Wema Bank Plc has received a major boost to its reputation after global rating agency Fitch Ratings upgraded the bank’s long-term credit rating, citing stronger capital reserves, improved profitability, and steady business growth.
The agency raised Wema Bank’s Long-Term Issuer Default Rating (IDR) from ‘B-’ to ‘B’, while also upgrading its Viability Rating and National Long-Term Rating. Fitch assigned the bank a Stable Outlook, indicating confidence that the lender can maintain its current financial strength in the near future.
According to Fitch, the upgrade reflects the positive impact of Wema Bank’s successful capital-raising efforts in 2025, as well as stronger earnings performance. These improvements have strengthened the bank’s ability to support future expansion and manage risks associated with rapid growth.
The rating agency noted that Wema Bank’s progress has been driven largely by its growing market presence, strong profitability, improved asset quality, and healthier capital position. Although the bank remains smaller than some of Nigeria’s leading lenders, it has continued to gain ground through strategic expansion and innovation.
A key factor behind the positive assessment is the bank’s leadership in digital banking. Fitch highlighted that Wema Bank’s digital platforms have helped attract more customers and deposits while reducing dependence on expensive fixed-term deposits. This has strengthened the bank’s funding structure and improved overall efficiency.
The agency also pointed to a more stable operating environment in Nigeria’s banking sector. Improved foreign exchange liquidity, stronger profitability across banks, and successful capital-raising activities have helped increase resilience within the industry.
However, Fitch cautioned that challenges still exist. High inflation, regulatory pressures, and rising levels of non-performing loans across the banking sector remain concerns that financial institutions must continue to manage carefully.
Despite these challenges, Wema Bank recorded notable improvements in several key performance indicators. The bank’s impaired loan ratio fell from 4.9 percent at the end of 2025 to 4.2 percent in the first quarter of 2026. This decline reflects better loan quality and continued growth in lending activities.
The bank also reduced its exposure to large borrowers. Its top 20 funded loan exposures represented 31 percent of total loans at the end of 2025, down significantly from 41 percent a year earlier. Fitch viewed this as a positive development in risk management.
Profitability showed remarkable growth during the review period. Operating profit relative to risk-weighted assets increased to 11.2 percent in 2025, compared with 8.3 percent in 2024. Net interest income more than doubled, helping to boost earnings and strengthen the bank’s financial position.
One of the biggest contributors to this improvement was the bank’s N200 billion capital-raising programme, including a N150 billion rights issue completed in September 2025. This significantly increased Wema Bank’s capital buffer and enhanced its ability to absorb potential shocks.
As a result, the bank’s core capital ratio rose sharply to 30 percent by the first quarter of 2026, compared with 18.7 percent at the end of 2024. Its Capital Adequacy Ratio also stood comfortably above regulatory requirements.
Funding stability improved as well. Dependence on costly term deposits dropped substantially, while deposit concentration declined, reducing funding risks. The bank also maintained strong foreign currency liquidity levels.
The latest rating upgrade highlights growing confidence in Wema Bank’s financial health and long-term strategy. With stronger capital, rising profits, and continued investment in digital banking, the lender appears well-positioned to expand its influence within Nigeria’s competitive banking industry while delivering greater value to customers and investors alike.
