Eight Nigerian banks collectively recorded N156 billion in impairment charges for credit and financial assets in the first quarter of 2025, according to an analysis of their unaudited financial statements filed with the Nigerian Exchange Limited (NGX). These provisions, covering potential loan defaults and asset value declines, reflect the challenges of Nigeria’s volatile economic environment, marked by inflation, naira depreciation, and strained liquidity for consumers and businesses.
Bank-by-Bank Breakdown
Zenith Bank led with N49.38 billion in impairment charges, down 11.8% from N55.97 billion in Q1 2024, driven by improved asset quality and recovery efforts. Loans and advances accounted for N35.95 billion, with investment securities, treasury bills, and other assets contributing smaller amounts. Zenith’s profit after tax grew 20.7% to N311.83 billion.
First HoldCo reported N37.25 billion, an 11.2% decrease from N41.93 billion, primarily due to N41.23 billion in loan provisions, offset by minor reversals. Profit after tax fell to N171.10 billion from N208.11 billion.
Access Holdings recorded N21.77 billion, a 4.5% drop from N22.79 billion, reflecting tighter risk management. Profit after tax rose 14.7% to N182.75 billion.
United Bank for Africa (UBA) saw a 332.2% surge to N14.18 billion from N3.28 billion, driven by N11.12 billion in loan provisions and N3.06 billion for other assets, yet profit after tax grew 33.1% to N189.84 billion.
Guaranty Trust Holding Company (GTCO) posted N13.42 billion, nearly flat from N13.49 billion, with N14.56 billion for Stage 3 loans offset by recoveries. Profit after tax dropped 43.6% to N258.03 billion.
FCMB reported N9.52 billion, down 59.9% from N23.71 billion, aided by N4.11 billion in recoveries. Profit after tax rose to N32.23 billion.
Fidelity Bank saw a 285.8% increase to N8.66 billion, reflecting broader asset write-downs.
Wema Bank recorded N1.82 billion, up 64.7% from N1.10 billion, driven by rising loan and asset provisions.
Economic Context
The impairment charges highlight the impact of macroeconomic pressures, including naira volatility and inflation, on banks’ portfolios. While some banks like FCMB and Access benefited from recoveries and risk management, others like UBA and Fidelity faced heightened risks, underscoring the need for robust credit strategies as the Central Bank of Nigeria’s recapitalization deadline looms.
