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The sharp depreciation of the naira between 2023 and 2024 significantly increased the contribution of foreign subsidiaries to the earnings and asset base of Nigerian banking groups, according to a new report by Fitch Ratings.
The report, titled “African Banking Groups’ Cross-Border Expansion to Continue” and published on September 14, 2026, examined 14 African banking groups with operations in at least five African countries and total consolidated assets exceeding $15 billion as of the end of 2025.
Among the institutions reviewed were four Nigerian lenders — Access Bank Plc, United Bank for Africa (UBA) Plc, Zenith Bank Plc and First HoldCo Plc.
What they are saying
Fitch noted that the contribution of foreign subsidiaries to African banking groups has been rising steadily over the past decade, with the trend accelerating after the COVID-19 pandemic as lenders sought growth opportunities and geographic diversification.
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- “The contribution of African banking groups’ foreign subsidiaries has generally increased over the past decade. This increase has accelerated since the coronavirus pandemic, propelled by acquisitions and, in the case of Nigerian banking groups, the 70% devaluation of the Nigerian naira in 2023–2024.”
According to the report, foreign subsidiaries accounted for 77% of UBA’s net income in 2025, compared with 44% in 2024. Fitch attributed the sharp increase partly to weaker domestic performance during the year. Foreign operations also represented 52% of UBA’s total assets at the end of 2025.
- “Nigeria-based United Bank for Africa Plc (UBA) represented 77% of net income in 2025 (inflated by weak domestic performance in 2025; 2024: 44%) and 52% of total assets at end-2025.”
Access Bank recorded a similar trend, with foreign subsidiaries contributing 48% of group net income in 2025, up from 30% in 2021.
Overseas operations also accounted for 51% of the bank’s total assets at the end of 2025, compared with 23% four years earlier.
Fitch described Access Bank as the African lender with the fastest pace of cross-border expansion in recent years, driven by a series of acquisitions across the continent.
The rating agency highlighted Access Bank’s acquisition of Mauritius-based AfrAsia Bank Limited in July 2025 as one of its most significant transactions.
AfrAsia’s balance sheet was estimated at $6.9 billion, equivalent to about 19% of Access Bank’s consolidated assets at the time.
- “Access Bank Plc (B/Stable) has had the fastest cross-border growth in recent years, reflecting a series of acquisitions intended to build a network of subsidiaries across SSA capable of capturing significant trade and financial flows. The acquisition of Mauritius-based AfrAsia Bank Limited, which completed in July 2025, is the largest and most significant of its many acquisitions due to AfrAsia Bank’s large balance sheet (end-2025: USD6.9 billion; estimated 19% of consolidated group assets.”
However, Fitch noted that Access Bank recently breached a regulatory limit restricting investments in foreign subsidiaries to 10% of shareholders’ funds, a development that has affected dividend payments.
The agency expects the bank to restore compliance through measures including reducing its shareholding in some overseas subsidiaries.
The report also highlighted Zenith Bank’s acquisition of Kenya’s Paramount Bank in April 2026, describing it as part of a broader expansion strategy by Nigerian and South African banks into East Africa.
Fresh capital expected to support African expansion
Fitch noted that Nigerian banks raised substantial amounts of capital over the last two years to meet higher paid-in capital requirements that took effect at the end of the first quarter of 2026.
While part of the capital was used to absorb losses arising from the withdrawal of regulatory forbearance on loan classification, the agency said many lenders continue to maintain capital adequacy ratios above 20%.
According to Fitch, some of the fresh capital is likely to be deployed toward strengthening existing foreign subsidiaries and supporting further expansion across Africa.
The report specifically identified Fidelity Bank Plc and First City Monument Bank (FCMB) as institutions that raised significant capital relative to their balance sheets to retain international banking licences, despite having relatively small operations in the United Kingdom.
Fitch expects both banks to channel part of this capital into expanding their presence across African markets.
Sovereign risk remains a key constraint
Despite the growing importance of foreign operations, Fitch said the ratings of African banking groups remain closely linked to the creditworthiness of their home countries.
The agency noted that none of the African banking groups under its coverage, including Nigerian lenders, currently have Viability Ratings or Long-Term Issuer Default Ratings above their domestic sovereign ratings.
According to Fitch, Nigerian banks remain particularly exposed to sovereign risk due to sizeable cash reserves held with the Central Bank of Nigeria (CBN), which are not fully reflected in conventional exposure metrics.
Nevertheless, the agency believes that continued geographic diversification should gradually reduce banks’ sensitivity to domestic economic and sovereign risks over the medium term.
Get up to speed
Access Bank has accelerated its expansion strategy over the past two years through a series of acquisitions across Africa and beyond.
In 2025, the bank, through Access Bank UK Limited, completed the acquisition of a 76% stake in Mauritius-based AfrAsia Bank Limited. It also acquired Standard Chartered’s consumer, private and business banking operations in Tanzania, alongside its businesses in Angola and Sierra Leone.
UBA currently operates in 20 African countries and maintains a presence in the United Kingdom, United States, France and the United Arab Emirates.
Earlier this year, Zenith Bank completed the acquisition of Paramount Bank in Kenya and launched a subsidiary in Côte d’Ivoire as part of efforts to deepen its footprint in Francophone West Africa.
What you should know
The growing contribution of foreign subsidiaries is already evident in the financial performance of Nigerian lenders.
- Zenith Bank reported that its foreign operations generated N331.7 billion in pre-tax profit in 2025, accounting for 26.3% of group earnings, compared with N179 billion and a 13.5% contribution in 2024.
- The bank’s subsidiaries in Ghana, the United Kingdom, Sierra Leone and The Gambia also recorded stronger balance-sheet growth. Customer deposits rose to N6.7 trillion in 2025, representing 27.8% of total deposits, up from N5.3 trillion and 24.2% of group deposits a year earlier.
Zenith Bank UK accounted for the largest share of those deposits at N3.6 trillion, underscoring the increasing importance of the group’s international operations.
