The Central Bank of Nigeria’s (CBN) bid to take management of the nation’s fixed-income market has triggered regulatory controversies in Nigeria’s monetary sector.
Whereas the apex bank insists the transfer will improve transparency and effectivity, analysts and market operators warn that it dangers upsetting the stability between financial coverage oversight and capital market regulation.
Behind this institutional pressure lies a revealing information level: Nigeria’s top-tier banks, additionally known as the FUGAZ group (First HoldCo, UBA, GTCO, Entry Corp, Zenith), collectively invested N49.152 trillion in Securities and Treasury payments placements, in line with the monetary statements filed with the Nigerian Alternate (NGX) Group.
Inside simply 9 months of 2025, the FUGAZ group poured N6.948 trillion in Securities and Treasury payments, 16.5% enhance over N42.204 trillion the banks had invested as of December 2024.
Nairametrics Analysis findings present that curiosity revenue from the funding securities stood at N4.8 trillion in 9 months of 2025, in contrast with N3.6 trillion within the corresponding interval of 2024.
Banks’ hovering earnings from funding securities
A more in-depth take a look at the banks’ monetary statements for the nine-month interval ended September 30, 2025, reveals how dominant the fixed-income phase has develop into as a supply of revenue for Nigerian lenders.
With a reported mixed complete of N49.152 trillion invested in securities and treasury payments, the main banks embody Entry Company with N15.25 trillion; UBA with N13.59 trillion; Zenith Bank with N9.05 trillion; First HoldCo with N6.35 trillion; and GTCO with N4.91 trillion. These investments generated returns as follows:
- Entry: N1.3 trillion
- Zenith: N1.14 trillion
- UBA: N1.03 trillion
- FBN HoldCo: N720.15 billion
- GTCO: N570.234 billion
These figures underscore how a lot banks depend on sovereign debt devices and CBN-backed placements, fairly than riskier private-sector lending, to generate returns.
The pattern displays a broader shift in banking habits, from credit-driven development towards passive revenue by authorities securities, pushed by excessive yields and macroeconomic uncertainty
Mortgage-to-Deposit Ratios reveal conservative lending
Loans-to-deposit information from the identical banks present a deliberate retreat from aggressive lending regardless of surging deposits.
- Zenith Bank’s loans and advances rose to N9.37 trillion, however its loan-to-deposit ratio dropped from 43% to 40%, displaying threat aversion amid foreign money volatility and credit score threat considerations.
- Entry Company, in the meantime, expanded loans by almost 20% to N15.64 trillion, but its ratio remained static at 41.2%.
- UBA’s lending portfolio grew marginally to N7.49 trillion, with the loan-to-deposit ratio slipping from 28.7% to twenty-eight.2%, whilst deposits climbed 7.7% to N26.54 trillion.
- GTCO elevated lending by 16.12% from N2.79 trillion in December 2024 to N3.24 trillion in September 2025, however the Group’s mortgage to deposit ratio grew by solely 3.72% regardless of a 16.0% development in customer deposits in 9 months to N12.06 trillion, up from N10.40 trillion in similar interval in 2024.
- In distinction, First HoldCo elevated lending by 11.53%, to N13.46 trillion, elevating its loan-to-deposit ratio from 60% to 68%. This divergence means that whereas First HoldCo is pushing into credit score markets, friends favor the safety of presidency money owed at various levels.
CBN’s plan
In a latest round issued late September 2025, the CBN introduced plans emigrate fastened revenue buying and selling and settlement features from the FMDQ Securities Alternate — regulated by the Securities and Alternate Fee (SEC) — to its personal Actual-Time Gross Settlement (RTGS) and Scripless Securities Settlement System (S4). This coverage shift is anticipated to kick off this November, barring last-minute reversals.
The transfer would successfully make the CBN each operator and regulator of Nigeria’s fixed-income market infrastructure, consolidating management of presidency bond and Treasury invoice issuances underneath one roof.
Supporters say the reform might improve transparency, cut back underreporting, and democratise entry by ending what many describe as FMDQ’s monopoly over the market. Critics, nevertheless, warn that the plan might represent regulatory overreach and commercialisation in violation of the CBN Act and the Investments and Securities Act (ISA) 2025.
Regulatory tensions and authorized loopholes
Analysts and authorized specialists argue that whereas the CBN Act permits the Bank to advertise fee and settlement programs, it doesn’t authorise it to function a securities buying and selling venue.
The ISA 2025 provides unique regulatory authority over securities markets and buying and selling platforms to the SEC, not the central bank, analysts argue.
Dr. Akin Olaniyan, CEO of Lagos-based Charterhouse Restricted, mentioned, “If CBN implements its deliberate takeover with out SEC oversight, the transfer might create twin regulation, confuse market members, and undermine confidence in Nigeria’s market governance framework.”
Critics like pioneer Registrar of the Institute of Capital Markets Registrars (ICMR), Dr. Walker Ogogo, additionally famous that “the CBN’s involvement in buying and selling, settlement, and financial coverage might create conflicts of curiosity and ship flawed sign to overseas buyers,” particularly because the CBN already owns about 16% fairness in FMDQ, a construction initially designed to advertise collaboration fairly than competitors.
Market reactions
Market operators stay divided. David Adonri, CEO of Highcap Securities Restricted, agrees that the CBN is statutorily empowered to handle the first marketplace for authorities securities however not the secondary market, which falls underneath SEC’s jurisdiction.
- In accordance with Adonri, the CBN’s new buying and selling platform will probably deal with main market actions — auctions for Treasury Payments and Federal Authorities bonds — whereas secondary market buying and selling ought to stay underneath FMDQ and the NGX.
He recommended that dissatisfaction with FMDQ’s commerce transparency and reporting requirements might have triggered the CBN’s transfer, saying, “The CBN seems now not snug with how FMDQ executes its trades. That is about gaining visibility and management.”
- Equally, Tajudeen Olayinka, CEO of Wyoming Capital and Securities Restricted, views the reform as a step towards better information integrity and accountability. He mentioned the CBN might create an interface between its platform and present exchanges, making certain market liquidity whereas enhancing oversight.
“What they’re doing might even carry extra transparency as a result of at the moment, the info from FMDQ should not effectively captured or are underreported,” Olayinka noticed.
Presently, FMDQ has unique entry to the CBN’s S4 system, making it the dominant platform for buying and selling and settlement of presidency securities.
Analysts imagine that when the CBN launches its proprietary system, each FMDQ and NGX will acquire equal entry to S4, thereby “democratising” the fastened revenue house.
“The event might take away the undue benefit beforehand loved by FMDQ,” Adonri mentioned, “permitting for higher value discovery and wider investor participation.”
The CBN’s reform, although doubtlessly transformative, checks the bounds of its authorized authority and the independence of Nigeria’s capital market establishments. Its success will rely on transparency, collaboration, and regulatory alignment with the SEC.
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