Ecobank advances turnaround plan for Nigerian banking unit amid capital pressure

Ecobank Transnational Incorporated (ETI), says it is pressing ahead with a turnaround plan for its Nigerian subsidiary as the lender works to close a capital gap that still falls short of regulatory expectations set by the Central Bank of Nigeria (CBN). 

The update was provided Wednesday, June 3, in Lomé, where the pan-African banking group held its 38th Annual General Meeting. Group Chief Executive Officer Jeremy Awori said the situation at Ecobank Nigeria is under active review by both the group board and the subsidiary’s board. 

“We have a plan in execution, which is being very closely monitored by the board, not only that of ETI but also that of Ecobank Nigeria,” Awori said. He added that details remain limited because implementation is ongoing.

Ecobank Nigeria Pre-tax loss widens in 2025

Ecobank Nigeria swung to a pre-tax loss of $31 million in 2025, compared with a $5 million profit a year earlier, according to the group’s consolidated financial statements. 

The downturn reflects a sharp deterioration in asset quality. The bank’s non-performing loan ratio climbed to 42.1% from 9.7% in 2024, signaling rising stress in parts of its loan book. Stage 3 loans under International Financial Reporting Standards (IFRS), which represent the most impaired assets, rose from $158 million to $667 million over the period. 

At the same time, loan loss coverage weakened. Provisions fell to 16.8% of impaired loans, down from 38.2% a year earlier. That compares with an industry average closer to 70%, underscoring the scale of the gap. In practical terms, the bank is now setting aside about 17 cents for every dollar of bad loans, down from 38 cents previously. 

Write-offs also increased sharply, almost quadrupling to $82 million in 2025 from $21 million a year earlier, the annual report published May 20 showed. The group linked the deterioration in part to the end of a regulatory forbearance programme by the CBN covering selected oil and gas exposures.

Ecobank halts upstream dividend payments

Awori said Ecobank Nigeria has stopped upstream dividend payments to the parent company as part of efforts to rebuild internal buffers. 

“We are not taking dividends out of that subsidiary. We are leaving them there so that it can recover,” he said, without giving a timeline for full regulatory normalization. 

Despite the pressure, management pointed to some operational resilience. Pre-provision profit nearly doubled to $51 million in 2025 from $26 million a year earlier, suggesting improved underlying earnings before credit losses. 

Ecobank Nigeria met the CBN’s minimum paid-up capital requirement of 200 billion naira (about $147 million) for nationally licensed banks as of December 2024. However, it remains below the required capital adequacy ratio of 10%, which measures capital relative to risk-weighted assets.

Nigeria’s disproportionate drag on group risk 

Nigeria continues to weigh heavily on Ecobank’s overall risk profile. While the country accounts for 12.4% of the group’s loan book, it represents roughly 56% of total non-performing loans, according to the annual report. 

That imbalance pushed the group’s cost of risk to 500 basis points from 178 basis points a year earlier. Management is targeting a reduction to between 250 and 350 basis points in 2026, a goal that would depend in part on stabilizing conditions in Nigeria. 

Ecobank reported a central provision reserve of $576 million as of Dec. 31, 2025, designed to absorb potential credit shocks across its markets.

Group performance remains resilient 

Despite challenges in Nigeria, Ecobank delivered solid group-level results. Profit rose to $594 million in 2025, while net revenue increased 17% to $2.45 billion. 

The Group operates across 34 African markets, serving more than 30 million customers and employing over 14,000 staff globally, including offices in Europe, the Middle East, and Asia. 

Shareholders approved a $40 million dividend, reflecting confidence in the broader group even as the Ecobank Nigeria turnaround plan remains a key execution risk for 2026.

Ecobank Nigeria, headquartered in Victoria Island, Lagos, remains one of the group’s largest subsidiaries, with more than 250 branches across the country.