Commercial banks’ NPLs hit N2.42trn in Q3-NDIC
The total figure of Non-Performing Loans (NPLs) in the Nigeria’s commercial banks, as at the end of third quarter (Q3) put at N2.42 trillion or 15.18 per cent as at September 30, 2017, the highest in over 10 months, the Nigeria Deposit Insurance Corporation (NDIC) has revealed.
According to NDIC, the banking industry in 2016 reported a Non-Performing Loan of about N1.6trn or 10.13 per cent to highlight impact of recession on banks’ lending to key sector of the nation’s economy.
Finance analysts had also attributed the rise in Non-Performing Loans to the fall in global oil prices and production levels arising from the militancy in the Niger-Delta region of the country.
NDIC in a report obtained by Daily Times stated that banking industry Non-Performing Loan crossed the N2trn threshold in April this year to N2.09 trillion and moved to N2.1trn in May.
The report by NDIC stated that Non-Performing Loans dropped to N1.88trn in June and increased significantly to N2.3trn and N2.4trn in July and August respectively.
The report stated that total loans and advances continued to drop this year despite steady recovery in nation’s economy.
According to NDIC, total loans & advances to customers as at December 2016 was at N16.18trn to dropped to N15.98trn as at September 30, 2017.
The Director, Bank Examination Department at the NDIC, Mr. Adedapo Adeleke, explained that while the banking industry NPL ratios and the volume of non-performing loans continued to grow up till Sept, 2017, the total loans advanced by the industry continued to decrease in volume as banks curtailed lending and concentrated on loans recovery drives.
He said the Risk Assets examination of 20 Deposit Money Banks (DMBs) as at December 31, 2016, revealed that of the total industry loans portfolio of N15.6 trillion, the sum of N3.1trn (or 19.91 per cent) was non performing.
“The 19.91per cent NPL ratio was a 79.04per cent increase over the average industry ratio of 11.12per cent recorded as at December 31, 2015.”
Adeleke during a media workshop organised by NDIC for finance reporters in Kano, said the increased Non-performing Loans in the banking sector were worrisome for an industry that has battled head winds through the years and suffered colossal losses due to bad loans
L-R: First Deputy President, KACCIMA Alh. Sani Umar presenting a gift to the NDIC, MD/CE Alh. Umaru Ibrahim at the NDIC Special Day during the ongoing 38th Kano International Trade Fair 2017 in Kano.
Stories by Motolani Oseni
