Fitch: FX Liquidity Rebound Eases $1.7bn Eurobond Refinancing Risk for Nigerian Banks

Nume Ekeghe

Fitch Ratings has said Nigerian banks are better positioned to meet about $1.7 billion in Eurobond maturities and callable instruments due in 2026, citing a marked improvement in foreign-currency liquidity and stronger external buffers that have reduced refinancing risks. 

In its latest assessment, the rating agency said robust foreign exchange inflows and policy reforms in the FX market have strengthened the sector’s liquidity profile, giving lenders greater flexibility to redeem maturing obligations without necessarily returning to the international capital markets. 

Fitch noted that the naira devaluation of 2023–2024, alongside reforms aimed at eliminating distortions in the FX market, triggered a surge in foreign exchange trading volumes. The reforms, it said, improved importers’ direct access to FX and reduced their dependence on banks for dollar funding.

It stated: “The naira devaluation in 2023–2024 and reforms to reduce market distortions led to higher foreign-exchange market volumes, improving Nigerian importers’ access to FC and reducing their reliance on the banking sector for FC financing. Nigeria’s gross foreign reserves reached $46.3 billion at end-January 2026 in the wake of the reforms, up from a low of $32.2 billion in April 2024. This has helped the Central Bank of Nigeria to clear its backlog of overdue verified foreign-exchange forwards and settle many of the foreign-exchange swaps it has with local banks. 

“Against this background, Nigerian banks have been able to pay down their correspondent banking lines and rebuild their placements at foreign banks. The banking sector has returned to a substantial net foreign asset position, reaching $11 billion at end-3Q25 from a net foreign liability position of $2.6 billion at end-2022. There has also been a corresponding improvement in FC liquidity coverage metrics. 

“Access Bank also has an $500 million additional Tier 1 instrument that becomes callable in October 2026. The instrument is large, equivalent to 7.6 per cent of bank-solo risk-weighted assets as of end-3Q25. Access Bank’s bank-solo capital adequacy ratio (CAR) of 16.5 per cent at end-3Q25 (excluding unaudited 3Q25 profit) was also only slightly above the minimum regulatory requirement of 15 per cent. However, Access Bank has since raised Tier 2 capital and plans to further strengthen its bank-solo CAR ahead of the initial call date through internal capital generation and the optimisation of risk-weighted assets. 

“Ecobank Nigeria Limited completed two tender offers in 2025, redeeming a combined $245 million of its $300 million senior unsecured bond ahead of its 16 February 2026 maturity date. It repaid the remaining $55 million on maturity. The bank’s FC liquidity is very tight by domestic standards, but Fitch views it as sufficient to continue servicing the bank’s FC liabilities (mainly deposits). The bank’s Long-Term Issuer Default Rating of ‘CCC’ and Viability Rating of ‘f’ also capture Ecobank Nigeria’s prolonged breach of the minimum CAR requirement and reliance on regulatory forbearance relating to the classification and provisioning of problem loans and single-obligor limit breaches.”