NPLs in banks shrink to N1.67tn in Q1 – NBS

…E-payment transactions hit N34.02tr in 3 months

…DMBs credit to private sector declines by 0.86% in one year

Motolani Oseni

At the end of the first three months in 2019, Non-Performing Loans (NPLs) in commercial banks shrunk to N1.67 trillion, as against N1.76 trillion recorded in the fourth quarter (Q4) of 2018, the latest figure from the National Bureau of Statistics (NBS) has shown.

Also, the NBS report disclosed that a total of 557,083,712 electronic-payment transactions valued at N34.02 trillion were recorded in selected banks across the country, during the same period under review.

The breakdown of the figure, however, indicated that that gross loans commercial banks granted in Q1 2019 was N15.48 trillion as against N15.35 trillion in Q4 2019, bringing NPL/Total Loans to 10.83 per cent from 11.67 per cent in Q4 2018.

Commercial banks year-on-year sectoral change in NPLs by sector as at April 2019, according to NBS, showed that five sectors accounted for 77.5 per cent or N1.3 trillion of the N1.67 trillion total NPLs.

Further analysis revealed that the Oil & Gas sector reported N777.84 billion NPLs as at April 2019 from N871.17 billion report in April 2018 while general commerce reported N166.86 billion NPLs as at April 2019, N12.57 billion or 7.01 per cent below N179.43 billion reported in prior year’s April.

Others include “General” N151.12 billion NPLs as at April 2019; Manufacturing sector, N113.82 billion and Power and Energy, N100.47 billion NPLs as at April 2019.

The report by the NBS noted that commercial banks NPLs in Q1 2018 was N2.19 trillion but later dropped to N1.94 trillion in Q2 2018 and increased to N2.25 trillion in Q3 2018.

The Central Bank of Nigeria (CBN) had disclosed that NPLs somewhat improved from 11.68per cent in December 2018 to 11.28per cent in February 2019.

The apex bank noted that “the downward trend is a good indicator of the effectiveness of the recovery efforts of the banks and the regulatory support of the CBN towards achieving lower NPLs, even though the ratio remains above the prudential requirement of five per cent.

“Besides the improvement in the NPL ratio, there is also, improvement in the provisions made for NPLs which stood at 98.59 per cent coverage at end-February, 2019 compared to 78.27 per cent at end-February, 2018.”

The apex bank commended the Federal Government for the settlement of a debt owed to oil marketers, which has considerably, helped in reducing the NPLs portfolio of the banking sector.

The bureau in its “selected Banking Sector Data: Sectorial Breakdown of Credit, ePayment Channels and Staff Strength” report noted that loans (after specific provisions) moved to N13.74 trillion in Q1 2019 from N13.56 trillion in Q4 2018.

The report also disclosed that commercial banking sector credit to private sector marginally gained 0.52 per cent to N15.2 trillion in Q1 2019 from N15.13 trillion in Q4 2018.

The Daily Times checks showed that commercial banking credit to the private sector in Q1 2018 was N15.6 trillion, a decline of 0.86 per cent from N15.74 trillion in Q4 2017.

On staff strength in the banking sector, the report by NBS disclosed that contract Staff increased by 2.20 per cent on Quarter-on-Quarter to 46,235 in Q1 2019 from 45,238 in Q1 2018 but rose by 44.43 per cent on Year-on-Year growth (32,013 reported in Q1 2018).

Junior Staff dropped by 1.31 QonQ to 40,571 from 41,111 reported in Q1 2018 while Senior Staff also dropped by 0.56 QonQ to 18,018 from 18,119 in Q4 2018.

For executive staff working in the banking sector, the figure by NBS showed that 193, 3.98 per cent QonQ growth from 201 reported in Q4 2018. The figure by NBS revealed that executive staff strength dropped by 8.10 per cent YonY from 210 reported in Q1 2018.

Meanwhile, a total volume of 557,083,712 transactions valued at N34.02 trillion were recorded in Q1 2019 as data on NIBSS Instant Payments (NIP) transactions dominated the volume of transactions recorded. 232,816,102 volumes of NIP transactions valued at N24.17 trillion were recorded in Q1 2019.

The electronic payment channels in Nigeria banking sector revealed that, transactions on Automated Teller Machine (ATM) in Q1 2019 was at N1.54 trillion with 202,959,732 volume of the transaction while Point of Sales (POS) reported N633.8 billion with 83,762,144 volume transactions.

In addition, the report said a total of N1.15 trillion worth of cheques were transacted in Q1 2019 with 1,468,409 volume while Ebillspay reports N141.6 billion and 316,534 volumes of transactions in Q1 2019.