Banks’ Bad Loans Hits N478bn Amid Economic Downturn

A national asset, CBN Headquarters, Abuja

At least four banks recorded N478bn non-performing loans during the first half of this year, according to their financial results

Specifically, Guaranty Trust Bank Holding Plc (GTCO), FBN Holdings Plc and two other banks reported N478.93bn non-performing loans by value in the half-year ended June 2023, an increase of nearly 16 per cent from N413.36bn reported in the full year ended December 31, 2022.

The other two banks are FCMB Group Plc and Fidelity Bank Plc.

With about 4.3 per cent NPL ratio and N5.26trn gross loans & advances, FBN Holdings reported N226.24bn NPL by value in H1 2023 from N204.29bn reported in 2022.

In addition, Fidelity Bank reported N84.73bn as of H1  2023  from  N61.37bn,  while  FCMB group declared N52.66bn NPL value as of H1 2023 from N45.01bn in 2022.

Meanwhile, banks in the country have continued to write off non-performing loans. This came as lenders also continued to debit the bank accounts of recalcitrant debtors in other to reduce the volume of non-performing loans.

The CBN in 2020 released the Global Standing Instruction guideline to reduce non-performing loans in the banking sector and monitor consistent loan defaulters among others.

According to the CBN, the GSI allows banks to recover the outstanding principal and interest upon default from any account maintained by the debtor across all financial institutions in Nigeria.

A report released by the CBN on personal comment of a Monetary Policy Committee member, Kingsley Obiora, during the last MPC meeting said the capital adequacy ratio and Liquidity Ratio had remained above the minimum thresholds.

Although CAR decreased to 11.2 per cent in 2023 from 14.1 per cent, it remained above the 10.0 per cent prudential requirement, he said.



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