S&P Upgrades Seven Nigerian Banks After Sovereign Rating Boost

Seven Banks Raised to ‘B’ After Sovereign Upgrade

S&P Global Ratings has upgraded the long-term credit ratings of seven Nigerian banks, lifting Access Bank, Bank of Industry, GTBank, Stanbic IBTC, Standard Chartered Nigeria, UBA, and Zenith Bank from ‘B-‘ to ‘B’ with stable outlooks.

The move follows S&P’s upgrade of Nigeria’s sovereign rating to ‘B’ from ‘B-‘ on May 15 — the country’s first rating upgrade in 14 years. The agency said ongoing economic reforms, a more liberalised foreign exchange market, and stronger fiscal revenues had improved the country’s overall credit profile, directly lifting the banks tied to it.

S&P also revised the outlooks on Fidelity Bank and First City Monument Bank (FCMB) to positive from stable, while affirming their current ratings.

“We expect the Nigerian financial sector will remain profitable and continue to perform well in coming quarters,” S&P said in its report. The agency forecasts average return on equity for Nigerian banks at 20-23% in 2026, down slightly from an estimated 25% in 2025, while return on assets is expected to moderate to around 3%.

NPLs Still a Concern

The agency cautioned that asset quality pressures persist. Non-performing loans are expected to stabilise between 6-7% this year, with credit losses remaining elevated at 2-2.5%. But S&P said most banks can absorb the provisioning requirements given their strong profitability.

On the capital side, the report noted that most Nigerian lenders have now complied with the Central Bank’s increased minimum paid-up capital requirements after raising fresh capital over the last two years.

Lending growth is projected to remain strong at about 25% in 2026, driven by oil and gas, agriculture, and manufacturing — though S&P cautioned that real lending growth remains weak when adjusted for inflation and double-digit interest rates.

Sources: ThisDay, Nigeria Lawyer, Arise News