CBN 2025 Annual Report: Reform Wins on the Surface, Balance Sheet Truths Lurk Beneath

The Central Bank of Nigeria’s 2025 Annual Report reads like a redemption note. After years of reporting gaps and heterodox policy experiments, the Bank has published a full account that ties audited numbers to policy decisions. Governor Olayemi Cardoso calls 2025 the year reforms “began to yield measurable results.” On paper, he has a case.

Inflation fell sharply to 15.15% in December 2025 from 34.80% a year earlier. The naira appreciated to N1,435.76/$, reserves rose to $45.75bn — 8.8 months of import cover. Capital importation nearly doubled to $23.4bn. Nigeria exited the FATF Grey List. GDP growth ticked up to 3.87%. The NGX rallied 51.19%. Payments data also boomed: e-payment value hit N4,360.33tn, MMO transactions jumped 66% to 28.74bn.

For the first time in a long while, orthodox monetary policy — tighter rates, FX market reforms, EFEMS, NRBVN — looks like it is transmitting.

But an annual report is not just a scorecard. It is also a confession. And the CBN’s confession comes in the banking sector section, where stability and risk sit side by side.

1. The Recapitalisation Victory Has an Asterisk
The report celebrates the conclusion of the banking recapitalisation programme. Capital bases are stronger. Yet prudential ratios moved the wrong way. Industry NPL ratio climbed to 7.51%, breaching the 5.00% benchmark. Capital Adequacy Ratio fell to 12.35% from 15.25%.

The CBN blames the expiry of COVID-era forbearance in June 2025. That is true, but it is also revealing. Forbearance masked weak loans. Now that banks must classify assets under normal rules, the true credit quality is showing. This is the cost of “orthodoxy”: you get transparency, but you also get pain. The question for 2026 is whether banks can lend more with their new capital without repeating the cycle. If they chase growth to justify recapitalisation, asset quality could deteriorate further.

2. Disclosure is Back, But Consistency is the Test
Publishing a full Annual Report after criticism over gaps is a governance win. It restores a link between policy, operations, and accountability. The report also shows the CBN flexing its consumer protection muscle: 23,129 complaints received, N19.12bn and $329.3m refunded, and N1.69bn in penalties imposed for breaches and delays.

However, one report does not make a culture. The CBN itself notes the need for “greater consistency in reporting timelines, data reconciliation, methodological explanation.” Markets and investors will watch if 2026 comes on time, and if the numbers reconcile with NDIC, FIRS, and fiscal data. Institutional credibility is built by repetition, not by a single release.

3. External Gains, Internal Fragilities
The external sector story is the cleanest. FX reforms, reserves build-up, and diaspora tools like NRBVN are working. Exiting the FATF Grey List matters for investment flows.

Internally, the fragility is credit. With consumer credit contracting by almost 20% and NPLs rising, the banking system is deleveraging households while trying to support growth. AMCON’s continued wind-down — assets down 29.76% to N1.29tn, N2.54tn recovered cumulatively — shows the state is still paying for past banking crises. The risk is that we solve yesterday’s bad loans just as new ones form under tighter money.

4. The Digital and Inclusion Dividend
The bright spot beyond macro is structural. BVN enrolment hit 67.82m, linked accounts jumped to 368.92m. Fraud surveillance is also sharper, with watchlisted BVNs rising to 13,117. This reflects better data, not just more fraud. Mobile money and PAPSS rollout point to a payments system that can actually drive inclusion and regional trade. If sustained, this is where CBN policy will have the longest legacy.

Bottom Line: From Stabilisation to Durability
The 2025 report confirms that Cardoso’s CBN has pulled Nigeria back from macro instability. Inflation is down, FX is more orderly, reserves are stronger, and disclosure is restored. Those are not small wins.

But the report also signals the next phase of work. Banking sector resilience can no longer be assumed from capital alone. With NPLs above prudential limits and CAR falling, supervision must shift from compliance to deep asset quality review. Earnings durability, provisioning, and sectoral concentration will determine if recapitalisation was real or cosmetic.

For the CBN, 2025 was about restoring credibility. 2026 will be about proving durability. That means keeping monetary discipline without choking credit, keeping banks honest as forbearance ends, and keeping disclosure regular.

The reforms have delivered results. Now they must deliver a financial system that can survive without them.