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Banks Reduce Non-Performing Loans to N1.2 Trillion in Q1 2020

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Banks Cut Non-Performing Loans to N1.2 Trillion in the First Quarter 2020

The total non-performing loans in the banking sector moderated to N1.2 trillion in the first quarter of the year, according to the Central Bank of Nigeria.

This represents around 6.4 percent of the total credit of N18.9 trillion that banks provide businesses in the economy as of March 2020.

The central bank disclosed this in its latest statistics report released on Monday.

The apex bank attributed the decline in non-performing loans to the surge in recoveries, write-offs and disposals by financial institutions.

This was affirmed by the Monetary Policy Committee last week when the Central Bank Governor, Mr. Godwin Emefiele, stated that non-performing loan in the banking sector has declined.

Mr. Emefiele 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.”

The governor disclosed that total domestic credit expanded by 7.47 percent and 5.16 percent in May and June respectively.

Emefiele added that the Monetary Policy Committee lauded the central bank’s Loan-to-Deposit Ratio initiative, saying they believe it will address the current credit challenges facing the nation.

He explained that credit to the economy rose by 3.33 trillion from N15.56 trillion in May 2019 to N18.90 trillion at the end of June 2020.

“These credits were largely recorded in manufacturing, consumer credit, general commerce, and information and communication and agriculture, which are productive sectors of the economy,” he said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Finance

Stanbic IBTC Reports N20.9 Billion Profit in the Third Quarter

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Stanbic IBTC Bank

Stanbic IBTC Posts N20.9 Billion Profit After Tax in the Third Quarter (Q3)

Stanbic IBTC Holdings Plc on Monday released its financial statements for the third quarter (Q3) of 2020.

In the financial results released through the Nigerian Stock Exchange (NSE), the lender generated revenue of N56.72 billion in the third quarter, below the N58.78 billion recorded in the same quarter of 2019.

Net interest income also declined slightly from N19.362 billion posted in the corresponding period of 2019 to N18.71 billion in Q3 2020.

Non-interest revenue rose to N28.66 billion in the quarter under review, up from the N27.09 billion posted in Q3 2019.

Accordingly, the total income for the period grew from N46.45 billion achieved in the third quarter of 2019 to N47.37 billion in Q3 2020. While operating expenses increased slightly from N21.52 billion in Q3 2019 to N22.31 billion in Q3 2020.

Profit before tax remained unchanged at N24.46 billion in the quarter under review when compared to the same N24.46 billion posted in the same quarter of last year.

However, profit after tax rose to N20.96 billion in the third quarter of 2020, thanks to tax differential. The lender posted N19.31 billion in the same period of 2019.

Earnings per share grew from 179 kobo in Q3 2019 to 183 kobo.

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More Retirees Quit Pension Scheme, Collects N28.46 Billion

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Pensioners

114,837 Retirees Quit Pension Scheme, Collects N28.46 Billion

Thousands of retirees whose employers did not adequately fund their Retirement Savings Accounts and retired with balances below N550,000 have collected their contributions and quit the Contributory Pension Scheme (CPS).

A total of 114,837 employees who retired after attaining the age of 50 and had less than N550,000 in their CPS account had collected their contributions and left the scheme as of the end of June 2020.

This includes contributors from the state, federal and private sectors.

In the quarterly report released on Friday by the PenCom, these retirees withdrew a total sum of N28.46 billion since the inception of the scheme till June.

The report showed about 6,561 of the total retirees that left the program were from the Federal Government sector while 3,879 and 104,397 were from the state and private sectors, respectively.

The report also showed that some of those who collected their contributions included foreign nationals who retired and returned to their countries of origin.

A further breakdown showed as of the end of third quarter of 2019, a total of 109,284 retirees with similar low balances withdrew N27.09 billion. While by the final quarter of 2019, 2,241 retirees withdrew about N569.27 million.

In the first quarter and second quarter of 2020, about 2,227 and 1,085 retirees withdrawn N531.95 million and N274.09 million, respectively. Bringing the total from inception to N28.46 billion.

PenCom stated in its Q2 report on en-bloc payments that, “The commission granted approval for the payment of the entire RSA balances of the categories of retirees whose RSA balances were N550,000 or below and considered insufficient to procure a programmed withdrawal or annuity of a reasonable amount over an expected life span.

“Approval was also granted for payment of RSA balances to foreign nationals who decided to return to their home countries after making contributions under the CPS.

“Accordingly, the sum of N274.78m was paid to 1,085 retirees, which comprised 140 from the public sector retirees (FGN and state) and 1,085 from the private sector retirees during the second quarter.

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Central Bank to Promote Zero Balance Account Opening to Drive Financial Inclusion

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Central Bank

Banks Now Accept Zero Balance Account Opening to Deepen Financial Inclusion

In an effort to boost financial inclusion in the country, the Central Bank of Nigeria has said it would start promoting zero balance account opening to encourage and lure the unbanked into the banking system.

The apex bank disclosed this in its report titled ‘Monetary, credit, foreign trade and exchange policy guidelines for fiscal years 2020/2021’.

The report read in part, “As part of its effort towards promoting greater financial inclusion in the country, the bank shall continue to encourage banks to intensify deposit mobilisation during the 2020/2021 fiscal years.

“Accordingly, banks shall allow zero balances for opening new bank accounts and simplify their account opening processes, while adhering to Know-Your-Customer requirements.

“Banks are also encouraged to develop new products that would provide greater access to credit.”

The apex bank said the Shared Agency Network Expansion Facility, launched to deepen provision of financial services in under-served and unserved locations and drive financial inclusion through agent banking, would continue in the 2020/2021 fiscal years.

Banks, mobile money operators and super-agents would also continue to render returns in the prescribed formats and frequency to the CBN.

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