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WafricNews - June 20, 2025

Nigeria’s banking sector is bracing for a major financial test as five leading banks prepare to settle a combined $2.35 billion in Eurobond repayments by the end of 2026. With maturities staggered between October 2025 and November 2026, analysts say these obligations could place added strain on banks already navigating tough macroeconomic and regulatory headwinds.

This looming debt burden comes amid ongoing Central Bank of Nigeria (CBN) recapitalization mandates, a weakening naira, and global interest rate uncertainty—creating a cocktail of challenges for Nigeria’s financial institutions.

Who Owes What, and When?

  • First Bank of Nigeria will be the first to face maturity in October 2025, with a $350 million Senior Unsecured Eurobond issued in 2020. It marked Nigeria’s first bank Eurobond issuance in three years at the time.

  • Ecobank Nigeria follows with its $300 million Eurobond maturing in February 2026. In a proactive move, the bank has already made a tender offer to repurchase $150 million, aimed at reducing interest costs and managing liability exposure.

  • Meanwhile, Access Bank is saddled with two major Eurobond repayments totaling $1 billion:

    • A $500 million Senior Unsecured Eurobond with a 6.125% coupon due in September 2026.

    • An Additional Tier-1 $500 million bond—with a much higher 9.125% coupon—set to mature in October 2026.

  • Fidelity Bank will face a $400 million Eurobond maturity in October 2026, carrying a 7.625% coupon.

  • Finally, UBA rounds off the list with a $300 million Senior Unsecured facility, set to mature in November 2026 at a coupon rate of 6.75%.

Ecobank’s Covenant Crisis and Naira Fallout

One of the most telling cases is Ecobank Nigeria, which has also sought approval from bondholders to permanently remove its capital adequacy covenant on remaining notes. The bank is offering an early consent fee of $2.50 per $1,000 in principal to incentivize investors.

This follows a significant blow to Ecobank’s capital adequacy ratio, which fell below the 10% threshold after the sharp naira devaluation in H1 2024. The bank initially received temporary forbearance until September 2025, but now seeks a permanent adjustment to avoid technical defaults and regulatory penalties.

Can the Banks Pay Without Refinancing?

According to Renaissance Capital and Fitch Ratings, Nigerian banks currently hold a net foreign asset position of $7.7 billion, enough to settle the Eurobond repayments without resorting to new external borrowings.

Still, the timing and clustering of these maturities present serious liquidity and capital management challenges. With local funding costs on the rise and forbearance policies being gradually unwound, banks may need to consider raising fresh equity or sourcing more stable long-term foreign capital to stay afloat.

Why This Matters for Nigeria’s Financial Stability

The maturing Eurobonds add to the already high-pressure environment created by the CBN’s recapitalization directive, which demands that banks shore up their capital base significantly by 2026.

As banks juggle:

  • Expensive dollar-denominated debts

  • Tougher capital adequacy requirements

  • Rising non-performing loans

  • And regulatory recalibrations

… the risk of reduced credit growth and lower dividend payouts is growing. This could affect investor sentiment, trigger a wave of sector consolidation, or force some smaller lenders to merge or seek capital injections.

WafricNews Business Insight:

With $2.35 billion in repayments due, Nigerian banks are facing a tightrope walk. The choices they make between now and late 2026 will shape the future of Nigeria’s financial system — from capital resilience to credit availability.

The debt clock is ticking — will the banks refinance, restructure, or ride it out? One thing is clear: Nigerian banking is headed for a moment of reckoning.



By WafricNews Desk.

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