Fitch Ratings has affirmed Nigeria-based Bank of Industry Limited’s (BOI) credit or Long-Term Issuer Default Rating (IDR) at ‘B’ and its National Long-Term Rating at ‘AAA(nga) with a stable outlook. The global ratings agency said BOI’s IDRs are driven by potential support from the authorities in Nigeria, as reflected by its Government Support Rating (GSR) of ‘b’ and are equalised with the country’s ratings. According to Fitch, the stable outlook on BOI’s credit rating mirrors that on the sovereign. BOI’s national long-term rating is the highest attainable rating on Nigeria’s national scale, reflecting potential support from the sovereign. Nigeria’s long-term IDRs were upgraded to ‘B’ on 11 April 2025, as the exchange rate has stabilised, profitability and foreign-currency (FC) liquidity have improved, and capital raisings are driving a recovery in the bank sector’s capitalisation.
However, inflation remains high, regulatory intervention burdensome, and expiring forbearance on oil and gas loans will lead to an increase in impaired loans (Stage 3 loans under IFRS 9) ratios and prudential provisions. As Nigeria’s main development bank, BOI’s mandate includes financing the country’s industrial sector and promoting financial inclusion and employment. In May 2025, the Federal Executive Council approved the ‘Nigeria First’ policy, aimed at strengthening the economy, prioritising local industries and boosting the country’s industrial transformation.
This includes targeted funding for entrepreneurs and micro, small and medium-size enterprises, of which N50 billion for grants, N75 billion for MSMEs, and N75 billion for manufacturing, will be channelled through the bank. BOI provides low-cost, long-term financing to micro, SMEs and corporates through direct customer loans and customer loans granted at preferential rates and guaranteed by domestic banks.
The bank’s strategy is linked to public policy, including the country’s industrialisation and import-substitution initiatives. The ‘Nigeria First’ economic policy will provide big growth opportunities for BOI. Given its development mandate, BOI targets some vulnerable segments of the economy. The bank lends to priority and emerging sectors typically underserved by other financial institutions. Nevertheless, adequate underwriting standards and risk controls mitigate risks associated with this type of lending as reflected in BOI’s sound asset quality metrics.
BOI’s Stage 3 loans ratio remains well below the sector average of around 5%, despite targeting vulnerable segments of the economy. Fitch analyst view reserve coverage of Stage 3 loans as reasonable, while the loan book is highly collateralised. Profitability is healthy, despite not being a key objective for BOI. In 2024, return on equity improved from 2023, driven by strong gains on derivatives and lower impairment charges. The net interest margin compares favourably with that of commercial banks, as its lower funding costs offset lower loan yields.
BOI maintains high capital ratios, which Fitch views as necessary for its policy role in the challenging domestic operating environment. Good internal capital generation helps reduce reliance on capital support from the state. BOI is mainly funded by borrowings sourced from the Central Bank of Nigeria and development finance institutions, all guaranteed by the state. At the end of 2024, most of the bank’s funding was guaranteed by the government. Fitch said the authorities in Nigeria have a high propensity to support BOI, given its 99.9% state ownership and well-established and clearly defined policy role. Also, most of the bank’s borrowings were guaranteed – directly and indirectly – by the state at the end of 2024. Nevertheless, Fitch views the authorities’ ability to support BOI as limited, as indicated by Nigeria’s ‘B’ Long-Term IDR.
