Banks’ Non-Performing Loans Rise by N333 Billion

The non-performing loans in the banking sector rose by N333bn as of the end of the third quarter of 2020 to N1.5tn at the end of 2020.

These were as by statistics obtained by our correspondent from the Central Bank of Nigeria and the National Bureau of Statistics.

Figures obtained from the CBN showed that the non-performing loans rose to 6.01 per cent of the total loans to the economy which stood at N25.02tn as of the end of 2020.

The NBS’s latest report on the banking sector revealed that the total amount of non-performing loans in Nigerian banks stood at N1.17tn as of Q3 2020.

According to the CBN, despite the increased lending and rise in non-performing loan during the coronavirus pandemic, the banking system had remained stable.

Figures obtained from the CBN showed that the non-performing loans rose to 6.01 per cent of the total loans to the economy which stood at N25.02tn as of the end of 2020.

The CBN stated that there was, “a marginal increase in the non-performing loans ratio which rose to 6.01 per cent at end-December 2020 from 5.88 per cent at end-November 2020 and above the prudential maximum threshold of five per cent.”

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While noting that this development was not unexpected under the prevailing circumstances, it emphasised the need to strengthen macro prudential framework to bring non-performing loans below the prescribed benchmark.

The CBN stated that banking sector’s gross credit as of the end-December stood at N25.02tn compared with N24.25tn at the end of November 2020, representing an increase of N774.28bn.

It noted that it had been able to maintain a sound regulatory surveillance over the banking system by ensuring a reasonably low level of non-performing loans, even with the aggressive credit expansion programme during the COVID-19 pandemic crisis period.

Though non-performing loan remained slightly above the prudential benchmark, it stated that the banking system remained stable.

Given the success recorded under the Loan to Deposit Ratio policy, it stressed the need to sustain risk surveillance approach and ensure the continued soundness of the banking system.