Big Banks, Bigger Hits: Q1 2025 Sees N156bn in Credit Damage

Eight Nigerian banks incurred a combined N156bn in impairment charges on credit and financial assets in Q1 2025.

These charges reflect provisions to cover potential defaults and deterioration in the value of assets amid inflation, naira depreciation, and liquidity constraints.

Zenith Bank recorded the highest charge at N49.38bn—down from N55.97bn in Q1 2024—with loans and advances contributing N35.95bn.

First HoldCo followed with N37.25bn, driven by loan provisions and some reversals. Access Holdings posted N21.77bn, a 4.5% decline from the prior year.

Guaranty Trust Holding Company recorded N13.42bn, a marginal drop, while United Bank for Africa saw a 332.2% increase to N14.18bn.

FCMB posted N9.52bn, down from N23.71bn, largely due to loan recoveries. Fidelity Bank recorded N8.66bn, up from N2.25bn. Wema Bank incurred N1.82bn.

The collective N156bn marks a 5.2% drop from the revised Q1 2024 figure of N164.53bn, highlighting varied credit risk strategies.

Charles Sanni, CEO of Cowry Treasurers, said banks’ approaches to impairment reflect their risk appetite and recovery efforts. He added that loan volumes have risen in response to inflation, especially in capital-intensive sectors like manufacturing and oil and gas.