9 Nigerian banks to retain stable credit outlook in 2025 amid economic headwinds 

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February 5, 2025
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2 min read
CBN building. Image credit: Businesstimes.ng

S&P Global has affirmed the creditworthiness of nine major Nigerian banks, maintaining a stable outlook throughout the year despite concerns about the effects of the country’s credit risks driven by economic pressures

The rated banks include Access Bank, First Bank of Nigeria, Fidelity Bank, First City Monument Bank, Guaranty Trust Bank, Stanbic IBTC Bank, Standard Chartered Bank Nigeria, United Bank for Africa, and Zenith Bank 

Ecobank’s performance was also assessed but it was allotted a CCC negative rating, indicating very high credit risk and a low capacity to repay debts. 

In November 2024, Nigeria was assigned a B- rating, reflecting a positive credit outlook by Fitch, another global credit rating agency, supported by government reforms, a liquid domestic debt market, and large oil and gas reserves. 

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This rating was however constrained by weak net foreign exchange (FX) reserves, high inflation, ongoing security challenges, rising interest rates, and structurally low non-oil revenue. 

While the outlook was positive, a B- rating indicates low creditworthiness based on international standards and highlights that a country has a higher risk of struggling to pay its debts, which makes borrowing more expensive.

Since these banks operate mostly in Nigeria, their financial health is closely tied to the government’s credit rating. 

As such, S&P Global historically doesn’t rate “financial institutions in Nigeria above our ‘B-/B’ global foreign currency and ‘ngBBB+/ngA-2’ national scale sovereign ratings,” because of the effects that “sovereign stress would have on banks' operations and creditworthiness.”

However, the agency’s banking outlook for 2025 rated most of the banks listed one to two points higher than the country’s rating because of banks’ resilient performance through the 2024 fiscal year. 

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“We have a stable outlook on the ratings on most rated banks in Nigeria. The stable outlook largely reflects that on the sovereign ratings,” the rating said. 

It also noted that the banks’ ratings are expected to move in line with the country’s credit score in 2025, adding that an improvement in their credit outlook during the year is unlikely. 

Headline inflation rose steadily throughout 2024, averaging 33.5%, according to S&P Global, and was largely driven by currency depreciation, removal of oil subsidies, and high food inflation. 

Seeking to tame the country's soaring inflation, the Central Bank of Nigeria (CBN) implemented five successive interest rate hikes last year, raising the cost of borrowing and debt repayment. 

While the CBN’s response has solid economic backing, experts argue that addressing fiscal, monetary, and trading policies that exacerbate inflationary pressure is a more effective control measure. 

In its 2025 Macroeconomic Outlook, the Nigerian Economic Summit Group (NESG) noted that lower government spending and increased investments in critical sectors can “support price stability without placing undue reliance on monetary policy measures, such as interest rate hikes, which can have broader economic trade-offs.” 

A versatile and experienced writer who enjoys demystifying complex financial data for easy consumption.
A versatile and experienced writer who enjoys demystifying complex financial data for easy consumption.
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