Short-Term Financing Dominates Globus Bank Loan Book – Fitch
GLOBUS BANK: With less than 1% of the banking industry’s market share, short-term working capital financing accounted for the largest share of Globus Bank Limited’s loan book, Fitch said in a rating note.
In its recent report, Fitch Ratings assigned Nigeria-based Globus Bank Limited a Long-Term Issuer Default Rating (IDR) of ‘B-‘ with a Stable Outlook.
Also, Fitch assigned Globus Bank Limited a Viability Rating (VR) of ‘b-‘ and a National Long-Term Rating of ‘BBB(nga)’ with a stable outlook. Globus Bank’s Long-Term IDR is driven by its standalone creditworthiness, as expressed by its VR.
The VR captures the concentration of the bank’s operations in Nigeria’s challenging operating environment, its modest domestic market share, a record of rapid growth and an unseasoned loan book.
The VR also reflects good asset quality and profitability metrics, as well as adequate capital buffers, which will be flattered by continued rapid growth in the medium term. The VR is one notch below the ‘b’ implied VR, reflecting the bank’s small franchise and evolving business model.
Globus Bank’s National Long-Term Rating of ‘BBB(nga)’ also reflects its small domestic franchise, a record of rapid growth and an unseasoned loan book, balanced by good financial profile metrics.
The Nigerian naira exchange rate stabilised in 2025, the banking sector’s profitability and foreign-currency (FC) liquidity have been improving and capital raisings have boosted capitalisation.
However, inflation remains high, regulatory intervention is burdensome and the expiry of forbearance on oil and gas loans has led to an increase in sector impaired loans ratios (Stage 3 loans under IFRS 9) and prudential provisions.
Globus Bank has a small market share, representing 1% of domestic banking system assets, which constrains its pricing power. The bank combines traditional banking with digital acquisition channels, supporting fast balance-sheet growth.
As a challenger bank, Globus Bank has been growing much faster than the sector average in recent years. However, its loan book was small as a percentage of total assets at 27% at the end of 2025, dominated by short-term working-capital financing.
The bank’s risk profile is conditioned by large investments in Nigerian debt securities, which were about half of total assets at end-2025.
Globus Bank’s loan quality metrics have been sound, with zero impaired loans reported in 2025 and Stage 2 loans accounting for a small 3% of gross loans.
“We expect the bank to continue reporting sound loan-quality metrics in the medium term, although a modest increase in the impaired loans ratio is likely due to the loan book seasoning.”, Fitch said.
Ratings analysts said operating profit-to-risk-weighted assets (RWA) ratio was a high 10% in 2025, supported by wide net interest margin, strong non-interest income and low RWA density.
“We expect profitability metrics to remain strong in 2026, albeit lower than in 2025, reflecting normalisation after fast growth”.
The FCC ratio was a high 23.7% at the end of 2025, but ratings analysts said this should be viewed in light of fast balance-sheet growth.
Globus Bank finalised capital raising intended to comply with the higher paid-in capital requirement in 1Q26, and analysts expect the FCC ratio to remain high in 2026 before declining in 2027 as RWA growth remains strong.
Customer deposits dominated Globus Bank’s funding profile, accounting for 93% of total funding in 2025, and were mainly sourced from corporate customers (80% of the total).
Local-currency (LC) liquidity is mainly in the form of investments in debt securities, while FC liquidity is represented by cash, short-term interbank placements and investments in Nigerian Eurobonds. Liquidity coverage of customer deposits is good in both LC and FC, Fitch said.
