Nigeria’s five Tier-1 banks — commonly referred to as the FUGAZ banks — recorded combined impairment charges on customer loans of ₦2.365 trillion in their audited 2025 financial results, marking a sharp 64% year-on-year increase from ₦1.44 trillion in 2024.
The banks involved are:
- FirstHoldCo Plc
- United Bank for Africa Plc
- Guaranty Trust Holding Company Plc
- Access Holdings Plc
- Zenith Bank Plc
The latest figure represents the highest industry-wide loan provisioning level recorded by the major lenders in at least three years, up from ₦916.5 billion in 2023.
Loan Growth Continues Despite Rising Risk
Combined loans and advances to customers rose to about ₦43 trillion in 2025 from ₦39.96 trillion in 2024, reflecting continued credit expansion despite economic headwinds.
The banks also generated approximately ₦7.1 trillion in interest income from customer lending out of total interest income of ₦14.5 trillion.
However, rising provisions indicate growing repayment pressure among borrowers, especially in Stage 2 and Stage 3 loan categories under IFRS 9 classifications.
Bank-by-Bank Breakdown
Guaranty Trust Holding Company Plc
GTCO emerged as the only FUGAZ bank to record a decline in impairment charges.
- Loan impairments fell by 51.4% to ₦66.4 billion
- Customer loans increased from ₦2.79 trillion to ₦3.13 trillion
- Stage 3 impairments dropped to ₦49.4 billion from ₦64.6 billion
- Capital adequacy ratio improved to 43.82%
The group also maintained strong earnings momentum:
- Total interest income rose to ₦1.65 trillion
- Interest income from loans stood at ₦559 billion
GTCO also sustained the trend into Q1 2026, with impairment charges declining further year-on-year.
Access Holdings recorded impairment charges of ₦287 billion in 2025, up significantly from ₦93 billion in 2024.
Key highlights include:
- Loan book expanded to ₦13.34 trillion
- Interest income from customer loans rose to ₦1.9 trillion
- Total interest income reached ₦3.55 trillion
- Stage 3 impaired loans stood at ₦133.5 billion
- ₦309.5 billion in loans were written off during the year
The bank’s capital adequacy ratio improved slightly to 18.12%.
UBA posted impairment charges of ₦381 billion, up 54% from ₦246.9 billion in 2024.
Despite only marginal loan growth, deterioration in credit quality intensified:
- Loan portfolio rose slightly to ₦7.02 trillion
- Stage 3 impairments surged to ₦350.7 billion
- Stage 2 impairments climbed to ₦81.7 billion
- Capital adequacy ratio declined sharply to 23.2% from 31%
Interest income from customer loans increased to ₦864.5 billion.
FirstHoldCo recorded the second-highest impairment charges among the FUGAZ banks.
- Loan impairments surged to ₦786.8 billion from ₦371 billion
- Loan book stood at ₦8.97 trillion
- Stage 3 impairments totaled ₦218.8 billion
- Corporate term loans accounted for the largest provisions
The group’s capital adequacy ratio weakened significantly:
- 10.95% in 2025 versus 17.32% in 2024
Meanwhile, lending income remained strong:
- Interest income from customer loans rose to ₦1.85 trillion
- Total interest income reached ₦2.99 trillion
Zenith Bank recorded the highest impairment charges among the Tier-1 lenders.
- Loan impairments rose to ₦843.4 billion
- Customer loan book increased to ₦10.45 trillion
- Stage 2 loans stood at ₦3.35 trillion with ₦634.7 billion provisions
- Stage 3 loans totaled ₦338.4 billion with ₦241 billion provisions
Despite the elevated provisions, Zenith remained the most profitable lender among the five banks.
- Total interest income reached ₦3.67 trillion
- Interest income from loans totaled ₦1.82 trillion
Capital adequacy declined to 24.3% from 26.25%.
Key Industry Insights
Analysts say the sharp increase in impairment charges reflects:
- Rising borrower stress amid high interest rates
- Economic pressures and inflationary conditions
- Exit from CBN regulatory forbearance measures
- Increased migration of loans into Stage 2 and Stage 3 categories
Another major trend emerging from the results is a strategic shift by banks toward lower-risk government securities such as treasury bills and bonds, as elevated yields make them more attractive relative to conventional lending.
While core earnings remained strong, profitability faced pressure from:
- Rising operating costs
- Reduced foreign exchange gains
- Higher provisioning requirements
Early Q1 2026 results suggest the pressure has continued, with combined impairment charges across the banks already rising 36% year-on-year to about ₦153 billion. GTCO again remained the only major lender to post a decline in loan impairments during the period.
