Banks’ loan portfolio falls to N52.656trn, lowest in 14 Months
The last time lending dropped below this threshold was in April 2024, when it stood at ₦51.467 trillion.
The June figure represents a ₦2.739 trillion decline from May’s ₦55.395 trillion, translating to a 4.95% month-on-month decrease. On a year-on-year basis, loans dipped marginally by ₦9 billion, less than 1%, compared to ₦52.665 trillion in June 2024.
Analysts say the contraction reflects a cautious approach by banks as they work to meet recapitalisation requirements set by the apex bank. The CBN has given lenders until March 30, 2026, to comply with revised capital thresholds, a deadline that is already reshaping credit expansion strategies.
Quarterly loan movements in 2025 highlight this balancing act. Loans stood at ₦54.153 trillion in January, dropped to ₦53.059 trillion in February, and rebounded to ₦54.136 trillion in March before sliding again in June.
Commercial banks typically provide loans to individuals and businesses for personal, consumer, and mortgage needs, while merchant banks focus on corporate financing, trade, and project-related lending.
The decline comes against the backdrop of rising non-performing loans (NPLs) in the sector. Following the withdrawal of regulatory forbearance that allowed banks to restructure pandemic-hit facilities, the industry’s NPL ratio climbed to an estimated 7% in 2025, breaching the prudential ceiling of 5%.
The CBN noted that the increase reflects the crystallisation of previously restructured loans that no longer qualify for special consideration.
With credit growth slowing and bad loans rising, the banking sector faces mounting pressure to balance regulatory compliance with the need to support economic activity.
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