Nigerian Banks Under Pressure: Why Some Will Stay in Forbearance Beyond 2025 – Fitch

Nigerian Banks Under Pressure: Why Some Will Stay in Forbearance Beyond 2025 – Fitch

29th August 2025 | PHOTO: Independent |  By Francis Obinna Eyisi

For years, Nigerian banks have operated under regulatory forbearance—a safety net that let them breathe easier on capital requirements and loan losses. But the clock is ticking.

By December 2025, most banks are expected to exit this regime. Yet, according to Fitch Ratings, some won’t make the cut. And the consequences? Brutal.

Let’s break it down 

1. The Price of Staying Behind

Banks still under forbearance after 2025 will face strict restrictions:

❌ No dividends to shareholders.

❌ No executive bonuses.

❌ No foreign investments.

Think of it as financial “quarantine.” The CBN isn’t joking—it wants banks to stop deferring risks and start cleaning up their books now.

2. Why This Matters: Hidden Loan Landmines

When the forbearance window closes, many big loans currently parked as Stage 2 will likely be reclassified as impaired.

Translation?  Higher loan-loss charges → pressure on capital → potential shake-ups.

But here’s the twist: most Nigerian banks have already prepared. Through capital raises, mergers, and restructuring, they’ve built stronger shock absorbers.

3. Recapitalization Wave: The New Reality

The CBN’s push for higher paid-in capital has sparked:

Fresh equity injections.

Strategic bank mergers.

Better loss-absorption buffers.

By forcing discipline, the CBN is making sure Nigeria’s banks don’t just survive 2025—they’re fit for 2026 and beyond.

 4. FX Liquidity and Eurobonds: A Silver Lining

Not all the news is grim. The naira’s devaluation (painful as it feels) has boosted foreign exchange turnover. Liquidity is stronger, and banks are more capable of meeting obligations.

Fitch highlights this: about $2.2 billion in Eurobonds will mature or be callable by 2026—but most banks are positioned to meet them without stress.

That’s investor confidence right there.

 5. What This Means for You

This isn’t just a banker’s story. It’s a people’s story.

If you’re an investor, know that banks under forbearance won’t pay dividends.

If you’re a depositor, this push strengthens stability—your money sits in cleaner, stronger banks.

If you’re watching Nigeria’s economy, this is part of a bigger shift: from relief → discipline → resilience.

The Bigger Picture

The CBN isn’t just plugging holes—it’s reshaping the banking landscape. Tighter controls, stronger capital, less reckless lending.

In Fitch’s words: Nigerian banks are stepping into 2026 with cleaner balance sheets and tougher capital buffers.

The question is—who will rise as the strongest players?

 Final Word
The next year is make-or-break. Some banks will graduate from forbearance and thrive. Others will be left behind, punished for delay.

For Nigerians, that means a sector moving closer to global standards—and one where trust might finally match ambition.