S&P Sees Egypt And Nigeria Banks’ Profits Shrink In 2026 As Rate Cuts Hit Margins
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Looser policy will compress net interest margins despite favourable loan growth and improving asset quality from macroeconomic recovery, S&P said.
Egypt’s CBE cut rates by 725bps to 20% in 2025 as inflation fell from 24.1% to 12.3%; Nigeria’s CBN delivered a cautious 50bps trim to 27% (still continental high) after CPI eased from 34.8% to 15.5%.
Nigeria’s sector grapples post‑record 2024 gains with regulation, capital hikes and forbearance withdrawal; H1 2025 saw GTCO profits halve, Zenith dip 7.9% to $372m, First Bank impaired $490m (93% profit wipeout).
Asset quality risks linger, especially Nigeria’s 50% FX loans and oil/gas exposure; Morocco/Tunisia face NPL legacies, while South Africa benefits from incomes/inflation relief.
50% of S&P’s 22 rated African banks have positive outlooks (Nigeria/SA lead), with 10 upgrades in 2025 on capital/conditions; earnings capped at sovereign levels.
Growth projected at 4.5% continentally (Egypt/Morocco/Nigeria robust, SA modest, Tunisia weak).
