Home Economy Banks NPL falls from N1.9 trn to N1.10trn in 3Q 2019–NBS

Banks NPL falls from N1.9 trn to N1.10trn in 3Q 2019–NBS

by Business News Report

Nigerian Banks recovered a total of N738.15 billion Non-Performing Loans (NPL) from operators in oil and gas sector.  According to the the National Bureau of Statistics (NBS) third quarter (Q3) 2019 report, NPL in the oil and gas sector dropped from N1.002 trillion in Q3 2018 to N264 billion in Q3 2019. This suggests that in one year, banks recovered N738.15 billion NPL in the sector.    NBS report shows that there was a major drop in NPL across sectors in the last one year, as Nigerian banks recovered loans from 16 sectors.  

According to the report, Nigerian Banks recovered N738.15 million from the oil and gas sector; Power and Energy N116.01 billion; Real Estate Activities N74.02 billion; Manufacturing N43.67 billion; Information and Communication N39.40 billion, and Finance and Insurance N34.42 billion.  Other sectors that witnessed reduction in NPL include Transportation and Storage N32.27 billion; General N26.42 billion; Scientific and Technical Activities N5.19 billion; Mining and Quarrying N2.69 billion; Art, Entertainment and Recreation N2.36 billion; Human Health and Social Work Activities N1 billion; Administrative and Support Services N620 million; Capital Market N600 million, and Public Utilities 450 million. 

However, NPL rose in a few sectors within the period as construction tops the list. The Bureau’s report shows that NPL in construction rose to N81.60 billion – an increase of N9.25 billion in one year.  Other sectors that recorded a rise in NPL include the agricultural sector (N49.96 billion); education (N8.69 billion); government (N1.28 billion), and waste management (N2.24 billion).  

NPL drops by N1.103 trillion, ratio down to single-digit.  According to NBS report, the percentage of non-performing loans to the total loan dropped to 6.67 per cent at the end of Q3 2019. Although theCBN recently disclosed that the ratio of NPL to total loans had declined further to 6.56 per cent at the end of October 2019 from 6.67 per cent in September 2019.  Analysis of NPL data shows in the last one year, NPL dropped by N1.103 trillion, from N2.24 trillion in Q3 2018 to N1.108 trillion in Q3 2019.  The latest drop means NPL hit the lowest figure since the first quarter of 2016 when it stood at N1.29 trillion. 

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