The public spat between Nestoil Limited and three of Nigeria’s systemically important banks – Access, First Bank, and UBA – lays bare a hard truth about credit in Nigeria: when a debt gets too big, the lender often ends up at the mercy of the borrower. For days in May 2026, Nestoil ran paid advertorials in national newspapers accusing the banks of scapegoating it for their failure to pay dividends in 2025. The tone was personal, hostile, and aimed at intimidating rather than resolving a ₦2.9trn syndicated loan that has gone bad.
At the center of the dispute is a syndicated facility taken during a period of high oil production expectations. When those projections collapsed, the loan turned non-performing. Nestoil disputes the ₦2.9trn figure, arguing it never borrowed $2bn. But that misses the point. In banking, unpaid debt accrues interest and penalty charges. If the facility was duly documented and approved by Nestoil’s board, the outstanding balance reflects contractual terms the borrower accepted. The money lent was not the banks’ to lose – it belonged to depositors. Refusing to service it creates a chain reaction of impairment charges, regulatory breaches, and dividend suspensions that damage confidence in the system.
The fallout is already visible. The CBN barred banks with NPLs above 5% from paying dividends unless they fully provision for bad loans. UBA booked ₦331bn in loan loss provisions, Access Holdings’ impairment charges rose 209% to ₦287.3bn, and First Bank faced similar hits. Total impairment charges across five lenders hit roughly ₦2.16trn. The result: dividend suspensions for 2025 and a hit to shareholder returns. Nestoil’s response has been to deny the debt, attack the banks’ risk management, and warn media houses against publishing the banks’ side of the story. That is a textbook debtor strategy – shift blame, intimidate staff, tie the bank up in legal battles, and make collection costly enough that the lender accepts a haircut.
This is not new. Nigerian banking history is littered with oil and gas loans that went bad and nearly sank institutions. First Bank nearly collapsed in the mid-2000s due to exposure to another oil firm. The difference now is scale. Oil and gas lending stood at ₦21trn at the end of 2024. Nestoil alone accounts for ₦2.9trn of that exposure across multiple lenders. In October 2025, the Federal High Court issued a Mareva injunction freezing Nestoil and Neconde Energy’s assets across 20 financial institutions and appointed a receiver/manager. Yet the company continues to fight both the debt amount and the legal process in the public domain.
What makes this debacle dangerous is the power dynamic it reveals. A borrower that cannot pay resorts to reputational warfare, accusing banks of incompetence while questioning why they are building headquarters in Eko Atlantic. The goal is clear: make collection so messy, expensive, and damaging that the banks settle for less. It is a tactic that works only where rule of law is weak and reputational risk outweighs commercial logic.
The CBN is right to insist on full provisioning and to keep NPLs below 5% before dividends resume. That rule forces banks to confront bad debt rather than hide it. But regulation alone cannot fix a culture where borrowers treat credit as risk-free capital. If Nestoil’s case drags on for years, as it likely will, it will reinforce a bad precedent: borrow big, default, then turn public relations into a shield.
For the banking system, the lesson is blunt. Big ticket lending to cyclical sectors like oil and gas requires stricter collateral, tighter monitoring, and faster enforcement. For borrowers, the lesson should be equally clear: when you take a bank’s money, you are using depositors’ money. Turning into a tormentor-in-chief when the bill comes due does not erase the debt – it only deepens the damage to the system you rely on.
