Zenith Bank has reported an impairment charge of ₦781.5 billion on its financial assets for the nine-month period ending September 2025, accounting for 39.3% of its projected pre-provision operating profit for the full year 2024.
A large portion of this impairment—98.5%—relates to loan impairments, including significant write-offs, which have further weighed on the bank’s loan portfolio during the period.
Zenith’s impairments are part of a larger trend in the Nigerian banking industry, where 10 major banks declared a combined N1.58tn in loan impairment charges in the first half of 2025, up nearly 60% from the prior year, due to regulatory rollbacks and macroeconomic stress.
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Zenith’s impairment figure represents a 64% increase from the roughly ₦478bn it booked over the same period in 2024
Despite the hefty impairment charge, Zenith Bank’s share price has remained stagnant since the announcement of its 9-month results on October 30, 2025, holding steady at ₦63 per share.
This price has not moved in two months, underperforming its peers, such as GTCO (+55.53%) and First HoldCo (+88.95%), which have seen strong year-to-date gains.
The bank’s inability to see share price movement reflects the ongoing tension between value investors seeking opportunities and risk-averse institutional players concerned about the growing credit risks.
The impairment largely stems from the reclassification of “Stage 2” loans—loans with increased risk but not yet in default—that had previously been protected by pandemic-related regulatory waivers and foreign exchange forbearance measures. As these waivers expired in mid-2025, the true extent of the risks became apparent on the bank’s balance sheet.
Zenith Bank’s Profit After Tax (PAT) for the 9M 2025 period decreased by 7.6%, further dampening any prospects for an immediate rebound in its share price. Investors are now contemplating the potential impact of this large impairment charge on the bank’s dividend policy, particularly concerning a more conservative payout for the 2025 fiscal year.
Analysts also foresee a moderation in Zenith Bank’s net interest margin (NIM), predicting a decline to an average of 10.0% due to a dovish stance from the Central Bank of Nigeria (CBN) on interest rates. This projected slowdown in NIM is expected to result in more modest growth in the bank’s net interest income (NII) over the next few years, as indicated by analysts at Cardinal Stone Partners.
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In addition to these challenges, Zenith Bank’s gross loans have contracted by 8.9% year-to-date as of 9M 2025, and its trading gains took a significant hit in Q3 2025.
After a ₦222.4 billion loss in the quarter, a stark contrast to the ₦483.2 billion gain in Q2 2025 (which had surged 21.1x from Q1), the bank’s cumulative trading gains for the 9-month period fell to ₦277.7 billion, down from ₦467.8 billion in the first half of 2025.
This combination of shrinking loans, diminished trading gains, and rising impairments has raised concerns over the bank’s near-term financial stability and future growth prospects, leaving investors to carefully assess the risk-reward balance in the coming months
Despite rising impairments, Nigeria’s top banks delivered one of their strongest earnings seasons in recent years against a turbulent macroeconomic backdrop of volatile exchange rates, high rates, and liquidity constraints
Sunday Michael Ogwu is a Nigerian journalist and editor of Pinnacle Daily. He is known for his work in business and economic reporting. He has held editorial roles in prominent Nigerian media outlets, where he has focused on economic policy, financial markets, and developmental issues affecting Nigeria and Africa more broadly.
