Non-performing loans held by Nigerian banks drop to US$3.1bn in spite of COVID-19- CBN says

NIGERIA – The Central Bank of Nigeria has reported that Nigerian banks have made tremendous steps towards reducing the amount of non-performing loans in their inventory despite the economic challenges occasioned by COVID-19 pandemic.

According to the latest figures from CBN, banks’ non-performing loans stood at N1.2tn (US$3.1 billion) as of the end of June.

This figure according to CBN amounted to about 6.4 per cent of the gross credit of the banks to the economy which stood at N18.9tn as of the period under review.

“The committee noted the decrease in NPLs ratio to 6.4 per cent at end-June 2020 from 9.4 per cent in the corresponding period of 2019, on account of increased recoveries, write-offs and disposals,” explained Central Bank Governor, Godwin Emefiele.

According to figures from the National Bureau of Statistics on selected banking data, the lending institutions’ non-performing loans stood at N1.67tn (US$4.32 billion) as of the end of March 2019, from a figure of N1.79tn (US$4.63 billion) as of the end of 2018.

Emefiele further noted that the monetary committee expressed confidence in the stability of the banking system.

The CBN Governor urged the bank to monitor the compliance of Deposit Money Banks to its prudential and regulatory measures to sustain the soundness and safety of the banking industry.

Emefiele disclosed that the aggregate domestic credit (net) grew by 5.16 per cent in June 2020 compared with 7.47 per cent in May 2020.

He said the committee commended the CBN Loan-to-Deposit Ratio initiative to address the credit conundrum as the total gross credit increased by N3.33tn from N15.56tn at end-May 2019 to N18.90tn at end-June 2020.

 “These credits were largely recorded in manufacturing, consumer credit, general commerce, and information and communication and agriculture, which are productive sectors of the economy,” he said.

Managing Director/Chief Executive Officer, Asset Management Corporation of Nigeria, Mr Ahmed Kuru, on his part noted that the corporation had developed a new receiver framework for its recovery agents.

As part of the corporation’s efforts to recover the outstanding N5tn debt, he said the corporation had disengaged some of its receivers for non-performance.

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