Forbearance Burden: Nine Banks’ N3.2trn Exposure Wipes Out Shareholders’ Dividends

Nigerian banks are grappling with a significant increase in loan loss provisions, totaling N3.2 trillion in 2025. This substantial figure, a 40% jump from the previous year, stems from the Central Bank of Nigeria's directive for banks to exit regulatory forbearance and fully comply with prudential loan classification standards. While Access Holdings Plc achieved a milestone profit before tax exceeding N1 trillion, its own net impaired charges more than doubled to N523 billion, illustrating the widespread impact of these new regulations. The increased provisioning has directly affected shareholder returns, with dividend payouts taking a hit across the industry. This situation highlights the delicate balance banks must strike between robust financial performance and adhering to regulatory demands aimed at de-risking the financial sector. The Nigerian banking sector's resilience is being tested as it navigates these challenges, with analysts watching closely to see how these provisioning levels will shape future lending and profitability.

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Following tighter provisioning regulations and the Central Bank of Nigeria’s (CBN) move to de-risk industry assets, a total of nine banks have declared N3.2 trillion in loan loss provisions in 2025, with the impact negatively affecting shareholders’ dividend payouts.