Amid Volatility: 10 Banks Exposure to Oil & Gas Down 22.2% to N12.2tn

Kayode Tokede

On the back of uncertainty in the global oil market, 10 Nigerian banks’ exposure to the sector in the 2025 financial year, declined by 13.4 per cent to N12.22 trillion from N15.7 trillion reported in 2024. 

Analysis of the banks’ financial results showed that the sector contributed to their Non-Performing Loans (NPLs), and drove loans provisions during the period under review. 

The banks investigated by THISDAY are; FBN Holdings Plc, Access Holdings Plc, Guaranty Trust Holding Plc (GTCO), United Bank for Africa (UBA) Plc and Zenith Bank Plc.

Others include; Fidelity Bank Plc, Wema Bank Plc, FCMB Group Plc, Sterling Financial Holdings Company Plc and Stanbic IBTC Holdings Plc.

THISDAY findings also revealed that, during the period, banks made huge loan provisions for Oil & gas, among other key sectors as demanded by the Central Bank of Nigeria (CBN) prudential guidelines.

A breakdown revealed that Zenith Bank and Fidelity Bank had the highest amount of exposure to the oil & gas sector in 2025.

According to the 2025 audited results, Zenith Bank exposure to the oil & gas stood at N2.59 trillion, about 36.8 per cent drop  from N4.11 trillion declared in 2024. The sector contributed 14.2 per cent to Zenith Bank’s NPL as against 30.5 per cent reported in 2024.  

Fidelity Bank announced N1.91 trillion exposure to the oil & gas  sector in 2025, representing a decline of 4.3 per cent from N1.89 trillion in 2024.   

“Net loans and advances dropped by 2.4% to N4.3trillion, with three key sectors accounting for the decline in the loan book (Oil & Gas Upstream, Communication and General Commerce, Construction, Manufacturing, Agriculture, etc.),,” the management of Fidelity Bank explained. 

In addition, GTCO  posted N1.59 trillion exposure to the Oil & gas sector in 2025, up by 39 per cent from N1.14 trillion in 2024. 

The Group in a report obtained by THISDAY said the upstream and Natural Gas sectors contribution increased to 26.3 per cent from 25.6 per cent, and 14.9 per cent from 8.9 per cent, while Midstream and Downstream sectors dropped to 6.9 per cent & 1.1per cent from 8.9 per cent and 4.6 per cent in 2025 and 2024, respectively. 

“Contributions of the Manufacturing sector closed at 14per cent, Information, Telecoms, and Transport also closed at 11.4per cent and Agriculture at 6.7per cent,” GTCO explained in a presentation. 

However, the 10 banks’ gross loans & advances to customers in Oil & gas, among other sectors, closed 2025 at N56.05 trillion, an increase of 14.7 per cent from N48.9 trillion reported in 2024. 

The Oil & gas sector contributed  about 21.8 per cent of the N56.05 trillion gross loans in 2025.  

Access Holdings  led the chart in gross loans with an estimated N13.69 trillion in 2025, up by nearly nine per cent from N11.77 trillion declared in 2024.  

The Organisation of Petroleum Exporting Countries (OPEC)+ increased crude oil supply through the year, adding output in mid-year and further  ramping up production in the second half. 

Despite higher supply and softer global growth following U.S. tariff hikes, crude prices remained resilient, supported by supply disruptions from  sanctions on Russian and Iranian oil.

For 2025, Brent crude averaged $68.16 per barrel, while WTI averaged $64.96 per barrel, with geopolitical constraints offsetting the impact of increased OPEC+ output and weaker demand.

For Nigeria, crude oil production averaged about 1.6–1.7 million baareel per day (mbpd), supported by improved output from major terminals and enhanced security in the Niger Delta, but declined  toward year-end. 

Output remained well below the 2.12 mbpd budget benchmark, while  crude-only production averaged around 1.51 mbpd, slightly above OPEC’s 1.5 mbpd quota. 

With production and oil prices below the $75/barrel budget assumption, the Federal Government is likely to face challenges meeting its 2025 oil revenue targets.

The National Bureau of Statistics (NBS) had disclosed in its Gross Domestic Product  (GDP) report that the Oil sector performance in the fourth quarter of 2025 improved, supported by higher crude production, although output remained below the previous quarter’s level. 

NBS stated that oil sector contributed 2.87 per cent to total real GDP in Q4 2025, slightly higher than its contribution in the corresponding quarter of 2024 but lower than the 3.44 per cent recorded in the preceding quarter. 

“Overall, it contributed 3.53per cent in 2025, higher than its contribution of 3.38per cent in 2024,” the bureau said.

The bureau reported a sharp improvement in oil sector growth on a year-on-year basis. “The real growth of the oil sector was 6.79per cent (year-on-year) in Q4 2025, indicating an increase of 4.71 percentage points relative to the rate recorded in the corresponding quarter of 2024 (2.08per cent),” NBS said.

Analysts expressed that the lingering war between Russia and Ukraine affected Nigeria’s crude oil inflow in the international oil market with a dip in demand from the once-dependable Asian market like India.

They added that banks’ in 2025 exposure to the sector was based on cautious lending to key operators in the upstream sector.

Despite a recovery in oil prices, Nigeria has struggled to meet its production targets due to operational challenges and insecurity coming from pipeline vandalism.

Speaking with THISDAY, the Vice President, Highcap Securities Limited, Mr. David Adnori stated that banks are meant to lend to key sectors in the economy, stressing that increasing exposure by banks to the oil & gas is an indication that the sector remains lucrative amid IOCs leaving the country.

He added the sector remains a significant sector in Nigeria’s economy, stressing that financial instructions cannot ignore the Oil & gas sector despite the domestic and foreign risks.