World’s leading ratings agency, S&P Global, has upgraded the long-term ratings of seven Nigerian banks following its recent upgrade of Nigeria’s sovereign credit rating, citing ongoing economic reforms, improved foreign exchange market conditions and stronger growth prospects for the country.
The agency, in a statement, raised the long-term global scale ratings of Access Bank Plc, Bank of Industry (BoI), Guaranty Trust Bank Ltd., Stanbic IBTC Bank Plc, Standard Chartered Bank Nigeria Ltd., United Bank for Africa Plc and Zenith Bank Plc to ‘B’ from ‘B-’, while assigning stable outlooks to the institutions.
It also revised the outlooks on Fidelity Bank Plc and First City Monument Bank Plc to positive from stable, while affirming their ratings.
In another development, the President of Dangote Group, Aliko Dangote, has said the Dangote Refinery was targeting a September launch for its Initial Public Offering, IPO, following what he described as overwhelming investor demand running into billions of dollars.
This was as the Chairman of First HoldCo, Olufemi Otedola, commended Dangote’s vision and industrial achievements, describing the businessman as one of Africa’s greatest economic leaders while pledging to personally acquire one hundred million dollars worth of shares in the refinery.
According to S&P, the actions followed its May 15, 2026 decision to upgrade Nigeria’s sovereign credit rating to ‘B’ from ‘B-’ with a stable outlook, reflecting what it described as sustained structural reforms that have improved the country’s macroeconomic profile.
The agency noted that the liberalisation of the foreign exchange market has improved access to foreign currency and encouraged a more market-driven exchange rate system, helping to boost investor confidence and support non-oil economic growth.
S&P added that reforms in taxation and increased centralisation of petroleum revenues have strengthened fiscal earnings and are expected to reduce the ratio of interest payments to government revenue over time.
It recalled that Nigeria’s real Gross Domestic Product (GDP) grew by 4 per cent in 2025, driven by an 8.5 per cent increase in oil production and a 3.9 per cent expansion in the non-oil economy.
Although the agency projected a slight moderation in growth in 2026 due to inflationary pressures arising from the Middle East conflict, it maintained that increased government capital expenditure and ongoing reforms by the Central Bank of Nigeria could support economic resilience.
S&P said Nigeria was relatively shielded from the broader impact of the Middle East crisis because of its status as a net oil exporter and emerging refined petroleum producer.
Nonetheless, the firm expressed confidence that most Nigerian banks would be able to absorb additional provisioning requirements due to their strong profitability levels.
The agency forecast average return on equity for Nigerian banks at between 20 and 23 per cent in 2026, slightly lower than the estimated 25 per cent recorded in 2025, while return on assets is expected to moderate marginally to around 3.0 per cent.
“We expect the Nigerian financial sector will remain profitable and continue to perform well in coming quarters. We forecast the average return on equity will normalise at 20 per cent-23 per cent in 2026 compared to 25 per cent estimated for 2025, while return on assets will decline marginally to 3.0 per cent-3.1 per cent from an estimated 3.3 per cent in 2025.
“Profitability will be supported by still-high interest margins, growing net interest income, and slightly lower provisions. Most Nigerian banks are now compliant with the CBN’s new paid-up capital requirements after successful capital raises over the past two years, improving bank capitalisation overall,” S&P pointed out.
The agency projected that nominal lending growth would remain strong at about 25 per cent in 2026, driven mainly by oil and gas, agriculture and manufacturing.
However, it cautioned that real lending growth remains weak due to inflation and elevated interest rates, adding that asset quality pressures would persist following the withdrawal of regulatory forbearance measures.
S&P estimated that non-performing loans in the banking industry would stabilise between 6 and 7 per cent in 2026, while credit losses are expected to remain elevated at between 2 and 2.5 per cent.
“Pressure on asset quality will persist amid the lifting of forbearance, and high inflation and interest rates. Therefore, we expect the non-performing loan (NPL) ratio to stabilise at 6 per cent-7 per cent in 2026.
“ Similarly, we expect credit losses for the sector will remain elevated at about 2.0 per cent-2.5 per cent in 2026. However, we expect most banks to absorb the incremental provisioning requirements,” the ratings agency stated.
S&P also noted that most Nigerian lenders have complied with the new capital requirements introduced by the CBN after raising fresh capital over the last two years. The apex bank had increased the minimum paid-up capital requirement to N500 billion for banks with international licences and N200 billion for those operating national licences.
Generally, it noted that crude oil production is expected to average about 1.66 million barrels per day in 2026, while the 650,000 barrels-per-day refinery owned by Dangote Group has reached full operational capacity, helping to strengthen domestic fuel supply and cushion external shocks.
Despite the improved outlook, the agency warned that inflation, poverty and weak purchasing power remain major constraints on the Nigerian economy.
According to the report, inflation averaged 18.6 per cent annually over the past decade, although it is projected to decline to 17.7 per cent in 2026 and fall below 10 per cent by 2028.
S&P further stated that poverty levels in Nigeria have risen sharply to 50 per cent of the population from 30 per cent before 2020, while about 31 million Nigerians currently face food insecurity compared to roughly four million in 2019.
Dangote Refinery Targets September IPO Launch
Meanwhile, the President of Dangote Group, Aliko Dangote, has said the Dangote Refinery was targeting a September launch for its Initial Public Offering, IPO, following what he described as overwhelming investor demand running into billions of dollars.
Dangote disclosed this during a visit by the management of First Bank to the refinery complex in Lagos, where discussions centred on investment opportunities and the future growth of the refinery business.
Dangote said preparations were in top gear for the public listing of the Dangote Refinery, with the company targeting a September launch for its Initial Public Offering.
According to him, investor interest in the refinery has continued to grow strongly, with requests already approaching billion of dollars under the ongoing private placement arrangement.
Dangote described the refinery as one of the most strategic industrial investments in Africa, noting that the facility was projected to account for about ten per cent of America’s refining capacity and emerge as the largest refinery in the world.
Chairman of First HoldCo, Olufemi Otedola, commended Dangote’s vision and industrial achievements, describing the businessman as one of Africa’s greatest economic leaders while pledging to personally acquire one hundred million dollars worth of shares in the refinery.
The planned IPO is expected to open up ownership of the Dangote Refinery to a wider segment of Nigerians and institutional investors, as the company positions itself as a major player in the global refining industry and one of Africa’s biggest revenue-generating businesses.
