10 Nigerian Banks Declare N1.99 Trillion in Loan Impairment Charges Amid Regulatory and Macro-Economic Pressures

Ten leading deposit money banks in Nigeria have recorded a combined N1.99 trillion in loan impairment charges for the first nine months of 2025, marking a 44.5% increase compared to N1.37 trillion in the same period of 2024. This surge reflects both the challenges of the current macro-economic environment and compliance with the Central Bank of Nigeria’s (CBN) regulatory forbearance requirements.

The banks involved include Access Holdings Plc, Guaranty Trust Holdings Plc (GTCO), First Holdings Plc, Zenith Bank Plc, United Bank for Africa Plc (UBA), Ecobank Transnational Incorporated, Wema Bank Plc, Fidelity Bank Plc, Stanbic IBTC Holdings Plc, and Sterling Financial Holdings Company Plc.

Loan impairment charges, also known as credit or loan losses, represent provisions set aside by banks to cover potential defaults and declines in the value of financial assets. These provisions reflect the risks of lending in a volatile economy characterized by inflation, naira depreciation, and limited liquidity for both consumers and businesses.

Profitability Despite Higher Provisions

Analysis of the banks’ unaudited financial results for the nine months ended September 30, 2025, shows a combined profit before tax of N5.5 trillion, a modest 3.2% increase from N5.3 trillion during the same period in 2024.

Zenith Bank, Ecobank, and Access Holdings led the rise in loan impairment charges. Zenith Bank reported N781.5 billion in charges, a 64% increase from N477.77 billion in 2024. Ecobank posted N393.68 billion, up 47.4% from N267.13 billion, while Access Holdings recorded a 141.5% rise to N349.99 billion from N144.95 billion.

Zenith Bank’s Group Managing Director and CEO, Dr. Adaora Umeoji, stated that despite elevated provisioning due to the CBN’s industry-wide forbearance unwind, the bank’s asset quality improved, and its balance sheet remains strong, liquid, and well-positioned to capture emerging market opportunities. Zenith Bank’s actual provisioned loans totaled N830 billion, partially offset by recoveries.

Ecobank’s increase was largely driven by challenging conditions in Nigeria and Ghana, where inflation and foreign exchange volatility affected loan quality. Of its provisioned loans amounting to N530.3 billion, recoveries of N185.6 billion reduced the total impairment charges to N393.7 billion.

Access Holdings disclosed that about N255 billion of its impaired loans were corporate loans, with the remainder held by individual borrowers. The bank also reported a sharp rise in third-quarter provisions, signaling proactive compliance with CBN forbearance requirements.

Regulatory Compliance and Forbearance Impact

Analysts have linked the rise in impairment charges at Zenith Bank and Access Holdings to regulatory compliance with the CBN’s forbearance package. The CBN has gradually begun unwinding its pandemic-era forbearance measures, which previously allowed banks to restructure exposures and defer classifying non-performing loans.

A June 2025 CBN circular barred affected banks from paying dividends, bonuses, or investing in foreign subsidiaries until compliance with Single Obligor Limit (SOL) and other credit requirements was achieved. Ahead of the full unwind in March 2026, at least eight banks have reportedly met the required forbearance standards.

Zenith Bank’s company secretary, Michael Otu, confirmed that the bank exceeded the new N500 billion regulatory capital requirement. He added that the bank’s exposure under the SOL forbearance relates only to a single obligor, with all forbearance arrangements expected to end by mid-2025.

The rise in loan impairment charges is also connected to macro-economic challenges in Nigeria and Sub-Saharan Africa and the banks’ need to maintain compliance with the CBN’s loan-to-deposit ratio of 65%. Interim dividend payouts have been affected, although some banks have used the opportunity to clean up their balance sheets and pay shareholders.

Investment banking firm Renaissance Capital Africa reported that six banks hold approximately $3.52 billion in forbearance loans, with individual exposures estimated at $304 million for Access Holdings, $887 million for First Holdings, $282 million for UBA, and $1.6 billion for Zenith Bank.

Investment banker Tajudeen Olayinka noted that the high loan impairment charges were expected, given the June 2025 CBN forbearance deadline. He explained that some banks will spread provisions over time, impacting interim dividend payments to shareholders.