Banks’ Non-Performing Loans Now N1.2trn – CBN
***Banks Foreign Assets Rose 10.2% On Naira Adjustment
The Non-Performing Loans,NPLs of banks operating in Nigeria stood at N1.2 trillion as of the end of June according to figures obtained from the Central Bank of Nigeria, CBN.
This amounted to about 6.4 per cent of the gross credit of the banks to the economy which stood at N18.9 trillion as of the period under review.
The latest statistics show that the banks have gradually reduced the bad debts in their books in recent years, which was linked to increased recoveries, write-offs and disposals by the lending institutions.
According to figures from the National Bureau of Statistics on selected banking data, the lending institutions’ non-performing loans stood at N1.67 trillion as of the end of March 2019, from a figure of N1.79 trillion as of the end of 2018.
At the end of the last Monetary Policy Committee Meeting, the CBN Governor, Godwin Emefiele, affirmed that the non-performing loans had 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”, said.
He disclosed that the aggregate domestic credit (net) grew by 5.16 per cent in June 2020 compared with 7.47 per cent in May 2020.
Meanwhile, banks’ foreign assets rose 10.2 per cent on naira adjustment
The net foreign assets of banks rose by 10.2 per cent in the first quarter of 2020, according to the CBN.
The Apex bank which disclosed this in its monthly economic report for the first quarter of 2020, said the increase was due to the exchange rate adjustment during the period.
It said, “Foreign assets (net) of the banking system, on quarter-on-quarter basis, rose by 10.2 per cent to N6.39tn at end-March 2020, compared with the growth of 7.5 per cent in the fourth quarter of 2019, but was in contrast to the growth of 15.3 per cent at the end of first quarter of 2019.
“The increase in net foreign assets was due largely to the exchange rate adjustment during the review period.”
The apex bank stated that claims on domestic economy (net), on quarter-on-quarter basis, grew by 5.0 per cent to N37.97 trillion at the end of March 2020.
It said, “This reflected wholly the 2.6 and 5.8 per cent increase in net claims on government and claims on other sectors, compared with the growth of 1.4 per cent and 15.9 per cent at the end of the fourth quarter of 2019 and the first quarter of 2019, respectively.
“Net banking system claims on government, on quarter-on-quarter basis, grew by 2.6 per cent at end-March 2020, compared with a growth of 48.0 per cent in the first quarter of 2019, but was in contrast to the 4.4 per cent decline recorded at the end of the fourth quarter of 2019.”
The CBN said the development reflected the increase in holdings of government securities by the monetary authority.(Punch)
