- Non-performing Loans Decline by 51% in One Year
The total non-performing loans in the Nigerian banking sector declined by 50.89 percent in twelve months, the National Bureau of Statistics (NBS) report has shown.
According to the NBS, non-performing loans declined by 50.89 percent from N2.245 trillion recorded in the third quarter of 2018 to N1.108 trillion in the third quarter of 2019.
While the total loans provided by the Nigerian banks rose from N15.861 trillion in the same quarter of 2018 to N16.620 trillion in the third quarter of 2019. Suggesting that the central bank efforts at ensuring banks’ credit to the private sector improve through the 65 percent loan-to-deposit ratio (LDR) directive is aiding credit provision.
The apex bank had mandated Deposit Money Banks to maintain 65 percent LDR by December 31, 2019 while at the same time maintaining a 13.5 percent interest rate in an effort to further stimulate local production and enhance job creation.
A further breakdown of the report shows loan with specific provisions stood at N1.399 trillion in the third quarter while loans after specific provisions was N15.221 trillion of the total loans. Non-performing loans account for 6.67 percent of the total loans, down from 14.16 percent recorded in the same quarter of 2018.
In the third quarter, the oil and gas sector received the most credit, N3.39 trillion. Followed by the manufacturing sector with N257 trillion.
The total staff in the banking sector declined by 2.81 percent from 104,364 recorded in the second quarter of the year to 101,435 in the third quarter. Another evident of possible surge unemployment, especially with the first bank letting go of some employees last month.