The naira’s sharp depreciation between 2023 and 2024 significantly increased the contribution of foreign subsidiaries to the earnings and asset bases of Nigerian banking groups, Fitch Ratings has said.
The rating agency disclosed this in a report titled African Banking Groups’ Cross-Border Expansion to Continue, published on September 14, 2026. The report examined 14 African banking groups operating in at least five African countries, with combined assets of more than $15 billion as of December 2025.
Four Nigerian banks—Access Bank Plc, United Bank for Africa Plc, Zenith Bank Plc and First HoldCo Plc—were included in the assessment.
UBA leads foreign earnings contribution
Fitch said the contribution of foreign subsidiaries to African banking groups had increased steadily over the past decade, with the trend accelerating after the COVID-19 pandemic as banks pursued growth and geographic diversification.
For Nigerian banks, the agency linked the increase partly to the roughly 70% devaluation of the naira between 2023 and 2024.
Foreign subsidiaries contributed 77% of UBA’s net income in 2025, up from 44% in 2024. They also accounted for 52% of the group’s total assets at the end of 2025.
Fitch, however, noted that UBA’s higher foreign earnings contribution was partly influenced by weaker domestic performance during the year.
Access Bank also recorded significant growth in the contribution of its overseas businesses. Foreign subsidiaries accounted for 48% of group net income in 2025, compared with 30% in 2021.
Their share of the bank’s total assets also increased to 51% in 2025, from 23% four years earlier.
Access Bank expands aggressively
Fitch described Access Bank as the African lender with the fastest pace of cross-border expansion in recent years.
The bank’s expansion has been driven by acquisitions designed to build a network of subsidiaries capable of capturing trade and financial flows across sub-Saharan Africa.
One of its most significant transactions was the acquisition, completed in July 2025, of a 76% stake in Mauritius-based AfrAsia Bank Limited.
AfrAsia had an estimated balance sheet of $6.9 billion at the end of 2025, equivalent to about 19% of Access Bank’s consolidated assets at the time.
Fitch, however, said Access Bank had recently breached a regulatory limit restricting investments in foreign subsidiaries to 10% of shareholders’ funds. The breach has affected dividend payments, while the bank is expected to restore compliance partly by reducing its shareholding in some overseas subsidiaries.
Zenith deepens East African presence
The report also highlighted Zenith Bank’s acquisition of Kenya’s Paramount Bank in April 2026.
Fitch said the transaction formed part of a broader push by Nigerian and South African banks to expand into East Africa.
Zenith Bank also launched a subsidiary in Côte d’Ivoire as it seeks to strengthen its presence in Francophone West Africa.
The bank’s 2025 financial results showed the growing importance of its international operations. Its foreign subsidiaries generated N331.7 billion in pre-tax profit, representing 26.3% of group earnings.
This was an increase from N179 billion, or 13.5% of group earnings, in 2024.
Customer deposits across Zenith’s subsidiaries in Ghana, the United Kingdom, Sierra Leone and The Gambia rose to N6.7 trillion in 2025, accounting for 27.8% of total group deposits.
The figure compared with N5.3 trillion, or 24.2% of group deposits, in the previous year. Zenith Bank UK accounted for the largest share, with deposits of N3.6 trillion.
New capital to support expansion
Fitch said Nigerian banks had raised substantial capital over the past two years to meet higher paid-in capital requirements that took effect at the end of the first quarter of 2026.
Although some of the funds were used to absorb losses following the withdrawal of regulatory forbearance on loan classification, many banks continued to maintain capital adequacy ratios above 20%.
The agency expects part of the new capital to be used to strengthen existing foreign subsidiaries and finance further expansion across Africa.
Fidelity Bank Plc and First City Monument Bank were among the lenders identified by Fitch as having raised significant capital relative to their balance sheets.
The agency said the two banks raised funds partly to retain their international banking licences despite having relatively small operations in the United Kingdom. It expects them to deploy some of the capital towards expanding their African operations.
Sovereign risk remains a concern
Despite the rising importance of foreign subsidiaries, Fitch said the ratings of African banking groups remained closely tied to the creditworthiness of their home countries.
None of the banking groups covered by the agency, including Nigerian lenders, currently has a Viability Rating or Long-Term Issuer Default Rating above that of its domestic sovereign.
Fitch said Nigerian banks remained particularly exposed to sovereign risk because of the sizeable cash reserves they hold with the Central Bank of Nigeria. It added that these exposures were not fully captured by conventional risk metrics.
However, the rating agency expects continued geographic diversification to gradually reduce the banks’ sensitivity to domestic economic conditions and sovereign risks over the medium term.
