Banks’ Non-performing Loans Hit 10-month High At N2.42trn – NDIC

By Nse Anthony-Uko
(Sundiata Post) — The Nigeria Deposit Insurance Corporation (NDIC) has disclosed that total Non-performing Loans (NPLs) in the banking industry hits N2.42 trillion or 15.18 per cent as at September 30, 2017, the highest in over 10 months.
According to NDIC, the banking industry in 2016 reported a NPL of about N1.6 trillion 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 NPLs 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 stated that banking industry NPLs crossed the N2 trillion threshold in April this year to N2.09 trillion and moved to N2.1 trillion in May. The report by NDIC stated that Non-Performing Loans dropped to N1.88 trillion in June and increased significantly to N2.3 trillion and N2.4 trillion 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.

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According to NDIC, total loans and advances to customers as at December 2016 was at N16.18 trillion to dropped to N15.98 trillion 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 September 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 N3.1 trillion (or 19.91 per cent) was non performing.

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“The 19.91 per cent NPL ratio was a 79.04per cent increase over the average industry ratio of 11.12 per cent recorded as at December 31, 2015.”

Adeleke during a media workshop organised by NDIC for finance Correspondents 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.

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