Ecobank eyes global debt raise as Nigerian Banks face mounting pressure

By Philippine Duru

philippineobetoduru@gmail.com

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Nigeria’s banking sector continued to demonstrate resilience in 2025 as leading financial institutions recorded strong earnings growth despite mounting loan impairment provisions and tighter regulatory measures from the Central Bank of Nigeria (CBN).

The sector has maintained steady expansion in income streams, driven largely by higher interest income, increased digital banking transactions, foreign exchange revaluation gains, and broader financial service penetration across the country.

Several tier-one lenders posted impressive financial performances during the year. Ecobank Nigeria, for example, recorded a 30 per cent increase in revenue to N113.7 billion in the first half of 2025, while its profit before tax surged by 90 per cent despite rising impairment charges linked to troubled loans.

Analysts, however, say the industry’s strong earnings have been partly overshadowed by significant provisioning requirements stemming from distressed exposures in the oil and gas sector. The situation has triggered what market observers describe as a “balance sheet reset” across the banking industry.

Reports indicate that Nigerian banks are collectively exposed to about N2.9 trillion in troubled oil and gas-related loans, particularly those associated with indigenous energy firm Nestoil Limited. The development has forced several banks to make substantial impairment provisions in their 2025 financial statements.

United Bank for Africa (UBA) reportedly recorded loan loss provisions of N331 billion, while Access Holdings saw impairment charges on loans and advances jump by 209 per cent to N287.3 billion. Other financial institutions affected by the rising provisions include First HoldCo, FCMB, Ecobank, and Union Bank.

The increasing pressure on banks’ balance sheets has also impacted shareholder returns. In response to the growing risks, the CBN temporarily suspended dividend payments, executive bonuses, and foreign expansion plans for banks operating under regulatory forbearance arrangements.

According to the apex bank, the measures are designed to strengthen capital buffers, improve financial stability, and ensure that lenders fully provide for non-performing loans before distributing profits to investors.