Nigerian banking sector sees improved outlook and international interest

Fitch Ratings has revised the credit outlook for 11 Nigerian banking institutions from Stable to Positive. While the agency affirmed their Long-Term Issuer Default Ratings at ‘B’, the shift reflects improving credit prospects linked to Nigeria’s sovereign credit outlook, which was also recently revised to Positive. Affected institutions include Access Bank Plc, Zenith Bank Plc, First Bank of Nigeria Limited, United Bank for Africa Plc, Guaranty Trust Bank Limited, Fidelity Bank Plc, First City Monument Bank Limited, Wema Bank Plc, First HoldCo Plc, Guaranty Trust Holding Company Plc, and Bank of Industry Limited.

The positive outlook is driven by confidence in Nigeria’s economic policy direction, including foreign exchange reforms and macroeconomic stabilization. Improved sovereign creditworthiness may eventually enhance these banks' ability to attract international investors and secure foreign currency funding.

Simultaneously, international interest in the Nigerian market is growing. J.P. Morgan has announced intentions to establish merchant banking operations in the country by the end of 2026, pending regulatory approval. Additionally, South Africa’s Absa Group is evaluating whether to obtain a merchant banking licence to expand its current representative office. These moves highlight increasing competition among global financial institutions seeking to capitalize on opportunities within Africa’s largest economy.