CBN Push Drives ₦2.38trn Loan Write-offs Across 7 Banks

Seven Nigerian banks wrote off about ₦2.38 trillion in bad loans in 2025, as the Central Bank of Nigeria’s (CBN) stricter stance on forbearance and loan classification forced lenders to clean up long-standing credit risks.

A review of banks’ financial statements reveals that the write-offs, which cut across Zenith Bank, First HoldCo, GTCO, Stanbic IBTC, Wema Bank, and FCMB, reflect a sector-wide effort to properly recognise troubled loans that had been delayed or restructured for years.

Analysts told Pinnacle Daily that the clean-up signals a shift toward stronger balance sheets and more transparent reporting, driven by regulatory pressure rather than new credit stress alone.

While the write-offs highlight past loan weaknesses, they also show banks actively recovering value from old debts, with billions already clawed back, even as insider-related exposures across the sector remained largely performing and unaffected.

Zenith Bank Leads and Writes Off ₦1.24trn

Zenith Bank recorded one of the biggest clean-ups in the industry, writing off a massive ₦1.24 trillion in 2025 alone.

This is a sharp jump from ₦96.5 billion in 2024, showing how quickly some loans deteriorated during the year.

The bank said the write-offs came mainly from customers whose financial conditions had worsened so badly that recovery was no longer realistic.

These loans were fully in the highest risk category, known as Stage 3, meaning they were already considered credit-impaired.

Even after the write-offs, Zenith still pushed recovery efforts, bringing in ₦74.19 billion from old bad loans during the year.

The bank stressed that all insider-related loans remained fully performing and were not part of the write-offs.

First HoldCo Clears About ₦1trn

First HoldCo also carried out a major balance sheet clean-up in 2025, with analysis showing that about ₦1.01 trillion in loans were effectively written off against existing provisions.

While only a small ₦27 million was directly charged to the profit and loss account, the real impact came from a large reduction in its loan impairment buffer, which fell sharply even after heavy new provisions were made during the year.

The bulk of the clean-up came from its commercial banking arm, which carried most of the stressed loans.

The move reflects a deliberate effort by the group to wipe out long-standing non-performing loans that had weighed on its books for years.

There was no evidence that any of the write-offs were linked to insider borrowing.

Ecobank Faces Rising Credit Pressure

Ecobank did not disclose a single headline write-off figure in its 2025 results, but its financials show rising credit stress across its loan book.

The bank’s gross loans rose to about $12.8 billion, but so did risk exposure, with impaired loans remaining significant at around $1.2 billion in Stage 3 loans.

Nigeria stood out as a pressure point, where impairment charges jumped sharply and contributed to losses in the region.

Ecobank’s policy allows it to write off loans only when recovery is no longer commercially viable, usually after full provisioning.

Even then, recovery efforts may continue if there is any chance of repayment.

The bank also confirmed strict controls around insider dealings, focusing more on share trading compliance than loan defaults, with no indication that insider borrowing played any role in credit losses.

GTCO Cuts Write-Offs Sharply to ₦74.93 bn

GTCO took a different path in 2025, significantly reducing its loan write-offs to ₦74.93 billion from ₦340.96 billion in 2024.

Most of the write-offs came from corporate and commercial loans, with very little exposure from retail customers.

The bank said it only writes off loans when there is no realistic chance of recovery.

At the same time, GTCO saw strong recovery performance, bringing in ₦77.81 billion from previously written-off loans, which helped offset some of the credit losses.

It also noted that insider-related loans were reported as fully cleared, with no outstanding balances or impairments linked to directors or related parties.

Wema Bank Writes Off ₦2.33 bn, But Recovers More Than It Loses

Wema Bank recorded ₦2.33 billion in loan write-offs in 2025, down from ₦6.05 billion in the previous year.

The write-offs came mainly from overdrafts and term loans that had become uncollectable.

However, the bank’s recovery performance was stronger than its losses, as it recovered ₦5.33 billion from old written-off loans during the year.

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This means Wema not only cleaned its books but also managed to pull back more cash than it lost to write-offs.

Insider-related loans remained fully performing and were backed by collateral, with no losses recorded from that segment.

FCMB Records Limited Write-Offs and Heavy Impairment Costs

FCMB reported relatively small direct write-offs of ₦613.89 million in 2025 under other operating expenses, but the bigger picture was the ₦92.51 billion impairment charge on loans, reflecting expected credit losses rather than final write-offs.

The bank also recovered ₦10.43 billion from previously written-off loans, showing continued effort to clean up old debts.

However, there was no evidence that insider-related borrowing was part of the write-offs or losses.

The statements show that related-party exposures largely involved internal group transactions between subsidiaries and the parent company.

Stanbic IBTC Nearly Quadruples Write-Offs to ₦48 Billion

Stanbic IBTC wrote off ₦48.04 billion in 2025, a steep rise from ₦14.08 billion in 2024.

Most of the bad loans came from its business and commercial banking segment, where credit risk increased sharply.

Despite the higher write-offs, the bank also recovered ₦10.72 billion from previously written-off loans.

The bank also confirmed that all insider-related loans remained performing and fully compliant, with no write-offs linked to directors or related parties.

Bad Loans Not Fully Lost – Analysts

Sharing his thoughts with the Pinnacle Daily, the head of financial institutions rating at Agusto & Co., Ayokunle Olubunmi, explained that bad loan write-offs should not be viewed as purely negative for either investors or the banking sector but rather as part of the normal cycle of credit risk management.

“When you hear write-off, a bad loan is inevitable in the banking business,” he said, stressing that while banks try to minimise it, credit risk can never be fully eliminated in lending activities.

According to Olubunmi, a key point for investors is that a write-off does not mean the loss is final.

“It doesn’t mean the money is gone forever,” he said, adding that well-structured banks usually maintain dedicated recovery units that continue to pursue these loans even after they are written off.

He noted that this makes recovery performance very important for investors, because any money later recovered is not lost but returned as income.

He pointed out that in some cases, including past periods at banks such as Union Bank, significant amounts of previously written-off loans were later recovered and booked as profit.

From an investor perspective, he said further that the focus should go beyond the headline size of write-offs and look at how effectively banks recover bad loans over time.

In his view, “the question is what’s the recovery”, since recovered funds eventually flow back into the profit and loss account and improve overall earnings.

Olubunmi also linked the issue to bank recapitalisation and regulatory pressure, explaining that stronger capital positions help absorb the impact of write-offs without destabilising the system.

He noted that the CBN is effectively pushing banks to “start on a new slate”, clean up their balance sheets, and strengthen capital buffers so they can continue lending in a more disciplined and sustainable way.

Research and Insight Lead at Norrenberger Financial Group, Samuel Oyekanmi, had, in an interview with News Central TV while speaking specifically on the First HoldCo write-offs, noted that the surge in loan write-offs and higher impairment charges across Nigerian banks is largely driven by the CBN’s directive.

He explained that under normal conditions, banks would prefer to avoid full recognition of losses. “Most banks would prefer to reclassify and keep,” he said, adding that earnings quality has often been sacrificed in favour of strong headline profits supported by accounting adjustments.

“If not for the fact that the CBN has forced them into this, what you would find is more reclassification,” Oyekanmi said, noting that banks are now being compelled to properly recognise bad loans and clean up their books.

He traced the problem partly to the post-COVID period, when the CBN allowed forbearance and relaxed certain rules to support lending.

“We needed to inject more funds into the economy, and as a result, the CBN allowed some forbearance and some laxity,” Oyekanmi said, adding that this encouraged aggressive lending and delayed recognition of credit risks.

He noted that many banks also relied heavily on restructuring tools such as loan rollovers, extensions, and interest capitalisation instead of classifying exposures as non-performing.

He also pointed to weak early warning systems, which meant that credit problems were often detected late, only becoming visible when they had already grown into major impairments.

Oyekanmi said the CBN’s current enforcement is tightening credit standards and forcing banks to become more selective.

While this may pressure profitability and investor sentiment in the short term, he maintained that the long-term outcome will be stronger balance sheets, better risk management, and more de-risked loan portfolios going into 2026 and beyond.