Banks record N1.21 trillion in non-performing loans

Total non-performing loans in the banking sector reached N1.21 billion at the end of February 2022, figures obtained from the Central Bank of Nigeria have revealed.

The CBN said in reports obtained from the Monetary Policy Committee that total credit in the sector increased to 25.25 billion naira at the end of February 2022 from 21.13 billion naira at the end of February 2021.

He said the non-performing loans reflected the case-by-case review of regulatory forbearance, the effects of the global standing instructions policy and industry best risk management practices.

MPC member Kingsley Obiora said the banking system has maintained its resilience amid the economic recovery.

He said: “Overall, industry credit increased by 19.53% to N25.25n in Feb 2022 from N21.13n in Feb 2021. The industry NPL ratio continued to trend. below the prudential threshold of 5%.

“It fell to 4.80% at the end of February 2022 from 6.38% in February 2021. The downward trend is attributable to collections, restructuring of facilities and good management practices of DMBs (Deposit Money Banks). ”

Deputy Governor, Financial Systems Stability Directorate, CBN, Aishah Ahmad said, “Total credit also increased by N4.13 billion between end-February 2021 and end-February 2022 with significant credit growth to manufacturing, general trade and oil and gas sectors. .”

She added that the non-performing loan ratio declined further to 4.8% in February 2022 from 4.94% in December 2021.

MPC member Robert Asogwa said that the financial sector remained strong, as in the last MPC meeting, especially with regard to developments in banking and capital markets.

He said the banking sector appeared strong and resilient with a significantly high capital adequacy ratio and liquidity ratio in February 2022, in line with prudential requirements.

With a non-performing loan ratio steadily declining since 2021 despite the shocks caused by the COVID-19 pandemic, he said the asset quality of the banking system was now one of the strongest in sub-Saharan Africa.

He said, “Banking intermediation continued to improve in February 2022, with total industry credit increasing from N24.6 billion in January 2022 to N25.25 billion in February 2022.”

“The extension of bank lending moratoriums to mid-2022 as part of COVID-19 relief measures continues to ease the burden on borrowers severely affected by the pandemic.”

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