National Bureau of Statistics has said that banking industry witnessed a significant 41 per cent drop in non-performing loans (NPLs) last year. According to the NBS’s Selected Banking Sector Data for Q4 2019, which was released recently, banks’ NPLs dropped to N1.05 trillion in 2019, down from 1.79 trillion which was recorded during the preceding year. The decline in NPLs is despite the fact that banks provided more credit facilities to the private sector in 2019, the NBS report noted. In specific terms, bank loans to companies in 2019 stood at N17.19 trillion, indicating a 4% increase when compared to total loan of N15.13 trillion that was disbursed to the private sector in 2018.
The NBS reports said “A total volume of 893,681,888 transactions valued at N48.54 trillion were recorded in Q4 2019 as data on Electronic Payment Channels in the Nigeria Banking Sector revealed. NIBSS Instant Payments (NIP) transactions dominated the volume of transactions recorded. 342,636,006 volume of NIP transactions valued at N29.69 trillion were recorded in Q4 2019. As at Q4 2019, the total number of banks’ staff increased by 2.14% QoQ from 101,435 in Q3 2019 to 103,610.
“In terms of credit to private sector, the total value of credit allocated by the bank stood at N17.19 trillion as at Q4’19. Oil & Gas and Manufacturing sectors got credit allocation of N3.42 trillion and N2.62 trillion respectively, to record the highest credit allocation as at the period under review.”
The decline in banks’ NPL ratio is due to two possible factors: increase in loan recoveries and loan write-offs”.