Five listed Nigerian Tier-1 banks, also known as FUGAZ have released their full-year audited 2025 results for the period ended December 2025, reporting a combined impairment charges on loans to customers of N2.365 trillion compared to N1.44 trillion booked in 2024.
- +FUGAZ provision N2.36 trillion, as bad loans mount in 2025
This represents a 64% YoY growth and marks the highest provision on loans and advances to customers in the last three years.
This represents a 64% YoY growth and marks the highest provision on loans and advances to customers in the last three years.
In 2023, the five banks made provision of N916.54 billion.
The banks are FirstHoldco, United Bank of Africa, Guaranty Trust Holdings, Access Holding and Zenith Bank.
From these loans, the banks recorded combined interest income from loans and advances to customers of N7.1 trillion; out of the total interest income of N14.5 trillion.
That said, let us look at how the banks individually performed.
Among the FUGAZ banks, GTCO stood out as the only lender to record a decline in impairment charges in 2025.
The decline appears to be largely driven by lower Stage 3 impairments, which dropped to N49.4 billion in 2025 from N64.6 billion in 2024.
This supported the bank’s capital position, with its capital adequacy ratio rising to 43.82% from 39.31% in 2024.
At the same time, the bank continued to grow its lending income.
GTCO has maintained the muted impairment charges, just like in 2025, impairment charges on loans declined by 41% to N7.949 billion from N13.484 billion in Q1 2025
Access Holdings Plc recorded the second-lowest impairment charges of N287 billion in 2025 from N93 billion in 2024.
From these loans, the bank earned interest income of N1.9 trillion in 2025, compared to N1.77 trillion in 2024, out of total interest income of N3.55 trillion, placing it just behind Zenith Bank Plc in overall interest income generation.
The bank’s capital adequacy ratio also improved to 18.12% in 2025 from 18.03% in 2024, reflecting a stronger capital buffer
A review of the impairment table suggests that most of the provisioning pressure came from Stage 3 credit-impaired loans, which stood at N133.5 billion by the end of 2025.
The bank also wrote off N309.5 billion during the year.
Coming into 2026, although impairment on customers’ loans increased by 116% to N23 billion, it is still 8% of 2025 full year impairment charge
United Bank for Africa Plc recorded impairment charges on loans and advances to customers of N381 billion in 2025, up 54% from N246.9 billion recorded in 2024.
The increase in impairments appears to have been largely driven by a sharp rise in Stage 3 credit-impaired loans, which increased to N350.7 billion in 2025 from N196.7 billion in 2024.
Overall, the group’s capital adequacy ratio dropped to 23.20% from 31% in 2024.
The bank earned N864.5 billion from the loans and advances to customers in 2025 compared to N779.7 billion in 2024. This represents about 33% of the bank’s total interest income of N2.649 trillion, compared to the N2.370 trillion in 2024.
Coming into 2026, impairment charges on customer loans rose further to N38.2 billion in Q1 2026 from N11.1 billion in Q1 2025.
First HoldCo Plc recorded the 2nd highest impairment charges with net impairment on loans and advances to customers rising to N786.8 billion in 2025 from N371 billion in 2024.
The sharp rise in impairments appears to have been largely driven by Stage 3 credit-impaired loans. From the bank’s total loan book, Stage 3 impairments stood at N218.8 billion, accounting for the largest share of total provisions, particularly within corporate term loans where impairments reached N173.7 billion.
First HoldCo’s capital adequacy ratio declined to 10.95 per cent in 2025 from 17.32 per cent in 2024.
At the same time, the bank continued to generate strong lending income. Interest income from customer loans rose to N1.85 trillion in 2025, the second highest among the banks behind Access Holdings Plc, contributing significantly to the bank’s total interest income of N2.99 trillion.
So far in 2026, as reflected in its Q1 2026 results, impairment charges on customers’ loans increased marginally by 1.86% to N41.990 compared to N41.225 billion in Q1 2025
Zenith Bank Plc recorded the highest impairment charges on loans and advances to customers, rising to N843.4 billion in 2025 from N594.2 billion in 2024.
This stemmed from a customer loan book of N10.45 trillion, representing a 4.48% increase from the N9.97 trillion recorded in 2024, making it the second-largest loan portfolio among the banks.
The sharp rise in impairments appears linked to significant Stage 2 and Stage 3 exposures within the loan portfolio.
Despite this, the group’s capital adequacy ratio declined to 24.30% in 2025 from 26.25% in 2024.
The impairment charges have continued to rise in 2026, with impairment charges on loans increasing by 15% to N41.68 billion in Q1 2026 compared to N35.949 billion in Q1 2025.
Overall, the 2025 results show that while FUGAZ banks continued to benefit from elevated interest rates and strong earnings from both lending and investment securities, the operating environment became more challenging.
The sharp rise in impairment charges also appears partly linked to the industry’s exit from CBN regulatory forbearance.
At the same time, the sharp rise in impairment charges across most of the banks suggests that borrower repayment pressure intensified during the year, particularly within Stage 2 and Stage 3 loan categories.
Another issue is income mix; although combined interest income rose strongly, a growing portion of earnings is now being driven by treasury bills, bonds, and other investment securities rather than traditional lending activities.
The pressure on profitability was further worsened by weaker foreign exchange gains and rising operating expenses, which offset part of the strong core earnings performance.
GTCO emerged as the only outlier with a decline in impairment charges, while Zenith Bank remained the most profitable lender despite recording the highest impairment levels.
Early Q1 2026 results suggest the pressure has persisted across most of the banks, with combined impairment charges on loans and advances rising by 36 per cent year-on-year to N153 billion. However, the trend was not uniform, as GTCO again remained the only lender to record a decline in loan impairments in Q1.
