Nigerian listed banks have recorded a staggering N3.77 trillion in loan impairment charges from 2023 through the first quarter of 2025, reflecting the challenging macroeconomic environment marked by naira devaluation, high inflation, and rising interest rates.
Loan losses surged from N1.34 trillion in 2023 to N2.13 trillion in 2024, with N297.10 billion already recorded in early 2025.
Despite these losses, banks are showing resilience with some improvement in key risk metrics according to analysis Nairametrics.
For example, Fidelity Bank reported a drop in its non-performing loan (NPL) ratio from 3.5% to 3.0% and a reduced cost of risk from 2.6% to 1.5% in 2024, attributing this to efficient risk management.
Access Holdings also maintained a stable asset quality with a slight NPL improvement to 2.76%, while Zenith Bank highlighted strong portfolio diversification and increased NPL coverage ratio to 223%, indicating more provisions set aside for potential losses.
Among the banks, Zenith Bank incurred the highest loan losses totaling N1.03 trillion over the period, followed by Ecobank Transnational Incorporated (ETI) with N869.5 billion, and First Bank Holdings with N586.94 billion.
Other banks like UBA, GTCO, Access Holdings, Fidelity Bank, Stanbic IBTC, FCMB, and Wema Bank reported lower but still significant impairment charges.
The rise in bad loans is largely driven by Nigeria’s economic volatility, including currency depreciation and inflationary pressures that squeezed corporate earnings and household incomes, increasing debt servicing difficulties.
However, banks are actively managing credit risks through enhanced monitoring and provisioning, which is helping to stabilise their loan portfolios despite the tough conditions.
