S&P Global has reaffirmed the credit stability of nine leading Nigerian banks, maintaining a steady outlook for 2025 despite prevailing economic pressures and credit risks.
The banks assessed include Access Bank, First Bank of Nigeria, Fidelity Bank, First City Monument Bank(FCMB), Guaranty Trust Bank(GTB), Stanbic IBTC Bank, Standard Chartered Bank Nigeria, United Bank for Africa, and Zenith Bank. Ecobank, however, received a CCC negative rating, signaling a heightened credit risk and limited debt repayment capacity.
In November 2024, Fitch, a global credit rating agency, assigned Nigeria a B- rating, citing government reforms, a liquid domestic debt market, and substantial oil and gas reserves as positive indicators. However, this rating remains constrained by challenges such as weak foreign exchange reserves, high inflation, security concerns, rising interest rates, and low non-oil revenue.
A B- rating reflects a higher risk of debt repayment difficulties, making international borrowing more expensive for Nigeria. Given that these banks primarily operate within the country, their financial standing is closely linked to thegovernment’s creditworthiness.
S&P Global historically refrains from rating Nigerian financial institutions above the country’s sovereign ratings of B-/B for global foreign currency and ngBBB+/ngA-2 on the national scale. The agency notes that “sovereign stress would have a direct impact on banks’ operations and creditworthiness.”
Despite Nigeria’s sovereign rating, S&P Global’s 2025 outlook ranked most of these banks one to two points higher, highlighting their ability to navigate economic uncertainties. This assessment underscores the resilience demonstrated by Nigerian banks throughout the 2024 fiscal year, suggesting a level of financial stability amid broader economic volatility.
With economic headwinds persisting, these banks’ ability to maintain a stable credit outlook will depend on factors such as monetary policies, inflation control, and government-led financial reforms.
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2 replies on “Nigerian Banks Maintain Stable Credit Outlook Amid Economic Challenges”
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