The overwhelming majority of Nigerian banks are anticipated to exit longstanding forbearance by the top of 2025, though the expiry of forbearance will result in some giant Stage 2 loans being reclassified as impaired, Fitch Scores has revealed in a brand new peer credit score evaluation on the nation’s main banks.
In response to the UK-based agency, the banks’ preparedness is supported by the restructuring of many Stage 2 loans, capital raisings throughout the banking sector spurred by a big enhance in paid-in capital necessities, and elevated loss-absorption capability ensuing from improved internet curiosity margins.
This can assist counteract elevated mortgage impairment costs and prudential provisions ensuing from the expiry of forbearance and the related stress on whole capital adequacy ratios throughout the banking sector.
It identified that sure banks can be allowed to proceed working below forbearance, topic to sure penalties, together with the lack to pay dividends.
It added that the naira devaluation has been constructive for the banking sector’s foreign-currency liquidity because it has led to greater overseas change market turnover.
A complete of US$2.2 billion will mature by the top of 2026.
Fitch concluded that he banks usually have enough liquidity to satisfy their Eurobond obligations without having to refinance.
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