My people, na wetin we dey hear wey dey happen for banking sector for Naija no be small thing o! S&P Global don yan say Nigerian banks dey carry plenty government securities, about 11 percent of their total assets. E mean say dem no dey gree give money for loans like before, dem dey waka for safer options instead.
No be say dem just like safety, but if you fit add am, the report talk say this dey make banks dey vulnerable to all those wahala wey fit happen for sovereign matters. But no fear much, as things dey improve, dem expect this risk go reduce small.
According to S&P for their 2026 Banking Outlook, dem talk say e go beta as lending dey enter real economy. Na di oil and non-oil sector go fill am well-well. Dem don project say Nigeria’s GDP growth go dey average 3.7 percent for 2025 and 2026. Na so we go see some small light for this economic matter.
Inflation self dey show say e go dey come down gradually to about 21 percent for 2026. This one go give room for correct monetary easing, especially after dem don cut 50-basis-point interest rate last year. Imagine say na only 25 percent credit growth we dey expect as dem start dey lend am to oil, gas, agriculture, and manufacturing. But make we no forget that retail lending na just small side hustle for banks, no dey expect too much from there.
The gist wey dey trickle down be say if oil price fit hover around $60 per barrel, e go help borrowers to get their head above water, but still don’t sleep on top of di matter o. E still dey hard, as the report show say half of di loans na in foreign currency, and one-third na for oil and gas sector. Na jazz we dey call risk concentration! Many banks don already dey see their asset quality dey spoil as nonperforming loans don rise to about 7 percent from 4.9 percent back in 2024.
But make we scatter di gist well; dem project say profitability go dey slightly decline for 2026, but still dey maintain solid position against other regions. E for fit sit around 20 percent to 23 percent for the return on equity. Non-interest income self go dey rise with digital payment boom, plus agency banking dey carry many fresh dollars small.
We see how the government dey borrow pass private sector, as e show say credit to Federal Government don jump climb N9.19 trillion in 2025. Na 695.6 percent swing be dat! And public sector credit don climb from N25.03 trillion to N34.22 trillion within a year. E mean say dem dey rely more on local funding rather than the normal foreign options.
All these things wey dey happen na sharp reminder say the landscape for banking dey change; and we fit only hold our breath and see how e go unfold.
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