Forbearance Burden: Nine Banks’ N3.24trn Exposure Wipes Out Shareholders’ Dividends

*Access holdings records N1trn profit, impairment charges rise to N523bn

Kayode Tokede

Following tighter provisioning regulations and the Central Bank of Nigeria’s (CBN) move to de-risk industry assets, a total of nine banks have declared N3.2 trillion in loan loss provisions in 2025, with the impact negatively affecting shareholders’ dividend payouts.

This comes as Access Holdings Plc’s audited results for the financial year ended December 31, 2025, released on the Nigerian Exchange Group (NGX) revealed that the financial institution’s profit before tax crossed the N1 trillion mark for the first time to N1.01 trillion. The amount was a 16.2 per cent increase over N867.02 billion reported in the financial year ended December 31, 2024.

However, Access Holdings net impaired charges on financial assets rose to N523 billion in the year under review, from N245 billion in 2024, while total impaired loans rose to N468.04 billion from N368.22 billion. Furthermore, the ratio of impaired loans to gross risk assets declined to 2.68 per cent from 2.76 per cent, indicating that asset growth outpaced the increase in non-performing exposures.

Meanwhile, the total of N3.2 trillion loan loss provisions reported in 2025 was about 40 per cent  increase, compared with the N2.33 trillion recorded in 2024.  
Loan loss provision, which is also referred to as impairment charge, is an expense set aside to cover potential losses from unpaid loan, or a bad loan.

The 2025 financial year presented unique regulatory-driven challenges. A directive by the CBN had required banks to exit the regulatory forbearance loan window and fully align with prudential loan classification standards.
The nine banks whose 2025 audited results were compiled by THISDAY were: Access Holdings Plc, Guaranty Trust Holdings Plc (GTCO), Wema Bank Plc, Stanbic IBTC Holdings Plc, Ecobank Transnational Incorporated (ETI), United Bank for Africa Plc (UBA), and Zenith Bank Plc.

First Holdings Plc and FCMB Group Plc were the only two banks with unaudited financial year statements for the period ended December 31, 2025.
Specifically, in the year under review, Zenith Bank recorded N742.19 billion impairment charges, an increase of 12.97 per cent from the N657 billion in 2024, while First Holdco in its unaudited results posted impairment charges of N748.13 billion in 2025, which was an increase of 75 per cent from the N42.29 billion recorded in 2024.

Equally, as stated previously, Access Holdings declared N523.55 billion net impairment charge on financial assets, which was about a 113 per cent increase over the N245.32 billion recorded in 2024.
Also, UBA declared N331.07 billion impairment charge for credit losses on Loans in 2025, representing an increase of 53 per cent from the N217 billion it reported in 2024.

In the same vein, in its audited results for the full year ended 2025, ETI announced N707.53 billion as impairment charges in 2025, up by 47per cent from the N480.57 billion reported in 2024. FCMB Group declared an N86 billion impairment charge in 2025, which was about 109 per cent increase compared with the N41.24 billion recorded in 2024, while Wema Bank posted about N25.7 billion impairment charge in 2025, representing an increase of 19 per cent from N21.6 billion in 2024.

Nevertheless, among the banks, GTCO and Stanbic IBTC Holdings declared a significant decline in impairment charges in 2025. For instance, while GTCO declared N66.42 billion impairment charges in 2025, representing an increase of 51per cent from N136.66 billion in 2024, while Stanbic IBTC Holdings announced N14.22 billion impairment charges in 2025, a significant drop of  86 per cent when compared to N99.4 billion declared in 2024.

THISDAY checks also showed that the nine banks posted an estimated N6.35 trillion profit before tax in 2025, which was about 3.3 per cent decline over the N6.57 trillion reported in 2024.  
While banks increased their lending partly due to the CBN’s policy on loan-to-deposit ratio (LDR), which is put at 65 per cent, macroeconomic challenges in Nigeria and sub-Saharan African countries where some of the financial institutions have subsidiaries, disrupted economic activities and affected risk assets.

Capital market analysts stated that the growing impairment charges did not come as a surprise given the headwinds in the economy, stressing that banks are battling with rising inflation rate, unstable foreign exchange and hike in interest rate.
The Vice President, Highcap Securities, Mr. David Adnori, said banks operating in Nigeria, and other African countries recordedsignificant increase in impairment losses due to the macroeconomic challenges of 2025 despite the Nigerian economy showing notable signs of recovery and resilience.

According to him, the financial system demonstrated soundness, stability and resilience with the NPL at a modest ratio, stressing that banks have to make provision in case of uncertainties.
Speaking also, Investment Banker and Stockbroker, Mr. Tajudeen Olayinka, stated that the rising cost of risk of banks was a reflection of the weakening fundamentals of the economy.
“The NPL growth in some banks is higher in nominal terms, except that the double-digit growth in the loan book partly masked the effective rise in the NPL ratio,” he added.

 He added that the percentage of stage two loans, which though performing but had shown stress and likelihood of delinquency over the near term, had increased across the industry.
“Therefore, deserving the conservative stance of banks and their auditors to proactively take a higher anticipatory impairment charge on such loans.”

In the meantime, Access Holdings Plc in a statement yesterday, explained that its 2025 full year results marked a significant turning point in its corporate journey as it shifts from a growth model defined by scale to one increasingly anchored on value creation, efficiency, and earnings quality.

Profit After Tax grew to N743.045 billion in 2025, up from the N642.217 billion recorded the previous year.
Net interest income rose to N1.36 trillion, while net fees and commission income recorded a particularly strong growth of 40.9 per cent to N585.1 billion, reflecting increasing diversification in revenue streams.

Overall operating income after impairment grew by 23.9 per cent to N3.17 trillion. At the same time, the Group stated that it improved its cost discipline, with its cost-to-income ratio declining to 51.7 per cent from 56.7 per cent in 2024.
Returns also remained solid, with return on average equity at 18.4 per cent and return on average assets at 1.6 per cent, reinforcing the quality of earnings delivered during the year.

The Group stated that it delivered a resilient performance during the year, navigating a transitional operating environment while demonstrating the strength of its franchise and the robustness of the governance structures it has built over time.
Group Managing Director/Chief Executive Officer, Access Holdings,  Innocent Ike, was quoted to have said: “Our 2025 performance reflects both the resilience of the Access franchise and the strength of the institution we have built over time.
“Despite a dynamic operating environment, we delivered strong earnings supported by diversified income streams, disciplined execution, and a continued focus on balance sheet optimisation.
“We have now entered a more deliberate optimisation phase, with a stronger emphasis on returns on capital, earnings quality, and long-term value creation.”

The balance sheet also recorded significant expansion, driven by strong deposit mobilisation and sustained customer confidence. Total assets increased by 24.3 per cent to N51.57 trillion, while customer deposits grew by 53.4 per cent to N34.56 trillion.
Shareholders’ funds rose by 15 per cent to N4.33 trillion, reflecting both retained earnings and continued investor confidence in the institution. This growth highlights not only the scale of the Group’s operations but also the deepening trust of customers, counterparties, and investors.
Looking ahead, Access Holdings said it expected macroeconomic conditions to continue stabilising, creating opportunities for credit expansion, increased transaction volumes, and higher levels of activity across the financial system.
The Group intends to maintain its focus on disciplined execution, improved capital efficiency, and sustainable growth across its diversified platform.

Ike noted, “Africa remains one of the most compelling long-term growth frontiers globally. Our role is not only to participate in that growth, but to help shape and finance it.

“At Access Holdings, we have built an institution designed to endure, anchored on strong governance, disciplined execution, and a clear strategic direction. Our focus remains on delivering consistent, high-quality, risk-adjusted returns while building a financial institution that will stand the test of time.”