With stability in the Nigerian economy following ease in Covid-19 lockdown, some banks Non-Performing Loans Ratio (NPL) dropped in half year ended
The Governor,
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
For instance,
However,
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
The Group Managing Director,
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
In addition, FCMB Group NPLs declined from 3.50 per cent in H1 2020 to 3.30 per cent in H1 2021, while
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 2020.
Analysts attributed banks decline in some bank's NPLs to ease of COVID-19 lockdown, effective management of credit risk and reduction of risk to some sectors.
Further checks by THISDAY revealed that
On its part,
Commenting on the decline in some banks' NPLs, the Vice President, High cap Securities, Mr.
According to him, "The global economy was battered by COVID-19, leading to some borrowers unable to pay back their loans. More businesses are gathering momentum and these businesses are earning more income and paying back their loans.
"If NPL is reducing, it means that impairment of their assets will decline because their assets will not suffer losses as what they have recovered will add to the strength of their asset whereby reducing impairment. It is good news for the banking sector."
Analyst at
He maintained that banks have strengthened their Know-Your-Customers (KYC) policy of the CBN adding that this has aided bad loan recovery.
In his words: "The sector NPLs is expected to reduce as a lot of banks are not meeting the 65 per cent Loan-to-Deposit Ratio policy of the CBN in a move to reduce NPLs. Banks are watching their loans closely and it has contributed to decline in NPL and impairment losses significantly. They are also following the kind of customers they grant loans to.
"Some banks are targeting salary earnings since they know they will be getting their money bank. All these are factors we need to consider when lending to individuals. Mind you, some banks are not exposing themselves to some sectors with high risk."
He maintained that banks were effective in managing the 65 per cent Loan-to-Deposit Ratio (LDR) policy of the CBN revealing that most banks failed to meet the threshold.
"With the 65 per cent LDR policy of the CBN, banks were clever granting loans to some sectors and new customers. Banks are not exposed to the Oil & gas sector unlike what we had in 2016 & 2017, "he said.
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