Nigerian Banks Face Profit Decline from Treasury Bill Cuts

Fitch Ratings reported that Nigerian banks' 2018 profits will decline due to the Federal Government's reduced treasury bill issuance in 2018. The analysis highlights a significant drop in net T-bill issuance as observed in the first quarter's CBN calendar.

The Central Bank of Nigeria's first-quarter 2018 data shows N1.1 trillion in rollovers versus N1.3 trillion maturing bills, representing a N200 billion shortfall in new T-bill issuance compared to 2017.

Despite these challenges, larger banks like GTB, Zenith, UBA, Access, and FBNH maintain relatively strong operating returns, with FBNH showing improvement in its ROAE metrics.

Fitch Ratings identified that Nigerian banks' 2018 profit margins will decrease because the Federal Government reduced treasury bill issuance in 2018.

The Central Bank of Nigeria reported N1.1 trillion in first-quarter 2018 rollovers versus N1.3 trillion maturing bills, indicating a N200 billion shortfall in new T-bill issuance compared to 2017.

Larger banks such as GTB, Zenith, UBA, Access, and FBNH maintain stronger operating returns, with FBNH showing improving ROAE metrics despite the challenges.