is likely to be containable at Zenith.
Zenith’s capital adequacy ratios are among the strongest in Nigeria and leverage ratios are stable. The bank’s relative capital strengths are a positive ratings differentiator.
Like most Nigerian banks, deposits provide the bulk of funding (72% of total non-equity funding at end-September 2017). Deposits from corporate customers represented 57% of consolidated deposits at end-September 2017, but these tend to be stable.
Zenith issued a five-year USD500 million senior bond in the international capital markets in June 2017. Zenith’s ability to access international market funding, even in times of stress for Nigeria’s economy, is credit positive in our view, providing the bank with funding diversification and access to longer-term finance.
Zenith’s foreign currency (FC) liquidity position shows no apparent signs of stress over a 12-month horizon. The bank holds a sizeable FC liquid asset buffer and its ability to continue to honour FC obligations even during recent periods of extreme FC stress in the Nigerian banking sector demonstrates Zenith’s close attention to the management of its FC liquidity position.
The Long-Term National Rating has been affirmed at ‘AA-(nga)’. National Ratings reflect Zenith’s creditworthiness relative to the country’s best credit and to peers operating in Nigeria.
SENIOR DEBT
Senior debt issued by Zenith is rated at the same level as the bank’s IDRs because in our view, the likelihood of default on these notes reflects the likelihood of default of the bank. The Recovery Rating (RR) assigned to these notes is ‘RR4’ indicating average recovery prospects.
SUPPORT RATING AND SUPPORT RATING FLOOR
Fitch believes that sovereign support to Nigerian banks cannot be relied on given Nigeria’s 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.
RATING SENSITIVITIES
IDRS, NATIONAL RATINGS AND VR
The bank’s IDRs, National Ratings and VR are sensitive to changes in Nigeria’s operating environment and to factors impacting Zenith’s intrinsic creditworthiness. The operating environment is unlikely to improve until the outlook for the sovereign rating improves. Zenith’s ratings are sensitive to a significant deterioration in asset quality and a resultant weakening of loss absorption capacity. This is not our base case. Upside potential for the ratings is limited given the operating environment.
SUPPORT RATING AND SUPPORT RATING FLOOR
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.
SENIOR DEBT
Ratings on the senior debt will change in line with the bank’s IDRs.
The rating actions are as follows:
Long-Term IDR affirmed at ‘B+’; Outlook Negative
Short-Term IDR affirmed at ‘B’
Viability Rating affirmed at ‘b+’
National Long-Term Rating: affirmed at ‘AA-(nga)’
National Short-Term Rating affirmed at ‘F1+(nga)’
Support Rating affirmed at ‘5’
Support Rating Floor affirmed at ‘NF’
Long-term senior unsecured debt issues affirmed at ‘B+’/’RR4’
Short-term senior unsecured debt affirmed at ‘B’
By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has unveiled the fourth edition of its Foreign Exchange Manual as part of efforts to deepen liquidity, improve transparency and strengthen confidence in the country’s foreign exchange market.
Speaking at the launch of the revised manual in Abuja on Friday, the Governor of the apex bank, Mr Yemi Cardoso, said the document will take effect from June 1, 2026.
He said it was developed after extensive consultations with banks, exporters, importers, corporates, regulators and development partners.
He said the new framework reflects the apex bank’s commitment to modernising the country’s foreign exchange administration in line with international best practices.
Mr Cardoso described the foreign exchange market as a critical pillar of any open economy, noting that effective governance of the sector is essential for sustaining macroeconomic stability and investor confidence.
“Foreign exchange is more than a financial instrument. It anchors price stability, facilitates the flow of goods and capital, and shapes investor sentiment,” he said.
The CBN governor stressed that the revised manual became necessary due to changing global economic realities, domestic reforms and the need for a more coherent and forward-looking regulatory framework.
According to him, the last edition of the FX manual was issued in 2018, making the latest review both timely and necessary.
Mr Cardoso disclosed that Nigeria’s foreign exchange market has witnessed significant improvement in liquidity since the current administration began reforms in the sector.
He added that daily turnover in the FX market increased from an average of about $100 million in the early days of the administration to between $400 million and $600 million daily.
The CBN Governor added that the market had also recorded transactions of up to $1 billion per day on several occasions in recent months.
“We have gone from a situation where it was more or less a one-way market, where the central bank came in, intervened and went away, to a much more dynamic market,” he stated.
The apex bank boss noted that the reforms were gradually restoring confidence among investors and market participants, encouraging freer entry and exit in the market without unnecessary restrictions.
He also maintained that the nation’s foreign reserves should not be used as the primary tool for funding the foreign exchange market.
“Reserves are reserves. They are not what you look to fund a market,” he said.
The CBN Governor assured stakeholders that the revised manual would be distributed free of charge to authorised dealers while the bank strengthens monitoring mechanisms to ensure compliance, fairness and accountability across the foreign exchange market.
On his part, the Deputy Governor for Economic Policy, Mr Muhammad Abdullahi, said the review formed part of broader reforms initiated by Mr Cardoso to restore confidence, improve transparency and deepen liquidity in the foreign exchange market.
Mr Abdullahi explained that the revised manual introduces several changes aimed at improving ease of doing business and reducing transaction bottlenecks.
Among the notable changes, he noted, are provisions allowing unfettered access to export proceeds, the introduction of non-resident investment accounts and operational guidelines for Pan-African Payment and Settlement System (PAPSS) transactions to support regional trade.
Mr Abdullahi added that the manual also contains new provisions on service exports, revised documentation requirements and updated operational procedures designed to align Nigeria’s FX market with global standards.
He said the apex bank deliberately adopted an ease of doing business approach during the review process to eliminate inefficiencies and ambiguities identified by stakeholders.
“The revised manual is not a stand-alone exercise but part of a broader institutional reform effort designed to strengthen the integrity, credibility and effectiveness of Nigeria’s foreign exchange system,” he said.
By Aduragbemi Omiyale
The Central Bank of Nigeria (CBN) has approved the appointment of Mr Julius Omodayo-Owotuga to the board of First Bank of Nigeria Limited as an executive director.
A statement from the company said the appointment of Mr Omodayo-Owotuga became effective on Wednesday, May 13, 2026.
He was appointed to the board of the subsidiary of First Holdco Plc to further strengthen its leadership capacity across strategic finance, governance, risk management, and institutional transformation.
Before now, he served on the board of First Holdco as a non-executive director between 2021 and 2026.
The appointee brings to the board 24 years of experience spanning banking and financial services, infrastructure finance, power, oil & gas, and audit and consulting.
His appointment, according to the notice to the Nigerian Exchange (NGX) Limited, reflects the Bank’s continued commitment to strong governance, disciplined execution, financial resilience, and sustainable long-term growth.
He most recently served as deputy chief executive of Geregu Power Plc, Nigeria’s first listed power generation company, where he played a pivotal role in institutional transformation, governance strengthening, capital market positioning, operational optimisation, and major financing initiatives, including the company’s landmark listing on NGX.
Mr Omodayo-Owotuga previously served as group executive director, Finance & Risk Management at Forte Oil Plc (now Ardova Plc), where he was instrumental in the company’s financial and operational transformation, leading strategic restructuring, capital raising, treasury optimisation, enterprise risk management, and governance improvement initiatives that strengthened long-term shareholder value.
His professional career also includes roles at Africa Finance Corporation, Standard Chartered Bank, KPMG Professional Services and MBC International Bank (Now First Bank Nigeria Limited), providing him with deep experience in institutional finance, treasury management, financial controls, regulatory engagement, and corporate advisory.
Mr Omodayo-Owotuga is a CFA Charter Holder, KPMG-trained Accountant, and a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN), the Chartered Institute of Taxation of Nigeria (CITN), and the Institute of Credit Administration. He is also a member of the Institute of Directors (IoD) Nigeria and a Certified Management Accountant.
He holds a Doctorate in Business Administration, a Master’s in Business Administration and a Bachelor’s degree in Accounting. He is an alumnus of Saïd Business School, University of Oxford, IE Business School, Geneva Business School, and the University of Lagos.
By Modupe Gbadeyanka
In recognition of its strategic leadership in advancing the growth and resilience of small and medium-sized enterprises (SMEs), Union Bank of Nigeria Plc has been honoured by the Association of Small Business Owners of Nigeria (ASBON).
The lender was rewarded by the group for its suite of solutions designed to enable business expansion and long-term value creation.
At the Nigeria National SME Business Awards, held recently in Lagos, Union Bank was given the Best SME Growth Banking Initiatives Award for 2025.
The ceremony was organised by ASBON in partnership with the Lagos State government through the Ministry of Commerce, Cooperatives, Trade and Investment.
The event convened stakeholders from the public and private sectors to recognise individuals and organisations driving meaningful impact across Nigeria’s SME ecosystem.
Receiving the award on behalf of the bank, its Head of SME Segment, Mr Ayokunnumi Abraham, described the recognition as a strong endorsement of the organisation’s commitment to supporting small and medium-sized businesses.
“We are honoured to receive this recognition, which reflects Union Bank’s continued commitment to helping SMEs grow by making banking simpler, faster, and more accessible.
“Through enhancements to our specialised platforms such as Union360, we have meaningfully reduced the time it takes for businesses to come on board and begin transacting.
“These improvements have shortened onboarding, increased digital adoption among our SME customers, and supported the acquisition of new business clients. Our focus remains on delivering practical solutions that help Nigerian businesses thrive,” he stated.
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