Banking
S&P Affirms First Bank ‘B-/B’ Ratings, Revises Outlook to Stable
By Dipo Olowookere
One of the leading rating agencies in the world, S&P Global Ratings, has revised its outlook on First Bank of Nigeria to stable from negative.
In a statement issued on Wednesday, S&P also revealed that it has affirmed its ‘B-/B’ long- and short-term counterparty credit ratings on top Nigerian lender.
In addition, the rating firm said “we have raised our long-term national scale rating on First Bank to ‘ngBB+’ from ‘ngBB’, while we have affirmed our short-term national scale rating at ‘ngB’.”
“Furthermore, we took the same rating actions on FirstBank’s non-operating holding company (NOHC), FBN Holdings PLC (FBNH),” S&P said.
Explaining the reason for its action, the agency said the rating actions reflect its view that First Bank’s regulatory capital has improved and the risk of breaching regulatory requirements has thus diminished.
In addition, the bank’s funding and liquidity remain a credit strength. Although asset quality remains a weakness, it believes this was stabilizing mainly due to the steadying of the oil price and new management’s efforts.
“We expect First Bank will continue to display weaker asset quality metrics and lower profitability than other rated top-tier banks in Nigeria in 2017 due to continuing high credit costs. That said, we believe that the bank’s new leadership team will address the legacy asset quality issues and institute more prudent risk management measures,” the rating company stated.
According to S&P, cost of risk jumped to 10.4% at year-end 2016 from 5.7% at year-end 2015, and nonperforming loans (NPLs) increased to 24.4% for the same period compared with 18.1% the prior year.
The performance of the bank’s portfolio stems from high concentration and foreign currency loans (51% of total loans in 2016), particularly the oil and gas-related exposures.
This performance and the huge impairments have prompted the bank to recruit a new Chief Risk Officer and launch a review of its risk management process to improve loans approvals, risk monitoring, and collection.
The bank is also in the process of de-risking its loan portfolio by converting some of its vulnerable foreign currency exposures to local currency.
“In our opinion, cost of risk will remain high and above the sector average, but decline to 5.3% over the next 12-18 months, while we think NPLs will drop below 20%. At year-end 2016, the bank restructured 5% of its portfolio, with the oil and gas sector accounting for 70% of the total.
“We expect First Bank to continue to restructure some loans, particularly in the downstream oil, manufacturing, and general commerce sectors in 2017.
“We anticipate that our risk-adjusted capital (RAC) ratio for the bank will decline slightly below 5% in the next 12-18 months. This will result from the bank’s risk asset growth moderately outpacing internal capital generation, based on our assumption of a 20% devaluation of the Nigerian naira (NGN) in 2017 and high credit costs,” the statement said.
On Dec. 31, 2016, FirstBank’s CAR improved to 17.8% from 15.4% on June 30, 2016, following a write back of a capital charge of NGN29 billion ($95 million) for exceeding the related party single obligor limit and an increase in retained earnings.
First Bank raised U.S. dollar funding in 2013 and 2014, which underpins its long dollar position at year-end 2016. The bank’s U.S. dollar-denominated subordinated debt provides a natural hedge to its capital position in the scenario of naira depreciation.
Positively, S&P said it views the bank as well-positioned in Nigeria’s competitive banking sector, thanks to its large retail footprint, low cost of funding, and stable deposit base. On Dec. 31, 2016, First Bank recorded a stable funding ratio of 125%, supported by a high proportion (66%) of deposit funding.
The bank’s foreign currency maturity profile displayed positive gaps at year-end 2016. Net broad liquid assets covered 54% of short-term deposits, comparing well with peers.
However, similar to other banks operating in Nigeria, First Bank’s deposit base is somewhat confidence sensitive, due to its contractually short-term nature.
The ratings on the bank reflect the overall creditworthiness of the First Bank group, whose group credit profile (GCP) it assess at ‘b-‘. The bank is the core component of the group, which is one of the largest in the Nigerian financial services industry, with a significant retail franchise, providing it with a leading deposit franchise and good naira liquidity.
S&P said despite the bank’s high systemic importance, the ratings on First Bank reflect its assessment of the bank’s core group status to the First Bank group and its GCP of ‘b-‘.
“We classify the likelihood of support from the Nigerian government to systemically important banks as uncertain and, as such, we do not factor into the ratings any uplift above the bank’s stand-alone credit profile (SACP).
“Our ratings on First Bank’s holding company FBNH are at the same level as the ratings on First Bank, reflecting the absence of debt at the holding company level. Under our criteria, we generally notch down from the GCP to reflect the structural subordination of the NOHC and its exposure to potential regulatory intervention.
“Nevertheless, in FBNH’s case, we take into account the absence of debt at the holding company level and believe that the risk of the NOHC defaulting is not commensurate with the ‘CCC’ rating category,” the agency said.
S&P said further that the stable outlook on First Bank reflects its view that the bank will maintain its CAR above the minimum requirement of 15% over the next 12 months, despite expectations that risk-weighted asset growth will moderately outpace internal capital generation. It also reflects our view that asset quality will continue to stabilize, although still at weak levels, while the bank will maintain its above average funding and adequate liquidity over the next 12 months.
However, the rating agency warned that, “We could lower the ratings on First Bank if we saw a sharp deterioration of capitalization due to higher risk weights (caused by a devaluation of the Naira) or weaker asset quality due to higher credit losses than anticipated.
“A positive rating action on First Bank would depend on the bank substantially improving its asset quality indicators, while maintaining its capitalization, business position, and funding and liquidity at levels commensurate with a higher rating.”
By Adedapo Adesanya
The Senate has demanded detailed explanation from the Central Bank of Nigeria (CBN) over the alleged non-remittance of N1.44 trillion in operating surplus.
The Senate Committee on Banking, Insurance and Other Financial Institutions, chaired by Mr Tokunbo Abiru, opened its statutory briefing with a firm call for transparency at the apex bank, noting that the Auditor-General’s query on the unremitted funds required a full, clear and documented response, insisting that public trust in monetary governance depended on strict accountability.
While acknowledging the CBN’s achievements in stabilising the foreign exchange market and reducing inflation, Mr Abiru underscored that such progress must be accompanied by institutional responsibility.
He stated the Senate expected the CBN to explain the circumstances surrounding the query, outline corrective steps taken and reveal safeguards against future lapses.
This came as the Governor of the central bank, Mr Yemi Cardoso, appeared before the senate committee and offered an extensive review of economic conditions, asserting that Nigeria was experiencing renewed macroeconomic stability across major indicators.
Mr Cardoso attributed the progress to bold monetary reforms, foreign-exchange liberalisation and disciplined liquidity management implemented since mid-2025.
According to him, headline inflation had declined for seven consecutive months, from 34.6 per cent in November 2024 to 16.05 per cent in October 2025, marking the steepest and longest disinflation trend in over a decade.
Food inflation accruing to him also slowed to 13.12 per cent, supported by improved supply conditions and exchange-rate predictability.
The CBN governor described the foreign-exchange market as fundamentally transformed, adding that speculative attacks and arbitrage opportunities had largely disappeared.
According to him, the premium between the official and parallel markets had fallen to below two per cent, compared to over 60 per cent a year earlier. As of November 26, the naira traded at N1,442.92 per dollar at the Nigerian Foreign Exchange Market, stronger than the N1,551 average recorded in the first half of 2025.
He also announced a sharp rise in external reserves to $46.7 billion, the highest in nearly seven years and sufficient to cover over ten months of imports.
Diaspora remittances, he noted, had tripled to about $600 million monthly, while foreign capital inflows reached $20.98 billion in the first ten months of 2025, 70 per cent higher than in 2024 and more than four times the 2023 figure.
Cardoso further confirmed that the CBN had fully cleared the $7 billion verified FX backlog, restoring investor confidence and strengthening Nigeria’s balance-of-payments position.
On banking-sector stability, he reported that recapitalisation efforts were progressing smoothly. Twenty-seven banks had already raised new capital, with sixteen meeting or surpassing the new regulatory thresholds ahead of the March 31, 2026 deadline, highlighting improvements in ATM cash availability, digital-payments oversight and cybersecurity compliance.
Despite the positive indicators, the Senate sought clarity on several policy decisions.
Mr Abiru pressed for explanations on the sustained 45 per cent Cash Reserve Ratio (CRR), the 75 per cent CRR applied to non-Treasury Single Account public-sector deposits, FX forward settlements, mutilated naira notes in circulation, excessive bank charges, failed electronic transactions and the compliance of CBN subsidiaries with parliamentary oversight.
He also requested an update on the activities of the Financial Services Regulatory Coordinating Committee, arguing that stronger inter-agency cooperation was necessary to maintain public confidence.
The session later moved into a closed-door meeting.
By Modupe Gbadeyanka
About N3.6 trillion has been repaid to the Central Bank of Nigeria (CBN) by the Asset Management Corporation of Nigeria (AMCON) since its inception in 2010.
This information was revealed by the chief executive of AMCON, Mr Gbenga Alade, during a media parley to update the press on the activities of the agency.
Mr Alade said at the moment, the organisation still owes the central bank about N3 trillion for toxic assets of banks in the country.
He praised the organisation for its asset recovery drive, stressing that when compared with others across the world, Nigeria has done well.
“It is important to stress that the corporation has done tremendously well, especially when compared to other notable government-owned Asset Management Corporations around the world.
“Based on the balance at purchase, AMCON outperformed other Asset Management Corporations all over the world by achieving over 87 per cent in recoveries despite the unique challenges associated with debt recovery in Nigeria.
“The Malaysian Danaharta, which is adjudged one of the best performing Asset Management Corporation’s, only achieved 58 per cent. The Chinese Asset Management Corporation, despite its stricter laws, achieved just 33 per cent.
“Only the Korean Asset Management Corporation (KAMCO), South Korea, has achieved more recoveries than AMCON, with about 100 per cent. This was due to their brute force with which they chased the obligors.
“Despite KAMCO’s recovery records, the agency is still operational to date with slight realignments in its mandate.
“Other noted Asset Management Corporations that have transitioned into a perpetual institution of the various governments include, China Asset Management Company, Federal Deposit Insurance Corporation (FDIC) USA, and KFW Germany.
“So, gentlemen, without sounding immodest, AMCON has done well, and we will not relent until all the outstanding debts are fully realized,” Mr Alade stated.
On the financial performance of AMCON, he said last year, the firm posted a revenue of N156.25 billion and operating expenses of N29.04 billion, while for the 2025 fiscal year should be a revenue of N215.15 billion and operating expenses of N29.06 billion.
By Modupe Gbadeyanka
One of the non-interest banks in Nigeria, The Alternative Bank (AltBank), has opened a new branch in Effurun, Delta State.
The new office will serve the Edo-Delta region and provide purposeful banking and real financial empowerment for individuals, entrepreneurs, and businesses, a statement from the firm stated.
The lender disclosed that the Effurun branch is a bold move in its mission to reshape banking in Nigeria.
The launch was graced by key dignitaries, including the Ovie of Uvwie Kingdom, Emmanuel Ekemejewa Sideso Abe I; the Chairman of Uvwie Local Government, Anthony O. Ofoni, represented his vice, Andrew Agagbo; and the Special Adviser to the Governor of Delta State on Community Development, Mr Ernest Airoboyi; amongst others.
The Divisional Head for South at The Alternative Bank, Mr Chukwuemeka Agada, emphasised the institution’s commitment to Warri and its surrounding communities.
“By establishing a presence here, we are initiating a transformation in the way banking serves the people of Delta. Our purpose-driven approach ensures that customers’ financial goals are not just met but exceeded,” he stated.
“This branch represents our pledge to empower Warri’s dynamic businesses and families, providing them with the tools to grow without compromise,” Mr Agada added.
“We understand the heartbeat of this community, and we are excited to integrate our bank into the fabric of this dynamic region,” he stated further.
On his part, the representative of the Ovie, Mr Samuel Eshenake, challenged the bank to facilitate development and employment within the Effurun community.
The Regional Head for Edo/Delta at The Alternative Bank, Mr Akanni Owolabi, embraced this challenge, pledging that the bank will work sustainably to drive local commerce.
“At The Alternative Bank, we are committed to being an active partner in the development of Effurun. We see this branch as a catalyst for creating opportunities, driving employment, and supporting the growth of local businesses.
“Our mission is to empower this community, ensuring that every step forward is one of progress, prosperity, and shared success.”
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