With stability in the Nigerian economy following ease in Covid-19 lockdown, some banks Non-Performing Loans Ratio (NPL) dropped in half year ended June 30, 2021, leading to the reduction of provision for bad loans (Impairment losses on financial instruments losses) by the banks.
The Governor, Central Bank of Nigeria (CBN), Godwin Emefiele had at the Monetary Policy Committee (MPC) in July disclosed that the sector’s NPLs was at 5.70 per cent in June 2021 compared with 6.4 per cent in June 2020.
He urged the banks to sustain its tight prudential regime to bring NPLs below the five per cent provident benchmark.
Analysis of the results bank’s released to the Nigerian Exchange Limited (NGX) showed that while some banks have reduced their NPLs others only recorded marginal increase.
For instance, Union Bank of Nigeria Plc recorded marginal increase in NPLs ratio in the period under review, while Wema bank Plc record significant drop in its NPL ratio in the period.
However, ETI Nigeria and FBN Holdings are the only two banks with NPL ratio above the regulatory threshold in H1 2021.
As reported in the H1 2021 unaudited results, ETI Nigeria’s NPLs dropped to 17.per cent from 19.90 per cent recorded in H1 2020, while FBN Holdings reported 7.20 per cent NPL/Gross Loans from 8.80 per cent recorded in H1 2020.
The Group Managing Director, FBN Holdings, U.K. Eke had while commenting on the bank’s H1 results said the macro and socio-economic conditions remain challenging given the COVID-19 pandemic and the low-interest rates environment.
He said the financial institution remains committed to its strategic objective of driving further stability in performance, as well as delivering sustainable growth over the years to come.
Further findings revealed that Wema Bank Plc’s NPLs closed H1 2021 at 3.50 per cent from 5.60 per cent in H1 2020 just as Sterling Bank’s NPLs declined from 1.90 per cent in H1 2020 to 1.79 per cent in H1 2021.
In addition, FCMB Group NPLs declined from 3.50 per cent in H1 2020 to 3.30 per cent in H1 2021, while Union Bank of Nigeria’s NPL ratio increased to 4.30 per cent in H1 2021 from 4.00 per cent recorded in H1 2020.Further analysis of the results showed a 13.4 per cent increase in FCMB Group NPLs to N3.78 billion in H1 2021 from N2.55 billion, dragging the financial institution NPLs by value to N32.21 billion in H1 2021 from N29.77 billion recorded in H1 […]
