Banks Lose ₦7.3tn Foreign Asset Cushion as Domestic Claims Surge

Nigeria’s banking sector saw a dramatic shift in its balance sheet composition in the first quarter of 2026, as net foreign assets dropped by ₦7.30 trillion while net domestic assets climbed by ₦4.25 trillion, according to the Central Bank of Nigeria’s (CBN) Q1 2026 Statistical Bulletin.

Net foreign assets fell from ₦30.88 trillion at the end of December 2025 to ₦23.58 trillion by March 2026, marking a 23.64% contraction within the quarter. In contrast, net domestic assets increased from ₦95.94 trillion to ₦100.19 trillion, representing a 4.43% rise.

This divergence highlights a significant reallocation of assets within Nigeria’s depository corporations, with an increased focus on domestic claims as foreign asset positions weakened.

The growth in domestic assets was driven in part by higher net claims on government, which rose from ₦37.59 trillion in December 2025 to ₦40.63 trillion in March 2026—an increase of ₦3.05 trillion, or 8.10%. Claims on the private sector also expanded, rising from ₦51.85 trillion to ₦54.34 trillion, an increment of ₦2.49 trillion, or 4.80%.

Despite the expansion in domestic claims, broad money liabilities actually declined from ₦126.82 trillion in December 2025 to ₦123.77 trillion in March 2026—a 2.40% decrease. This suggests the balance sheet movement was not simply a broad-based expansion of liquidity but rather a notable shift in the composition of assets and liabilities.

The CBN’s Depository Corporations Survey, which consolidates accounts from the central bank and other financial institutions, provides an aggregate view of these monetary developments.

As a result, the Q1 figures reveal a banking system that entered the second quarter with a much smaller net foreign asset cushion, but with increased domestic claims, especially on government and the private sector. The ₦7.30 trillion contraction in net foreign assets far outpaced the ₦4.25 trillion growth in net domestic assets, underscoring the scale of the shift in balance sheet composition.

Overall, the data places renewed emphasis on the domestic side of the financial system, where both government and private sector claims continue to rise even as foreign asset holdings diminish.