Ecobank Nigeria Swings to $31m Loss as Bad Loans Surge

Ecobank Nigeria swung to a pre-tax loss of $31 million in 2025 from a profit before tax of $5 million in 2024, as a sharp rise in bad loans in its corporate and investment banking (CIB) portfolio, especially in the oil and gas sector, followed the end of a regulatory forbearance regime.

The deterioration in asset quality pushed the bank’s return on equity down to -13.8%, even as underlying revenues improved. Net revenue rose $28 million, or 22% (+28% in constant currency), to $155 million in 2025. This was driven largely by a $20 million increase in net interest income to $104 million, supported by treasury management solutions and lower interest expenses after Ecobank Nigeria partly repaid a $300 million 7.125% Eurobond, according to its parent company’s earnings release on Tuesday.

Non-interest revenue increased by $8 million, underpinned by higher income from cash management services, fixed income trading and card fees as transaction volumes climbed, the lender said.

Operating expenses rose modestly by $3 million, or 3% (+7% in constant currency), mainly due to higher depreciation and amortisation and increased technology spending. However, strong top-line growth meant the cost-to-income ratio improved significantly to 67.0% in 2025 from 79.4% in 2024.

The main drag on profitability came from a surge in impairment charges on financial assets, which jumped by $62 million, or 298%, to $82 million. The bank attributed this to a spike in non-performing loans in its CIB business, linked to the expiry of the Central Bank of Nigeria’s forbearance framework.

Ecobank said its 2025 asset quality metrics reflect a “deliberate normalisation” of the balance sheet after the end of regulatory forbearance. Non-performing loans rose to $1.2 billion, representing an NPL ratio of 9.4%, largely due to a one-off reclassification of a handful of legacy exposures in Nigeria.  

Management stressed that the increase does not point to a broad-based deterioration in credit quality across the wider Ecobank Group, but rather the “final alignment” of problem loans with more conservative risk-recognition standards. The bank reported a coverage ratio of 83.3%, which it said “fully safeguards” the balance sheet as it pursues recoveries.

Ecobank Nigeria is rolling out a targeted sell-down and recovery programme aimed at reducing its NPL ratio and further strengthening its balance sheet by the first half of 2026. With the forbearance transition largely complete, the bank expects a slowdown in new NPL formation, supported by tougher risk controls and “First-Time Right” underwriting standards.

On capital, Ecobank Nigeria has met the CBN’s new minimum paid-up capital requirement of N200 billion for national banks. However, its capital adequacy ratio remains below the 10% regulatory minimum. The bank’s board and management are executing a capital restoration plan designed to return capital buffers to compliant levels, according to the release. 

At the group level, Ecobank reported profit before tax of $801 million in 2025, up 21% year-on-year, underscoring the contrast between the Nigerian subsidiary’s one-off clean-up and the broader group’s profitability.