CBN Says Non-Performing Bank Loans Now N1.2trn

The Central Bank of Nigeria (CBN) has announced that the non-performing loans of the Nigerian banks stood at N1.2 trillion as of June 2020.

The apex bank gave the figure on Monday, July 27.

The figure amounts to about 6.4 per cent of the gross credit of the banks to the economy, which stands at N18.9 trillion as of the period under review.

The recent statistics show that the banks have gradually reduced the bad debts in their books in the past years.

The seeming progress is believed to have been achieved due to increased loan recoveries, write-offs and disposals by the financial institutions.

Figures from selected banking data given by the National Bureau of Statistics show that the banks’ non-performing loans stood at N1.67 trillion as of the end of March 2019, down from the N1.79 trillion it was at end of 2018.

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Speaking at the end of the Monetary Policy Committee Meeting last week, the CBN Governor, Godwin Emefiele, stated that the non-performing loans have decreased in the sector.

He said, “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.

“The committee expressed confidence in the stability of the banking system and 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 added that the aggregate domestic credit (net) grew by 5.16 per cent in June 2020, compared with 7.47 per cent in May 2020.

According to him, the committee commended the CBN Loan-to-Deposit Ratio initiative for addressing the credit conundrum which has helped the total gross credit increase by N3.33 trillion from N15.56 trillion at the end of May 2019 to N18.90 trillion at end of June 2020.

The CBN Governor disclosed that “these credits were largely recorded in manufacturing, consumer credit, general commerce, information and communication and agriculture, which are productive sectors of the economy”.

The Managing Director/Chief Executive Officer, Asset Management Corporation of Nigeria, Ahmed Kuru, also said that the corporation has developed a new receiver framework for its recovery agents.

He said in its efforts to recover the outstanding N5 trillion debt, the corporation has disengaged some of its receivers for non-performance.