During the first half of 2023, four prominent banks, including Guaranty Trust Bank Holding Plc , FBN Holdings Plc, FCMB Group Plc, and Fidelity Bank Plc, collectively reported non-performing loans valued at N478.93 billion.
According to The PUNCH, this marked a notable increase of almost 16 percent from the N413.36 billion reported at the close of the previous year, December 31, 2022.
Specifically, FBN Holdings, with a gross loan and advances portfolio amounting to N5.26 trillion and an NPL ratio of about 4.3 percent, disclosed N226.24 billion in NPLs during the first half of 2023, up from N204.29 billion recorded in the entirety of 2022.
The holdings reported a gross loans and advances ratio of N3.79 trillion and an NPL ratio of 5.4% for the 2022 fiscal year.
As of H1 2023, GTCO announced NPLs of N115.29 billion, up from N102.37 billion reported in the 2022 fiscal year.
“The Group’s IFRS 9 Stage 3 loans closed at 4.6 percent (Bank: 3.6 percent) in H1-2023 from 5.2 percent (Bank: 4.7 percent) in 2022,” GTCO stated in its presentation to investors and analysts. Individuals and Others are shown to have the greatest NPL rates, with 20,9% and 30,96%, respectively.
“IFRS 9 Stage 3 loans grew marginally to N115.3bn in H1-2023 from N102.8bn in 2022, primarily driven by exchange rate impact as the Group continued to deleverage in Ghana and Kenya and carried out derecognition of fully provided facilities in the Nigerian book.”
Additionally, FCMB Group recorded N52.66 billion in NPL value as of H1 2023 from N45.01 billion in 2022, while Fidelity Bank reported N84.73 billion as of H1 2023 from N61.37 billion.
In the meantime, non-performing loans have nonetheless being written off by local institutions. This occurred at the same time as lenders kept deducting money from the bank accounts of stubborn borrowers in an effort to lower the number of non-performing loans.
In order to monitor persistent loan defaulters and reduce non-performing loans in the banking industry, among other things, the CBN announced the Global Standing Instructions in 2020.
The CBN claims that the GSI enables banks to recoup the unpaid principle and interest upon default from any account held by the debtor at any of Nigeria’s banking institutions.
According to a CBN report based on a personal comment made by a Monetary Policy Committee member, Kingsley Obiora, during the most recent MPC meeting, the capital adequacy ratio and liquidity ratio remained above the required criteria.
Although CAR fell from 14.1 percent to 11.2 percent in 2023, it remained above the 10.0 percent prudential minimum, he noted.
He said, “The LR was also above the 30.0 per cent regulatory minimum ratio. It increased significantly from 42.6 per cent in June 2022 to 48.4 per cent in June 2023.”
