Ecobank faces N537bn bad-loan burden after 50% surge

THE bad-loan book of Ecobank Transnational Incorporated climbed by 50 percent in the 2025 financial year, according to the bank’s 2025 annual report seen by Economy Post.

This shows on the bank’s impairment losses on loans and advances in 2025, which rose to N536.76 billion, up from N358.071 billion reported in the corresponding period of 2024. This may raise the credit risk of the bank and affect its asset quality, financial experts say.

An impaired loan is one that is not performing according to the original terms of the agreement. This is usually because the borrower has financial difficulties with their payments, says Cowrywise.

Banks generally make provisions for impairment losses if they suspect that some of their borrowers cannot repay the loans at the agreed time. Loan impairment is a critical concept in accounting and financial reporting. It refers to the recognition of a reduction in the value of a loan or portfolio of loans due to a decline in the borrower’s ability to repay, Diversification.com explains.

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“When it becomes probable that a lender will not collect all amounts due according to the contractual terms of a loan, that loan is considered impaired. This process is essential for banks and other financial institutions to accurately reflect the true value of their financial assets on their balance sheet and in their financial statements. Properly assessing loan impairment is fundamental to managing credit risk and ensuring financial stability,” it adds.

Ecobank revenue, profits

Ecobank’s revenue increased by 14 percent to N4.817 trillion in 2025, from N4.208 trillion reported in the corresponding period of 2024. The pan-African bank’s profit after tax jumped 29 percent to N950.003 billion in 2025, from N735.897 billion reported in the previous year. On a quarterly basis, profit before tax fell to N264.5 billion in the fourth quarter (Q4) 2025 from N274.3 billion in Q4 of 2024.

Net interest income rose 22 percent year on year to N2.13 trillion, driven by improved yields on loans and advances to customers (N1.3 trillion). Non-interest revenue increased by 13 percent to N1.53 trillion, a sign of growth in fee and commission income as well as trading and foreign exchange gains.

The financial statement further shows that Ecobank grew assets to N49.439 trillion, from N43.303 billion in 2024, which means the impairment losses had little impact on the loans. Liabilities stood at N45.270 trillion, from N40.522 trillion in 2024. This means the bank has a positive net equity, implying that proceeds from the sale of the bank’s assets can clear debts, with some left over.

Deposits from customers rose 15 percent to N36.44 trillion, up from N31.636 trillion in 2024. Total equity stood at solid N4.169 trillion, representing a 50 percent increase from N2.780 trillion reported in 2024. Total equity is the value left in the company after subtracting total liabilities from total assets. This is often what is keft for shareholders if a business liquidates, financial experts say.

Ecobank Group is a private pan-African financial services group with African expertise. Present in 34 sub-Saharan African countries, as well as France, the United Kingdom (UK), the United Arab Emirates (UAE) and China, its unique pan-African platform provides a single gateway for payments, cash management, trade and investment. The group employs over 14,000 people and offers consumer, commercial, corporate and investment banking products, services and solutions across multiple channels, including digital, to over 32 million customers.

First Holdco case

Economy Post earlier reported First Holdco’s income statement, which revealed that the company suffered N748.125 billion impairment loss for the whole of 2025 and N459.206 billion for the last quarter of 2025. This, in simple terms, means that loans had been granted to entities to the tune of N748.125 billion but they did not repay them. As a result, Nigeria’s oldest bank decided to write them off within a year.

Hence while First Holdco’s stood at N748.125 billion in 2025, Ecobank’s were put at N537 billion, which is equally significant. Businesses generally struggle to repay loans for several reasons ranging from financial and economic difficulties to lack of cash flow. In Nigeria, some wealthy individuals borrow from banks – with a belief that they won’t repay – some financial experts said.

The banking sector impairment charges have been on the rise in the banking sector. Eight Nigeria’s largest banks set aside a combined N1.96 trillion in the first nine months of 2025 as impairment charges to cover potential loan losses.

This represented nearly 50 percent increase from about N1.32 trillion reported in the same period of 2024.

Ecobank’s spokesperson, Mr Austin Osokpor, did not respond to Economy Post‘s enquiries bordering on why the bank’s impairment losses rose in 2025.