Three Nigerian commercial banks recorded a combined N1.17tn in non-performing loans as of the half year ended June 2026, amid a warning by the Central Bank of Nigeria (CBN) against excessive concentration of bank lending in specific sectors and borrowers.
A review of the financial statements of First Bank, a subsidiary of First HoldCo Plc, Guaranty Trust Bank (GTBank), under Guaranty Trust Holding Company Plc, and Stanbic IBTC Bank by THE WHISTLER showed that the lenders had significant exposures to loans classified as non-performing.
First Bank accounted for the largest share, with an estimated N945bn in non-performing loans, while GTBank recorded N148.9bn and Stanbic IBTC Bank reported N72.9bn.
The figures highlight the scale of troubled loans across the three lenders, although their reported figures and classifications differ.
According to the Corporate Finance Institute, loans are generally classified as non-performing when principal or interest repayments remain overdue for more than 90 days, subject to applicable regulatory requirements and the terms of the loan agreement.
Such classification indicates a significantly reduced likelihood of full repayment.
As of the time of filing this report, some commercial banks had yet to publish their half-year 2026 financial statements after securing extensions for their release from the Nigerian Exchange.
According to its half-year financial statement, GTBank recorded N148.9bn in non-performing loans as of June 2026.
The figure comprised N37.3bn in loans to individuals and N111.4bn in loans to non-individuals, indicating that corporate and other non-individual borrowers accounted for the larger share of the bank’s troubled loans.
First Bank recorded a non-performing loan ratio of 13.9 per cent as of the half year, up from 12.9 per cent in the corresponding period of 2025.
The bank’s gross loans stood at N6.8tn as of June 2026. Applying the reported non-performing loan ratio to the gross loan portfolio puts the estimated value of non-performing loans at about N945bn.
A breakdown of First Bank’s loan exposures showed varying levels of non-performing loans across sectors, with oil and gas services recording particularly high ratios.
Loans to the upstream oil and gas services segment had a non-performing ratio of 36.2 per cent, while the ratio for other oil and gas services stood at 44.9 per cent. The downstream oil and gas segment recorded 16.9 per cent.
The bank also reported a non-performing loan ratio of 24.3 per cent for general commerce and 7.3 per cent for manufacturing.
Other reported categories included 1.5 per cent for “others” and 14.7 per cent for the general category.
The figures point to varying credit risks across the bank’s loan portfolio, particularly in oil and gas-related activities and general commerce.
Meanwhile, Stanbic IBTC Bank recorded N72.9bn in non-performing loans as of June 2026, down from N83.5bn at the end of December 2025.
However, the decline in the overall figure was accompanied by an increase in loans classified as losses.
The bank’s half-year financial statement showed that N16.8bn was classified as substandard, down from N20.7bn at the end of 2025.
Loans classified as doubtful fell to N2.1bn from N27.1bn over the same period, while loans categorised as losses rose to N53.9bn from N35.7bn.
The increase in loans classified as losses suggests that, despite the reduction in Stanbic IBTC’s overall non-performing loan balance, a larger amount of its troubled credit portfolio had moved into the most severe classification reported by the bank.
The figures come amid renewed regulatory scrutiny of banks’ lending practices, particularly their exposure to specific sectors, borrowers and asset classes.
The apex bank’s Director of Banking Supervision, Dr Olubukola Akinwunmi had warned banks against excessive concentration of lending among particular borrowers, sectors, geographical regions and asset classes.
He said heavy exposure to sectors such as oil and gas, agriculture, manufacturing, real estate and foreign exchange could leave banks vulnerable to sector-specific shocks.
Such shocks, he warned, could trigger rising non-performing loans, higher loan-loss provisions, capital erosion and liquidity pressures.
Akinwunmi also cautioned that the completion of the N4.65tn banking sector recapitalisation exercise, which saw 33 licensed banks meet the revised minimum capital requirements, should not be regarded as the end of banking sector reform.
He said recapitalisation provided a stronger foundation for the banking system but stressed that lasting financial stability depended on banks combining stronger capital positions with sound governance, prudent risk management and effective regulatory oversight.
