Nigerian banks’ loan loss charges jump to N3.2trn as CBN ends forbearance

Impairment charges across Nigeria's 10 largest banks rose to N3.2 trillion in 2025, a 39 percent increase from N2.3 trillion in 2024, according to BusinessDay data. The surge follows the Central Bank of Nigeria's decision to end Covid-era regulatory forbearance, which had allowed banks to restructure loans and delay classifying non-performing exposures. Loans previously treated as performing are now being reclassified as credit-impaired under IFRS 9, triggering higher provisions. Zenith Bank recorded the highest charge at N843.4 billion, up from N594.1 billion in 2024. First HoldCo followed with N710 billion, up from N371 billion, while Ecobank Transnational reported a 47 percent rise to N707.5 billion. Access HoldCo's provisions increased to N468.04 billion from N368.2 billion, and UBA's rose to N331.1 billion from N216.9 billion. FCMB Group's charges fell to N41.2 billion from N86.1 billion. Sterling Holdco and Wema Bank also saw declines, to N10.7 billion and N21.6 billion respectively. GTCO and Stanbic IBTC Holdings were exceptions, with charges dropping to N66.4 billion and N14.2 billion from N136.6 billion and N99.3 billion. Analysts attribute the broader increase to the cleanup of loan books after the end of regulatory relief. Matilda Adefalujo of Meristem Research said the sector is undergoing a balance sheet reset. Nabila Mohammed of Chapel Hill Denham said the spike reflects the reclassification of previously shielded loans. The charges contributed to a 10.4 percent drop in collective after-tax profit to N5.2 trillion in 2025 from N4.8 trillion in 2024. CBN Governor Olayemi Cardoso's directive bars affected banks from paying 2025 dividends until NPLs are fully provisioned. UBA CEO Oliver Alawuba said the bank is pursuing defaulters to improve its NPL ratio.

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