Fitch Ratings has revised the credit outlooks of 11 Nigerian banks and financial institutions to Positive from Stable, signalling growing confidence in the country’s economic recovery and the potential for stronger credit ratings in the future.
The global credit rating agency, however, maintained the institutions’ Long-Term Issuer Default Ratings at ‘B’, meaning the decision reflects improved prospects rather than an immediate upgrade. The outlook revision follows a similar move on Nigeria’s sovereign credit outlook on October 9, 2026.
The affected institutions are Access Bank, Zenith Bank, First Bank of Nigeria, United Bank for Africa (UBA), Guaranty Trust Bank (GTB), Fidelity Bank.
Others are First City Monument Bank (FCMB), Wema Bank, First HoldCo, Guaranty Trust Holding Company (GTCO) and Bank of Industry.
Fitch attributed the improved outlooks to economic reforms, greater exchange-rate flexibility, stronger foreign exchange reserves and moderating inflation. These developments could improve the operating environment for lenders, support borrowers’ repayment capacity and strengthen confidence among international investors.
The naira appreciated by approximately 7% in the first nine months of 2026, while Nigeria’s inflation rate eased to 14.63% in September.
Fitch forecasts economic growth of 4.3% in 2026, up from 4% in 2025.
Banks Still Face Significant Risks
Despite the improved assessment, Nigerian lenders remain exposed to risks linked to the government’s financial position.
Fitch said government securities and cash reserves held with the Central Bank of Nigeria (CBN) accounted for between 23% and 45% of the affected commercial banks’ total assets at the end of 2025. Their combined sovereign exposures were equivalent to between 150% and 500% of their Fitch Core Capital.
The concentration means any deterioration in Nigeria’s creditworthiness could place pressure on banks’ balance sheets, underscoring the close relationship between sovereign risk and financial-sector stability.
Lenders have also faced higher impaired-loan ratios following the withdrawal of longstanding regulatory concessions on the classification of problem loans.
However, capital raising to meet revised minimum capital requirements that took effect at the end of the first quarter of 2026 has strengthened their ability to absorb losses and support business expansion.
Fitch also showed the sector’s resilience despite the CBN’s 45% cash reserve ratio for commercial banks, which limits the proportion of deposits available for lending.
At the individual-bank level, First Bank restored compliance with its minimum capital adequacy requirement in the first half of 2026, with its capital adequacy ratio reaching 16.7% at the end of June, above the regulatory minimum of 15%.
Access Bank, meanwhile, faces a separate regulatory challenge involving investments in foreign subsidiaries. Fitch expects the bank to take corrective measures to restore compliance and strengthen its capital position by the end of the first quarter of 2027.