Banking
Moody’s Affirms First Bank’s Deposit Ratings, Predicts Drop in NPL Ratio
By Dipo Olowookere
The B2/Not Prime long-term and short-term local currency deposit ratings of First Bank of Nigeria Limited have been affirmed by Moody’s Investors Service.
In a statement issued on Tuesday and obtained by Business Post, the rating agency said it also affirmed the lender’s B3/Not Prime long-term and short-term foreign currency deposit ratings.
At the same time, Moody’s has affirmed the bank’s B2/Not Prime long-term and short-term, local currency and foreign currency Counterparty Risk Ratings (CRR) and its baseline credit assessment (BCA) and adjusted BCA at b3, while changing the outlook on long-term ratings to stable from negative.
Moody’s explained that the affirmation of First Bank’s ratings was driven by the bank’s moderate capital, resilient pre-provision profitability and a stable funding profile. These strengths are counterbalanced by lender’s still high stock of nonperforming loans (NPLs) compared to other large Nigerian banks, reflecting relatively modest progress in reducing its NPLs.
It also noted that the decision to change the outlook to stable from negative reflects Moody’s view that, while NPLs remain elevated, downside risks to asset quality have considerably diminished following remedial steps taken by the bank and should slowly decline going forward.
In particular, Moody’s noted emphasised that First Bank reduced its foreign currency denominated loans and efforts are underway to reduce single-name concentrations, adding that the improving operating environment, especially in relation to oil prices and the bank’s significant exposure to the upstream oil and gas sector, will also help prevent formation of large stocks of new NPLs.
Moody’s said it expects that the bank’s NPL ratio to reduce further, most plausibly at a slow pace over several quarters, as the bank hopes to resolve its current large problematic loans gradually because of the long time it tends to take to foreclose on collateral in Nigeria.
Moody’s said First Bank benefits from its modest capital, with a ratio of tangible common equity to risk weighted assets at 12.2 percent as of December 2017.
The bank’s pre-provision profitability remains resilient at 4.2 percent at year-end 2017, with Moody’s expecting the lender to maintain its solid pre-provision profitability, supported by its high net interest margins and non-interest income that is benefiting from the bank’s growing alternative channels strategy.
In addition, the rating agency assesses the bank’s funding profile as stable, supported by its large stock of liquid assets and moderate reliance on market funding.
However, First Bank’s strengths are moderated by its high NPLs compared to its Nigerian peers (Nigerian large banks). Despite improvements in its NPLs, the gap between the bank’s NPLs at 20.5 percent as of June 2018 and that of its local peers, at an average of 5.6 percent, remains wide.
“The high NPLs reflect the bank’s relatively still large sectoral and single-name concentration risks and its legacy exposure to the oil and gas industry which created high NPLs during the oil price downturn in 2016.
“Also, the bank’s foreign currency loan book remains high at 48 percent of its total loans as of June 2018,” the statement said.
It added that First Bank continues to make progress in improving its asset quality as the NPL ratio reduced to 20.5 percent as of June 2018, from a peak of 24.2 percent at year-end 2016.
Moody’s says it expects the NPL ratio to gradually fall to 12-15 percent range within the next 12-18 months, driven largely by the on-going balance sheet de-risking and a more favourable operating environment, which will help prevent the formation of new impaired loans.
The bank reduced its foreign currency loan book by 36 percent between 2015 and 2017, adjusted for naira devaluation. The better operating environment, including the current high oil prices, will support performance of First Bank’s large exposure to the upstream oil and gas sector because a majority of these exposures have been restructured on assumption of lower oil price.
The rating agency also expects the lender to benefit from its enhanced risk management governance that resulted in tighter controls and better underwriting standards.
“Moody’s expects better risk management processes will improve the quality of FBN’s new loans and reduce concentration risks.
“First Bank’s loan book, which contracted 7 percent between June 2018 and year-end 2017, will also help contain new NPL formation.
“However, Moody’s expects a moderate recovery in loan growth in the next 12-18 months. The bank increased its ratio of provisions to NPLs to 82 percent, which is now in line with global peers,” it said.
The rating agency noted the bank’s improvements in its foreign currency liquidity. By cutting back foreign-currency lending and paying off some its borrowings, saying First Bank will improve the coverage of its foreign currency borrowings by liquid foreign currency assets (cash and bank balances, loans due from banks and securities for trading) to about 2.5x from 1.9x at year-end 2017.
Moody’s stressed that the bank’s ratings could be upgraded if its asset risk metrics continue to improve toward the median of other large Nigerian banks, adding that the ratings could also be upgraded if Nigeria’s sovereign rating is upgraded.
However, it warned that the ratings could be downgraded if there is a deterioration of the bank’s asset quality metrics that would place negative pressure on its earnings and capital buffers.
“A downgrade of Nigeria’s sovereign rating would also exert pressure on the bank’s ratings,” the statement said.
By Adedapo Adesanya
Nigerian-born payments company, Paystack, has announced its entry into the banking sector with the launch of Paystack Microfinance Bank (Paystack MFB) after the acquisition of Ladder Microfinance Bank.
The bank continues Paystack’s push into consumer products and adds a banking layer to its business-focused payment product, coming ten years after the company was founded with the goal of simplifying payments for businesses using modern technology.
In Nigeria alone, the company says its systems process trillions of Naira every month, supporting more than 300,000 businesses and millions of customers. According to Paystack, this growth highlighted a broader need beyond payments, prompting the decision to build a more comprehensive financial offering.
Paystack MFB will begin lending to businesses before expanding to consumers. It will also offer banking-as-a-service (BaaS) products to companies building financial products and treasury management products.
The company explained that while payments are a critical part of the financial journey, businesses and individuals increasingly require a full financial operating system. This includes the ability to store money securely, move funds easily, gain clarity from financial data, and access tools that support long-term growth. Developers, Paystack added, also need reliable, secure, and compliant infrastructure to build new financial solutions efficiently.
To address these needs, Paystack said it has established Paystack Microfinance Bank as a separate and independent entity from Paystack Payments Limited.
The new microfinance bank operates with its own license, governance structure, and product roadmap, although it will work closely with its sister company.
“By adding Paystack MFB to our family of brands, we’re finding the right balance through combining the rapid innovation of a tech-first platform with the stability of traditional banking,” said Ms Amandine Lobelle, Paystack’s chief operating officer.
Last year, it launched its controversial consumer payments app Zap, and now it is taking a step further with the company securing regulatory backing to become a deposit-taking institution. According to a statement, the bank will be guided by the same principles that shaped Paystack’s early success, including reliability, simplicity, transparency, and trust.
Paystack MFB has begun operations with a small group of early members and plans a gradual rollout to more businesses and individuals. The company also announced the opening of a waitlist for interested users and confirmed it is recruiting a dedicated team to help build its long-term banking infrastructure.
By Modupe Gbadeyanka
The Economic and Financial Crimes Commission (EFCC) has helped First Bank of Nigeria to recover the sum of N802.4 million from a suspect, Mr Kingsley Eghosa Ojo, who unlawfully took possession of over N1.3 billion belonging to the bank.
The funds were handed over the financial institution by the Benin Zonal Directorate of the anti-money laundering agency on Monday, January 12, 2026, a statement on Tuesday confirmed.
First Bank approached the EFCC for the recovery of the money through a petition, claiming that the suspect received the money into his account after system glitches.
The commission in its investigation; discovered that the suspect, upon the receipt of the money, transferred a good measure of it to the bank accounts of his mother, Mrs Itohan Ojo and that of his sister, Ms Edith Okoro Osaretin, and committed part of the money to completion of his building project and the funding of a new flamboyant lifestyle.
With the recovery of the money from the identified bank accounts, the EFCC handed it over in drafts to First Bank.
While handing over the lender, the acting Director for the Directorate, Mr Sa’ad Hanafi Sa’ad, stressed his organisation would continue to discharge its mandate effectively in the overall interests of society.
“The EFCC Establishment Act empowers us to trace and recover proceeds of crime and restitute the victim. In this case, First Bank was the victim and that is exactly what we have done.
“We will continue to discharge our duties to ensure that fraudsters do not benefit from fraud and that economic and financial crimes are nipped in the bud,” he said.
In his response, the Business Manager for First Bank in Benin City, Mr Olalere Sunday Ajayi, who received the drafts on behalf of the bank, commended the EFCC for the swiftness and the professionalism it brought to bear in the handling of the matter and expressed the bank’s gratitude to the commission.
He described the EFCC as one of Nigeria’s most effective and reliable institutions.
Meanwhile, Mr Kingsley and all other suspects in the matter have been charged to court for stealing by the EFCC.
By Henry Obiekea
Nigeria is at a defining moment in 2026. After several years of bold macroeconomic adjustments, including foreign exchange unification and structural reforms, the country is moving from stabilization into expansion. With the Central Bank of Nigeria restoring confidence in the Naira and foreign reserves reaching a five-year high of over 45 billion dollars, the next phase of growth will be shaped by how effectively Nigerians can participate in the formal financial system.
Technology-enabled banking is playing a critical role in this transition. Commercial banks remain the backbone of the system, providing balance sheet strength, regulatory depth, and long-term capital essential for national development. Yet in a country of over 220 million people, physical access alone cannot deliver financial inclusion at scale.
Mobile-first and digitally delivered financial services are bridging this gap. By extending regulated banking beyond physical locations into everyday devices, licensed microfinance banks and other regulated institutions are bringing millions of Nigerians into the formal economy. This approach helped push formal financial inclusion to over 64 percent in 2025, ensuring the last mile is no longer excluded.
Achieving the Federal Government’s target of a one trillion dollar GDP by 2036 requires efficient capital flow. In the first quarter of 2025 alone, Nigeria recorded over 295 trillion naira in electronic payment transactions. Faster, secure financial infrastructure supports modern commerce, strengthens trade, and improves overall economic productivity.
Micro, small, and medium-scale enterprises, which contribute nearly 48 percent of GDP, are central to this growth. Technology-driven banking models are helping to close long-standing credit gaps. By responsibly using alternative data to assess risk, small-ticket working capital loans provide the “pocket capital” businesses need to grow. This builds a pipeline of enterprises that can mature into larger corporate clients within the broader banking ecosystem.
Digitally delivered financial services also strengthen public revenue mobilisation. Increased transaction transparency supports a broader tax net and contributes directly to government revenues through stamp duty, reinforcing fiscal sustainability.
This evolution is supported by a maturing regulatory environment. The Central Bank of Nigeria’s Open Banking framework, rolling out in phases from early 2026, ensures that all regulated institutions operate under consistent oversight. Secure data sharing standards mean customers’ financial histories can move with them across institutions, strengthening trust and accountability.
At FairMoney Microfinance Bank, we see this framework as a social contract. Knowing that deposits are protected by NDIC insurance and supported by clear dispute resolution mechanisms gives customers the confidence to participate actively in the economy.
The future of Nigerian banking is defined by structural harmony. Traditional banks provide depth and stability, while technology-enabled institutions provide reach, speed, and accessibility. Together, they turn financial access into economic resilience.
By working in alignment, we can ensure every Nigerian, from the Lagos professional to the rural trader, is equipped to contribute meaningfully to our shared one trillion dollar future.
Henry Obiekea is the Managing Director of FairMoney Microfinance Bank
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