Banking
Moody’s Rates First Bank’s NPL Ratio Credit Negative
By Modupe Gbadeyanka
The non-performing loan (NPL) ratio of First Bank of Nigeria (FBN) Limited has been rated credit negative by Moody’s Investors Service because it requires higher loan-loss provisions that will harm profitability.
Moody’s said in a report on Thursday that, “We expected the bank’s NPL ratio to decline to 15 percent to 17 percent by year-end 2018 and to less than 15 percent this year.
“Although management is confident that a large percentage of these NPLs will be resolved this year, Nigeria’s benign economic environment will likely delay defaulters’ recoveries.”
First Bank, one of the five tier-one lenders in Nigeria, announced in its Q1 2019 earnings through its parent company, FBN Holdings Plc, that its NPL ratio was 25.3 percent of gross loans as of March 2019, and 25.9 percent at year-end 2018, versus 19.8 percent in October 2018.
FBN’s Stage 3 (impaired) loans at year-end were N535 billion (about $1.5 billion), which raised the NPL ratio to its present level, highest among its peers.
According to Moody’s, First Bank’s NPL ratio has been high, averaging around 22.6 percent between 2015 and 2018, indicating a challenging environment.
In addition, the Stage 2 loan, those with a significant deterioration in credit risk were 26 percent of gross loans at year end 2018 because of greater delinquencies.
Assuming there is no loan growth in 2019, and using FBN’s NPL ratio, which is a good proxy for First Bank, the bank would need to cut its stock of Stage 3 loans by about 60 percent to reduce the NPL ratio to below 10 percent, which is its management’s target for 2019. It is worthy to note that slower reduction in NPLs will strain First Bank’s solvency and credit profile.
Moody’s noted that because NPLs are concentrated among a few borrowers, resolution of just a few defaulters would significantly reduce the NPL ratio.
First Bank had substantial provisions of about 82 percent of NPLs as of March 2019, which would allow it to accelerate writing off some of its NPLs.
High NPLs will require First Bank to continue to set aside large loan-loss provisions, which will erode its net profits and reduce the amount it can retain capital.
First Bank’s high loan-loss provisions, which averaged 5.7 percent between 2014 and 2017, are significantly higher than those of its peers, which averaged 1.3 percent over the same period. Management’s 2019 loan-loss provision ratio target is 3 percent to 4 percent.
First Bank’s pre-provision income generation capacity is robust, which enables the bank to absorb these elevated asset risks.
The bank’s ratio of pre-provision income to average assets compares favourably with peers whose average ratio was 3.9 percent between 2014 and 2018.
However, the bank’s ratio of net income to average assets is weaker than its peers, limiting organic capital generation.
By Aduragbemi Omiyale
A collaboration to enable fast money transfers into Nigeria has been entered into between Flutterwave and Xoom, PayPal’s international digital money transfer service.
The partnership allows Xoom transfers to be converted by Flutterwave and settled locally in Naira, enabling quick transfers directly into recipients’ bank accounts at Access Bank, UBA, Zenith Bank, First Bank, GTBank, and additional participating banks across Nigeria.
The deal also enables Xoom’s global network with Flutterwave’s local payout infrastructure, allowing users globally to send funds directly into Nigerian bank accounts with improved speed and efficiency.
Nigeria is the leading remittance recipient in Sub-Saharan Africa, receiving over $20 billion in personal remittances in 2024. Despite this volume, receiving international payments has historically remained complex due to FX constraints and settlement delays. This collaboration helps address those challenges in a market of more than 232 million people, where the ICT sector is projected to contribute 21 per cent of GDP by 2027.
By combining Xoom’s expansive reach with Flutterwave’s local compliance and banking partnerships, the two companies are providing a more accessible financial corridor for the continent.
Xoom, a PayPal service, is a fast and secure international digital money transfer service that enables consumers to send money, pay bills, and reload phones for friends and family in approximately 160 markets globally.
As part of PayPal’s global payments ecosystem, Xoom leverages advanced fraud protection, compliance capabilities, and a trusted global network to help millions of customers move money quickly and securely across borders.
“We’re excited to have been chosen by Xoom for their Nigeria expansion. Millions of Nigerians rely on money from abroad to support everyday needs, whether it’s families receiving help from loved ones, freelancers getting paid for their work, or individuals earning income from the global economy. This helps make it easy and more reliable for people in Nigeria to receive funds and stay connected to opportunities beyond borders,” the chief executive of Flutterwave, Mr Olugbenga GB Agboola, stated.
By Aduragbemi Omiyale
An initiative known as Nigeria Lightning Rounds, designed to expand funding opportunities for Nigerian startups and small businesses by connecting founders with local and international investors, has been launched by ProvidusUnity Bank, in partnership with US-based global venture firm and accelerator, gener8tor.
Scheduled to be held on July 15, 2026, Nigeria Lightning Rounds will feature carefully selected startups engaging with targeted investors who have expressed interest in supporting Nigerian innovation.
Participating founders will have the opportunity to pitch their businesses through focused 15-minute virtual sessions facilitated by gener8tor and ProvidusUnity Bank’s networks.
The program will focus on high-growth sectors including fintech, healthtech, manufacturing, sustainability, and AI, but welcomes SMEs from all industries, with intending participants urged to apply via https://www.gener8tor.com/lightning-rounds/nigeria.
“We recognise that access to capital remains one of the biggest challenges facing entrepreneurs in Nigeria. Through our partnership with gener8tor, we are creating a platform that connects promising Nigerian founders with investors who can provide the support required to scale their businesses,” the Head of Business Development at ProvidusUnity Bank, Mr Ernest Elue, stated.
“The partnership reinforces ProvidusUnity Bank’s commitment to strengthening Nigeria’s entrepreneurial ecosystem by supporting innovation, enabling access to opportunities, and creating pathways for businesses with high-growth potential,” he added.
Also commenting, the Director of Lightning Rounds at gener8tor, Ms Elizabeth Larios, said, “gener8tor is thrilled to partner with ProvidusUnity Bank to extend the Lightning Rounds model into Nigeria.
“This collaboration reflects our commitment to building equitable ecosystems and driving capital to the most promising and underrepresented entrepreneurs.”
Lightning Rounds are a signature initiative of gener8tor’s investment platform, which has facilitated thousands of investor-startup meetings globally. The format is optimised to eliminate friction, reduce bias in early-stage fundraising, and help founders secure capital from investors aligned with their mission and stage. gener8tor’s previous Lightning Rounds for Nigerian Founders in 2025 featured 18 participating Investors and led to 50 investment meetings facilitated.
By Modupe Gbadeyanka
The verification of the depositors of the 46 microfinance banks, whose operating licenses were revoked by the Central Bank of Nigeria (CBN) over a week ago, has commenced.
The exercise, aimed at refunding those whose funds were trapped in the small lenders, is being conducted by the Nigeria Deposit Insurance Corporation (NDIC).
In a statement on Thursday, the agency said its staff members have been positioned at the offices of the affected banks across the country to attend to depositors.
It was disclosed that depositors of the defunct banks, who had their Bank Verification Numbers (BVNs) linked to their accounts in the failed banks, will be paid through their alternative accounts in existing banks.
However, depositors whose BVNs were not linked to their accounts in the failed banks have been encouraged to visit the affected banks’ offices with proof of account ownership, a passport photograph, verifiable means of identification (Driver’s Licence, Permanent Voter’s Card, International Passport or National ID Card) and BVN.
NDIC also stated that depositors can alternatively file their claims online through its website: www.ndic.gov.ng, to complete the Pre-Verification Claims Form by clicking on the Search Bar, and typing Pre-Verification Claims Form; opening the Form and filling in their details. They can also do so by clicking the link: https://ndic.gov.ng/ndic-pre-verification-claims-form/ or by visiting any of the NDIC offices closest to them to file their claims.
For further enquiries, the corporation can be reached on any of the following lines: 09037273810, 09038197064, 08104220807, 09064657140.
