The Long-Term Issuer Default Ratings (IDRs) of First HoldCo Plc (FHC) and First Bank of Nigeria Ltd. (FBN), its commercial banking affiliate, have been confirmed by Fitch Ratings at “B” with a Stable Outlook.
In addition, the credit rating agency raised the banks’ National Long-Term Ratings from “A(nga)” to “A+(nga),” citing increased profitability and better capital buffers.
The success of a N147 billion rights issuance and an increase in profitability due to a wider net interest margin (NIM) after rate rises by the Central Bank of Nigeria and a more stable exchange rate environment are reflected in the national rating’s upgrading.
According to Fitch’s most recent rating, both FHC and FBN have strong domestic franchises that support their creditworthiness. As of the end of 2024, FBN had 10.7% of Nigeria’s banking sector assets. Its stability has been supported by a stable financing profile based on a robust retail deposit base and a varied revenue mix, with non-interest income accounting for 42% of operating income on average over the last four years.
Nonetheless, the agency raised persistent issues over credit concentration, sovereign risk, and asset quality, especially in the oil and gas industry, which accounts for 36% of FBN’s total loan book.
Due in large part to a big borrower’s failure, the percentage of impaired loans increased significantly to 10.2% at the end of 2024 from 4.9% the year before. Risks are also present with high stage 2 loans, many of which are dollar-denominated and have to do with oil.
According to Fitch, the expiration of forbearance on oil and gas loans is anticipated to put additional strain on asset quality in 2025 and could raise the ratio of problematic loans. It went on to say that FHC’s profitability is still strong in spite of asset quality issues. Over the previous four years, operating returns on risk-weighted assets have averaged 4.6%, with higher interest rates and foreign exchange gains from the naira devaluation supporting 2023 and 2024 performance.
It stated that FBN’s capital adequacy ratio was 16.5% at the end of 2024, which was slightly higher than the 15% regulatory level, indicating that capital adequacy is also improving.
Fitch anticipates that solid earnings and the proceeds from the recent rights issuance will assist capital buffers increase even more in the foreseeable future.
Similar stability may be seen in Nigeria’s sovereign rating, which was raised to “B” in April 2025, according to Fitch’s Stable Outlook on the IDRs. The agency made it clear that any rating increase for FBN and FHC would necessitate both a sovereign rating upgrade and ongoing enhancements to the banks’ financial profiles.
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