Banking
S&P Affirms Fidelity Bank Ratings, Raises Concerns on High Loan Concentration
By Dipo Olowookere
One of the top rating agencies in the world, S&P Global Ratings, has announced affirming its ‘B-‘ long-term and ‘B’ short-term issuer credit ratings on Nigeria-based tier-two lender, Fidelity Bank Plc with a stable outlook.
In a statement issued last Friday and obtained by Business Post, the rating company said it was also affirming its ‘ngBB+/ngB’ Nigeria national scale ratings on the bank.
S&P explained that the affirmation reflects its view that the bank will display relatively moderate earnings compared with the sector average, as demonstrated in 2017, and relatively stable asset quality amid a slow economic recovery in Nigeria.
It noted that although an improvement in systemwide US Dollar liquidity–due to higher oil prices and increased oil and gas production–has eased the pressure on Nigeria’s manufacturing and trade sectors, some corporate entities still suffer from the effects of the foreign currency shortages over the past 24 months.
S&P stressed that the ratings reflect the lender’s modest size and position in the Nigerian banking sector, characterized by a high cost base and sizable funding costs, which have constrained it from competing with certain top-tier banks in terms of profitability.
Fidelity Bank’s regulatory capital adequacy ratio (CAR) declined to 16 percent at year-end 2017 from 17.2 percent in 2016, compared with the regulatory minimum of 15 percent. This was attributable to N15.2 billion (about $45.6 million) charge on capital for exceeding its single-obligor limit, and the amortization of its subordinated local bond.
The rating firm said it expects the single-obligor charge to drop over the next 12 months as the exposure is settled, and that the bank’s CAR will remain above the minimum requirement of 15 percent.
“We project that Fidelity Bank’s risk-adjusted capital (RAC) ratio before adjustments for diversification will decline to below 5 percent and range between 4 percent and 5 percent over the next 12-18 months, compared with 5.2 percent at year-end 2017,” the statement said.
The bank’s initial application of International Financial Reporting Standard (IFRS) No. 9 resulted in a N28 billion reduction in total adjusted capital as of March 31, 2018.
“Our projected RAC ratio takes into account our expectation of low double-digit loan growth, measured underwriting standards, and a naira depreciation, combined with the necessity for growth to counterbalance the decline in government securities.
“We also anticipate good fee and commission revenue generation (supported by the bank’s digitalization strategy) and a cost-to-income ratio of around 70 percent.
“Over the next 12-18 months, we forecast that the bank’s cost of risk will be higher than historical levels, at around the 1.5 percent posted at year end-2017, as it implements IFRS 9,” it added.
As of March 31, 2018, Fidelity Bank’s nonperforming loans (NPL) had declined to 6.3 percent of gross loans from 6.6 percent in 2016, while loan loss reserves accounted for a higher 110 percent of gross loans compared with 51 percent at year-end 2016.
The lower NPL ratio is mainly attributable to debt reduction in the upstream oil and gas sector, which the rating agency expects will continue over the next 12 months, while the higher coverage was due to the initial IFRS 9 application.
S&P said looking ahead, despite the higher expected coverage ratios, the bank’s high loan concentration and foreign currency exposures remain a concern; at year-end 2017, pointing out that the top 20 loans accounted for 59 percent of total loans and foreign currency lending for about 46 percent.
“Nonetheless, we see as positive that foreign-currency denominated loans are typically backed by receivables in the same foreign currency.
“Notwithstanding the relatively high cost of funding, the bank benefits from a stable funding base and adequate liquidity buffers, which compare well with peers’.
On December 31, 2017, the bank’s stable funding ratio was 112 percent and liquid assets covered short-term wholesale funding 6.9x.
“However, similar to other banks operating in Nigeria, Fidelity Bank’s deposit base is confidence sensitive, due to its contractually short-term nature.
“The stable outlook reflects our expectation that the bank will maintain its prudent underwriting standards, its CAR above the minimum regulatory requirement despite the IFRS 9 implementation, and adequate liquidity over the next 12 months,” it said.
S&P stressed that it could lower the ratings over the next 12 months if asset quality deteriorates by more than the sector average, and concentration risk materializes through a default of large exposures, adding that a positive rating action is unlikely in the next 12 months and would require a material improvement in macroeconomic conditions, coupled with stronger capitalization than it currently expects, with the RAC ratio sustainably exceeding 7 percent.
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.
