Banking
Moody’s Sees Vulnerabilities in This Tier Two Bank’s Asset Quality
**Says GTBank, Zenith Bank Strong to Withstand Shocks
By Modupe Gbadeyanka
Moody’s Investors Service has announced the downward review of the outlook of Sterling Bank Plc to negative from stable following the negative outlook on Nigeria’s government issuer rating.
In a statement issued this month, the rating agency said the lowering of Nigeria’s rating affects the bank’s credit profile as well as resulting in a lower ability to support the b3 BCA, which it said reflects Sterling Bank’s vulnerabilities in asset quality because of high single-name and sector concentration risks.
According to Moody’s, the lender has a large exposure to government debt securities and loans at 275 percent of its tangible common equity as of June 2019, noting that the company will likely be more exposed to negative pressure on its revenue generation capacity and its asset risk than its top-tier local peers due to its relatively small size and client base.
It was further stated that the b3 BCA shows bank’s modest capital levels, especially in light of high asset risks and high foreign-currency loans, stressing that these challenges are balanced against its deposit-based funding profile and stable local-currency liquidity, stating that the “local currency deposit rating is B2 while the local currency national scale rating is A2.ng.”
Also, commenting on other banks, Moody’s said Union Bank of Nigeria, FCMB and Fidelity Bank will likely be more exposed to negative pressure on their revenue generation capacity and asset quality than their top-tier local peers due to its relatively small size and client base.
For Union Bank, it said the b3 BCA reflects its high asset risks and low coverage of NPLs by provisions, which increases the risk of capital erosion in case of loan losses.
It further said this shows weak efficiency and moderate profitability; and still-tight, although improving, foreign-currency funding position, saying these challenges are moderated by the company’s stable deposit-based funding profile, particularly in local currency.
On the part of FCMB, it was stated that the b3 BCA reflects its elevated credit risks stemming from high single-name and sector concentrations; and relatively modest profitability levels compared with those of its top-tier local peers, noting that these challenges are balanced against its robust levels of tangible common equity compared with that of its global peers, stable deposit-based funding structure, and robust local-currency liquidity buffers.
For Fidelity Bank, the rating firm said the b3 BCA shows the lender’s relatively tight funding conditions, as reflected by its high, although improving, loan-to-customer deposit ratio; and high proportion of foreign-currency loans.
It said these challenges are mitigated by the lender’s relatively high provision coverage of NPLs; and solid capital buffers with a tangible common equity-to-risk-weighted asset that is comparable to global peers, although the bank’s capital buffer against the regulatory requirement is small.
But for Guaranty Trust Bank, Moody’s said b2 BCA reflects its resilient earnings generation capacity and robust capital buffers; high liquidity buffers and its predominantly deposit funded balance sheet; and robust franchise, which allows the bank to earn relatively higher margins and relatively low credit costs.
Also, it said Zenith Bank’s BCA of b2 reflects its resilient earnings generating capacity and robust capital buffers, which together provide a buffer to withstand asset-quality deterioration; high liquidity buffers and a predominantly deposit-funded balance sheet; and robust franchise, which allows it to attract inexpensive deposits, relative to other Nigerian banks, adding that “These strengths are moderated by the bank’s high proportion of more confidence-sensitive corporate deposits versus retail deposit.”
For UBA, it stated that the b2 BCA shows moderate asset risk profile, supported by its relatively more diversified loan book than that of its local peers; resilient profitability, which supports its capital buffers; and predominantly deposit-funded balance sheet, which is supported by a solid pan-African franchise, and strong local-currency liquidity buffers.
“These strengths are counterbalanced by UBA’s rising, although still moderate, dependence on confidence-sensitive funding,” the statement from Moody’s said.
Commenting on the b3 BCA of First Bank, the rating agency said it reflects the lender’s still-high stock of NPLs, although reducing, and moderate capital buffers, emphasising that these challenges are moderated by the bank’s resilient pre-provision profitability and stable funding profile, which is supported by a large stock of liquid assets.
By Modupe Gbadeyanka
About N2 billion is expected to be used to finance renewable energy products for customers by the end of 2026 in an effort to accelerate Nigeria’s clean energy transition.
To meet this goal, Sterling Bank is launching Sterling Solar Financing Hubs inside StarTimes retail outlets to embed on-the-spot solar financing at the point of purchase.
From the N2 billion earmarked for this initiative, N600 million has already been used up.
Under this programme, customers can now walk into participating outlets, select their preferred solar solution, receive financial guidance from dedicated Sterling Solar Financing Advisors, and begin the financing process immediately, subject to the bank’s credit assessment.
The first phase of the rollout commenced this July with five Solar Financing Hubs across Lagos, located in Lekki, Ikeja, Festac, Surulere, and Victoria Island.
The network will expand rapidly to 46 StarTimes outlets nationwide before the end of the third quarter of 2026, with a view to extending the model to more than 200 StarTimes locations nationwide.
Both parties have promised to continue working together to democratise access to clean energy financing, empowering more Nigerians to solarise their homes and businesses while contributing to a greener future.
“Sterling exists to enrich lives, and we believe that access to clean, reliable energy should be within everyone’s reach. Through this partnership with StarTimes, we are democratising access to solar by bringing financing directly to the point of need, enabling more families and businesses to transition to sustainable energy without the burden of prohibitive upfront costs. This is about unlocking opportunity, improving livelihoods, and powering Nigeria’s future,” the Divisional Head of Renewable Energy and Mobility at Sterling Bank, Mr Darlington Nwankwo, said.
Also commenting, the Vice President of StarTimes Nigeria, Mr Eric Xiao, said, “With the rollout of the Sterling Solar Financing Hubs, we are doing more than just selling solar products; we are building a sustainable energy ecosystem. By integrating StarTimes’ extensive service network with Sterling Bank’s professional financial services, we are significantly lowering the barrier for Nigerian households and small businesses to access clean energy.
“Moving forward, we will continue to deepen this partnership, ensuring that more Nigerians can enjoy reliable, affordable, and smart energy solutions, ultimately turning our vision of energy accessibility into a reality for all.”
By Modupe Gbadeyanka
The Nigeria Business Summit Regional Tour of Stanbic IBTC Bank made a detour to Jogor Centre, Ibadan, Oyo State, on Wednesday, July 15, 2026, to empower Micro, Small, and Medium Enterprises (MSMEs).
The event brought together business leaders, development partners and government representatives to discuss pathways for sustainable enterprise development across the South-West.
Participants engaged in practical masterclasses on export opportunities; access to finance and business growth strategies; gaining actionable insights into market expansion; trade documentation; credit readiness; financial record-keeping; and structured financing solutions designed to support long-term business success.
The Head of Enterprise Banking at Stanbic IBTC Bank, Ms Olajumoke Bello, informed participants that the programme is part of the lender’s commitments to supporting MSMEs through practical business education, strategic partnerships and improved access to growth opportunities.
The Executive Director of Business and Commercial Banking at Stanbic IBTC Bank, Mr Remy Osuagwu, on his part, said, “Our ambition is to be more than a financial institution to Nigerian businesses. We want to be a trusted growth partner, providing the financing, business insights and advisory support entrepreneurs need to build sustainable enterprises and unlock new opportunities.”
Similarly, the chief executive of Stanbic IBTC Bank, Mr Wole Adeniyi, who reinforced the company’s commitment to enterprise development, highlighted the importance of providing businesses with the right support structures to enable sustainable growth and long-term competitiveness.
“At Stanbic IBTC, we believe that sustainable economic growth depends on the success of small and growing businesses. That is why we are focused on providing access to finance, practical advisory support and the connections businesses need to move from ambition to scale,” he stated.
The Oyo State Commissioner for Investment, Trade, Cooperatives, and Industry, Professor Soliu Adelabu, said the initiative was designed to support businesses and strengthen the state’s entrepreneurship ecosystem, praising the bank for its support for traders, entrepreneurs, and artisans in the state.
The Permanent Secretary in the Oyo State Ministry of Women Affairs and Social Inclusion, Mrs O.M. Shotonwa-Roagess, highlighted the importance of strategic partnerships in expanding economic opportunities for women and vulnerable groups across Oyo State. She noted that the ministry remains open to collaborating with organisations such as Stanbic IBTC, development partners and the private sector to drive financial inclusion, entrepreneurship and sustainable economic empowerment.
The Nigeria Business Summit Regional Tour forms part of Stanbic IBTC’s broader commitment to empowering entrepreneurs through capacity building, financial inclusion and strategic business support, helping enterprises unlock new opportunities for growth and long-term success.
The Ibadan leg built on the momentum of previous tour stops in Katsina and Aba.
By Adedapo Adesanya
The Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, says Nigeria anticipates remittances from citizens living abroad to increase by two-thirds in 2026 as it seeks to bolster its foreign-exchange reserves to $1 billion monthly.
“We are expecting that by the end of the year, we will hit about a billion Dollars a month from diaspora remittances,” he said at the 14th Annual BusinessDay CEO Forum in Lagos on Thursday, themed From Stability to Shared Prosperity.
Mr Cardoso said remittances are expected to be boosted from more than $600 million currently, banking on the CBN’s deliberate target at remittances to diversify reserve sources beyond oil earnings.
According to him, the apex bank engaged Nigerians abroad, banks and international partners to identify barriers to official remittance flows.
He said the lender subsequently reviewed policies to ensure easier movement of funds into and out of the country.
Mr Cardoso described the approach as providing free entry and free exit for foreign exchange.
He said the reforms helped double diaspora inflows within one year and exceeded initial expectations, also projecting annual remittances could reach about $8 billion if the current momentum was sustained, adding that the development reflected growing confidence in Nigeria’s financial system and foreign exchange market.
Mr Cardoso said reforms introduced by the apex bank had restored stability in the foreign exchange market and improved investors’ confidence.
He identified exchange rate unification as one of the central bank’s major achievements under the reforms programme.
According to him, replacing multiple exchange rate windows with a market-driven system eliminated distortions and improved transparency.
Mr Cardoso said improved foreign exchange liquidity and stronger reserves were among the gains from the reforms.
He said Nigeria’s net external reserves had risen from about $3 billion at the start of the reforms to above $40 billion currently, noting that gross external reserves had grown to about $52 billion, representing about 10 months of import cover.
According to him, the reserves are designed to shield the economy from external shocks and excessive market volatility.
He said the reserves were not meant for routine interventions or day-to-day exchange rate management.
