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Fitch Ratings has revised the outlooks of nine Nigerian banks and two bank holding companies to Positive from Stable, citing improvements in Nigeria’s economic policy framework, foreign exchange reserves and operating environment.
The global rating agency affirmed the Long-Term Issuer Default Ratings (IDRs) of the affected institutions at ‘B’, indicating that the outlook changes do not constitute an upgrade of their existing credit ratings.
The affected institutions are Access Bank Plc, Zenith Bank Plc, First HoldCo Plc (FHC), First Bank of Nigeria Ltd (FBN), United Bank for Africa Plc (UBA), Guaranty Trust Holding Company Plc (GTCO), Guaranty Trust Bank Limited (GTB), Fidelity Bank Plc, First City Monument Bank Limited (FCMB), Wema Bank Plc and Bank of Industry Limited (BOI).
According to Fitch, the revisions follow its decision on October 9, 2026, to revise the outlook on Nigeria’s ‘B’ Long-Term IDRs to Positive, reflecting ongoing reforms and increased confidence that policy momentum will be sustained despite upcoming elections.
Sovereign outlook supports banks’ rating revisions
Fitch said the revised outlooks for Access Bank, Zenith Bank, FHC, FBN, UBA, GTCO, GTB, Fidelity Bank, FCMB and Wema Bank reflect its assessment that Nigeria’s sovereign credit profile and operating environment could become less of a constraint on the banks’ standalone creditworthiness.
The agency said the outlook revisions for FHC and FBN were also supported by the institutions having restored compliance with their total capital adequacy ratio requirements.
For Bank of Industry, Fitch said the Positive Outlook reflected the possibility of improved government capacity to provide support to the policy bank.
The rating agency added that the National Ratings of all the affected institutions and the Government Support Ratings of the eight commercial banks and two bank holding companies remained unchanged.
Stronger reserves, naira appreciation support outlook
Fitch said Nigeria’s operating environment was improving, noting that the naira appreciated by approximately 7% between January and September 2026, while the Central Bank of Nigeria continued to build gross international reserves.
The agency also pointed to moderating inflation and the potential for further monetary policy easing as factors supporting the economic outlook.
- “Inflation increased at the onset of the Iran conflict but reduced slightly to 15.4% in August (June: 15.9%) and we expect it to reduce further, supporting a continued easing of monetary policy. We forecast real GDP growth of 4.3% in 2026 (2025: 4%),” Fitch said.
- The agency noted that the withdrawal of longstanding regulatory forbearance, particularly around the classification of problem loans, resulted in higher impaired-loan ratios at the end of 2025.
However, significant capital raisings to meet new paid-in capital requirements effective from the end of the first quarter of 2026 had helped cushion the impact and provided room for further lending and business growth.
Fitch also said the banking sector had demonstrated resilience despite demanding regulatory requirements, particularly the 45% cash reserve ratio applicable to commercial banks.
Banks remain exposed to sovereign credit risks
Despite the improved outlooks, Fitch said the creditworthiness of the affected commercial banks remained closely linked to Nigeria’s sovereign credit profile because of their substantial exposure to government securities and cash reserves held with the CBN.
According to the agency, net loans accounted for between 18% and 41% of the banks’ total assets at the end of 2025, while CBN cash reserves and Nigerian sovereign fixed-income securities represented between 23% and 45% of total assets.
- The agency said these exposures influenced the banks’ Viability Ratings (VRs), which assess their standalone creditworthiness.
- Fitch added that the VRs of Zenith Bank, GTCO and GTB were one notch below their implied VRs because of constraints associated with Nigeria’s operating environment and sovereign rating.
- Access Bank’s VR was also one notch below its implied level because of capitalisation and leverage considerations.
For FHC and GTCO, Fitch said their holding-company ratings were aligned with their respective group VRs because of the absence of common-equity double leverage and the high fungibility of capital and liquidity within their groups.
FBN restores capital adequacy compliance
Fitch said First Bank of Nigeria breached its minimum bank-solo capital adequacy ratio requirement of 15% at the end of 2025 following a sharp increase in impaired loans.
However, the bank restored compliance, with its capital adequacy ratio rising to 16.7% by the end of the first half of 2026, supported by strong profitability and a small core capital raising.
Access Bank, meanwhile, remained above its minimum capital requirement but faced regulatory concerns over its investments in foreign subsidiaries.
- “Access Bank has breached a regulatory limit on its investments in foreign subsidiaries of 10% of shareholders’ funds, and its bank-solo CAR (end-1Q26: 17.4%) has only a moderate buffer over its 15% minimum regulatory requirement,” Fitch said.
The agency expects the bank to complete measures, including recalling capital from and selling some small shareholdings in certain subsidiaries, to restore compliance with the investment limit and improve its bank-solo capital adequacy ratio by the end of the first quarter of 2027.
BOI outlook reflects potential government support
Unlike the commercial banks, Fitch said Bank of Industry’s Long-Term IDR was driven by its Government Support Rating, which reflects the likelihood of support from the Nigerian government.
The agency said the government had a high propensity to support BOI, given its 99.9% state ownership, established policy role and significant share of government-guaranteed funding.
However, Fitch noted that the government’s ability to provide support remained constrained by Nigeria’s own ‘B’ Long-Term IDR.
What could change the ratings?
Fitch warned that a downgrade of Nigeria’s Long-Term IDRs could trigger downgrades of the Long-Term IDRs and Viability Ratings of the affected commercial banks and holding companies.
- Even without a sovereign downgrade, ratings could come under pressure if problem loans increased materially, capital buffers weakened or foreign-currency liquidity tightened severely.
- For FHC and GTCO, Fitch said sustained common-equity double leverage above 120% could lead to their Long-Term IDRs and Viability Ratings being notched off their respective group VRs.
- BOI’s ratings could also be downgraded if the government’s willingness to support the institution weakened, including through a change in its policy role or a material reduction in government ownership.
- Fitch said upgrades for Access Bank, Zenith Bank, FHC, FBN, UBA, GTCO and GTB would require an upgrade of Nigeria’s Long-Term IDRs alongside stable financial profiles.
- For Fidelity Bank and FCMB, an upgrade would also require an improvement in Fitch’s assessment of Nigeria’s operating environment. Wema Bank would need to meet those conditions and strengthen its business profile.
An upgrade of BOI’s Long-Term IDR and Government Support Rating would require an upgrade of Nigeria’s Long-Term IDRs.
Nigeria’s ‘B’ rating
The Outlook revisions follow a similar action on Nigeria’s ‘B’ Long-Term IDRs on 9 October 2026.
The report noted that the improved outlook reflects stronger foreign exchange reserves, ongoing economic reforms and moderating inflation, although fiscal pressures and high debt-servicing costs remain concerns.
Fitch said Nigeria’s improved macroeconomic policy framework and stronger external financial position have increased its resilience to economic shocks.
