Banks’ Non-performing Loans rise by 50% to N2.4tn, Oil Sector has Highest Exposure

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Representation of Banks in Nigeria
Representation of Banks in Nigeria
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Banks’ Non-performing Loans rise by 50% to N2.4tn, Oil Sector has Highest Exposure

According to data from the Nigeria Deposit Insurance Corporation (NDIC), the economic challenges in the country made the level of non-performing loans (NPLs) in the Deposit Money Banks (DMBs) to rise by 50 per cent from N1.639tn in December 2016 to N2.424tn by September this year.

Banks In Nigeria
Banks In Nigeria

The CBN’s non-performing loans ratio in the banking industry is five per cent, but the banks’ NPLs have moved from 10.13 per cent to 15.18 per cent within the period, the financial returns of the DMBs compiled by the NDIC revealed. According to the NDIC data, the NPLs grew from N1.639tn in December 2016 to N1.921tn in March 2017, declining to N1.880tn in June but rising to N2.424tn in September this year.

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The Director, Banking Examination Department, NDIC, Mr. Adedapo Adeleke, said that the Financial Stability Report issued by the CBN as of December 31, 2016 indicated a disproportionate credit allocation to the oil and gas sub-sector by the Nigerian banks. “Sectoral allocation to the oil and gas as of December 31, 2016 was 29.59 per cent,” he said.

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