Banking
Zenith Bank’s Earnings Will Remain Broadly Stable, Upgrade Remote—S&P
By Modupe Gbadeyanka
S&P Global Ratings has disclosed that Zenith Bank will continue to display better asset quality indicators than its domestic peers and sound revenue generation over the next 12-18 months despite the generally slow economic recovery in Nigeria.
The rating agency made this observation while affirming its ‘B’ long-term and ‘B’ short-term issuer credit ratings on the Nigeria-based lender with stable outlook. It also affirmed its national scale ratings on the bank at ‘ngA/ngA-1’.
According to S&P, as of June 30, 2018, Zenith Bank had total assets of N5.3 trillion (approximately $15.3 billion), making it the second-largest bank in Nigeria, pointing out that the financial institution has a strong corporate franchise in the country and has displayed both healthy revenue generation and earnings stability, despite the challenging operating conditions in Nigeria over the past couple of years.
“We assess Zenith’s capital and earnings as moderate. The bank’s S&P Global Ratings’ risk-adjusted capital (RAC) ratio before adjustments reached 5.4 percent at end-2017, compared with 5.1 percent a year earlier.
“We expect this ratio will be 5.2 percent to 5.5 percent over the next 12-18 months. We factor into our RAC calculation our expectations that loan growth will be 3 percent in 2018 and 10 percent in 2019, and that interest margins will show a slight increase (balancing our expectation of a reduction in expensive fixed deposits and redemption of its $500 million Eurobond in April 2019).
“We also consider Zenith Bank’s good fees and commission generation, and its dividend payout ratio of about 50 percent,” the rating company said in the statement released last Thursday.
According to the statement, Zenith Bank’s asset quality metrics improved somewhat in the first half of 2018, with credit costs declining to 0.9 percent and coverage by loan loss reserves increasing to 229 percent (following the implementation of International Financial Reporting Standards (IFRS) 9 and including Stage 1 and Stage 2 provisions).
This compares with credit costs of 4.3 percent and a coverage ratio of 143 percent at year-end 2017. In the six months to June 30, 2018, nonperforming loans (NPLs) declined in absolute terms, but increased in relative terms.
It accounted for 4.9 percent of the loan book, compared with 4.7 percent at year-end 2017. Although restructured exposures increased to around 12.6 percent of total loans at mid-2018, compared with 11.8 percent a year earlier, S&P expects asset quality indicators to remain broadly stable, because it does not anticipate material migrations of these exposures to NPLs.
“We therefore believe that the bank’s cost of risk will stabilize at around 1.2 percent in the next 12-18 months,” it said.
The firm pointed out that Zenith Bank is mainly deposit-funded, which has resulted in a stable funding base.
It recorded a stable funding ratio of 151.4 percent on the back of a healthy proportion of deposit funding at mid-2018. Broad liquid assets covered 1.9x of total wholesale funding and net broad liquid assets accounted for 64.2 percent of short-term customer deposits at the same date. “However, given the short-dated nature of the bank’s deposit profile, which is a feature it shares with its domestic peers, Zenith Bank’s deposit base is confidence-sensitive.
“The stable outlook on Zenith reflects that on Nigeria, and our expectation that the bank’s earnings and asset quality metrics will remain broadly stable over the next 12-18 months.
“We would lower the ratings on the bank if we lowered the ratings on Nigeria, or if we see a material deterioration in the bank’s asset quality indicators.
“An upgrade appears remote in the next 12 months, because it would hinge on an upgrade of Nigeria or a material strengthening of the bank’s capitalization, all other factors remaining equal,” the statement said.
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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