Business

Nine Banks’ Non-performing Loans Rise, Hit N814bn – Reports

Published

3 years ago

May 16, 2022

The aggregate Non-Performing Loans of nine banks increased to N814.08bn in 2021, representing a 3.16 per cent increase from the N789.14bn reported in 2020, according to findings by The PUNCH.

The nine banks are Access Holdings Plc, Zenith Bank Plc, Wema Bank Plc, FCMB Group, Union Bank of Nigeria Plc and Stanbic IBTC Holdings Plc.

Others are Guaranty Trust Holding Plc, United Bank for Africa Plc, and Ecobank Nigeria.

However, with the banking sector’s NPL ratio closing 2021 at 4.85 per cent, some of the nine banks remained within the five per cent NPL ratio stipulated by the Central Bank of Nigeria.

Further findings also show that while some of the banks recorded an increase in their NPLs during the period under review, a number of them recorded a significant decline in their NPLs.

From the banks’ audited 2021 financial statements, findings showed that Access Holdings, Zenith Bank and GTCO reported the top three highest NPL by value among the nine banks, while Stanbic IBTC Holdings reported the lowest.

Access Bank in 2021 reported N181.5bn NPL by value, representing an increase of 4.3 per cent from the N161.2bn it recorded in 2020, while Zenith Bank’s NPL hit N146.8bn in 2021 from N125.2bn recorded in 2020, an increase of 17.3 per cent.

Zenith Bank, in a presentation to investors/analysts, explained that it adopted a complete and integrated approach to risk management that was driven from the Board of Directors’ level to the operational activities of the bank.

The bank further explained that its risk management was practiced as a collective responsibility coordinated by the risk control units and is properly segregated from the market-facing units to assure independence.

“There is a regular scan of the environment for threats and opportunities to improve industry knowledge and information that drives decision making. The group maintains a proactive approach to business and ensures an appropriate balance in its risk and reward objectives,” the bank explained.

Wema Bank, in 2021, reported N21.3bn NPL, an increase of 19.3 per cent from N19.3bn in 2020, while FCMB Group’s NPL rose to N45.93bn, representing a 61 per cent increase from N28.57bn it reported in 2020.

Others are Union Bank of Nigeria with N38.66bn NPL in 2021 from N29.45bn reported in 2020, as Stanbic IBTC Holdings reported 23.4 per cent drop in its NPL to N20.3bn in 2021 from N25.5bn in 2020.

Furthermore, GTCO’s NPL value rose by 2.3 per cent to N113.94bn in 2021 from N111.43bn reported in 2020, while UBA closed 2021 with N96.5bn NPL value from N120.08bn reported in 2020, indicating a significant reduction in its NPL.

In addition, ETI Nigeria reported N149.15bn NPL by value in 2021 from N167.41bn in 2020, a decline of 11 per cent.

Ecobank Nigeria reported NPL ratio of 16.6 per cent in 2021 from 19.6 per cent in 2020. Access Holdings closed 2021 with NPL ratio of 4.3 per cent as against four per cent in 2020, as Zenith Bank NPL ratio dropped to 4.2 per cent in 2021 from 4.3 per cent in 2020.

According to analysts, the NPL ratios in the banking sector remained stable in 2021, following the CBN’s forbearance for restructuring loan exposure to critical sectors.

Extract from the banks’ performance revealed that GTCO reported a drop in its NPL to 6.04 per cent in 2021 from 6.39per cent in 2020, while ETI Nigeria reported 16.30 NPL ratio in 2021 from 19.90 per cent in 2020.

GTCO in a presentation to investors/ analysts explained, “The Group improved its asset quality with IFRS 9 Stage 3 loans closing at 6.04 per cent in 2021 from 6.39 per cent in 2020.

“The marginal increase in prudential NPLs from 6.86 per cent to 6.92 per cent was as a result of stress noted with certain exposures within the hospitality, individuals, clubs, co-operative societies and unions as the obligors within these sectors were severely impacted by Covid-19.

“Downstream sector benefited from the N7.2bn write-off in FY 2021 as its NPLs improved to 8.6 per cent in 2021 from 11 per cent in 2020.

“IFRS 9 Stage 3 loans closed at N113.9bn as of FY 2021 increasing by 2.2 per cent from N111.5bn in 2020. Balance Sheet Impairment Allowance for Stage 3/Lifetime Credit Impaired exposures closed at N57.5bn representing 50.5 per cent coverage of loans in this classification.

“In aggregate terms (including Regulatory Risk Reserves of N87.6billion), the Group has adequate coverage of 150.4per cent for its Stage 3 names/NPLs, this position is consistent with the group’s plan to maintain 100 per cent coverage for its NPLs.”

UBA, Access Bank, and Zenith Bank, among other banks, reported NPL ratio below five per cent in the 2021 financial year.

For instance, UBA’s NPL dropped to 3.60 per cent from 4.70 per cent in 2020.

Speaking on its NPL decline performance, UBA’s Group Chief Financial Official, Ugo Nwaghodoh said, “This testifies to the quality of UBA’s loan portfolio even as the bank remains relentless in its resolve to drive down the Cost-to-Income ratio, which stood at 63.0 per cent at the end of the year.”

Access Bank reported 4.00 per cent NPL ratio in 2021 from 4.30 per cent, while Zenith Bank reported 4.20 per cent NPL ratio in 2021 from 4.30 per cent in 2020.

Stanbic IBTC Holdings reported 2.10 per cent NPL in 2021 from 4.00 per cent reported in 2020.

The Chief Executive, Stanbic IBTC, Dr Demola Sogunle in a statement said the NPLs ratio moderated to 2.1 per cent, well within the acceptable limit of five per cent, as the total NPLs decreased in value by 23 per cent coupled with the responsible loan growth in line with the management conservative credit risk management practices.

In addition, Wema Bank reported NPL ratio declined from 4.9 per cent in 2020 to 4.5 per cent in 2021, as Union Bank of Nigeria’s NPL ratio moved from 4.00 per cent to 4.30per cent in 2021.

FCMB group closed 2021 with 4.10 per cent NPL ratio from 3.3 per cent in 2020.

Members of the Monetary Policy Committee of the CBN, thus, applauded the management’s efforts in ensuring the continued downward trend of NPLs ratio, signifying improving conditions in the banking system

The MPC members also noted the sustained resilience of the banking system, following the progressive improvement in the NPLs ratio from 5.10 per cent in November 2021 to 4.85 per cent in December 2021- a first in a long time.

In her personal statement, a member, CBN Deputy Governor, Aishah Ahmad, said NPLs dropped to its lowest level in over a decade despite the increased lending by banks.

She noted that total credit had increased by N4.09tn between the end of December 2020 and December 2021 with significant growth in credit to manufacturing, general commerce, and oil and gas sectors.

She said, “Key industry aggregates also continued their year-on-year upward trajectory with total assets rising to N59.24tn in December 2021 from N50.99tn in December 2020, while total deposits rose to N38.42tn from N32.21tn over the same period.

“Total credit also increased by N4.09tn between end- December 2020 and end-December 2021 with significant growth in credit to manufacturing, general commerce, and oil & gas sectors.

“This impressive increase was achieved amidst continued decline in non-performing loans ratio from 5.10 per cent in November 2021 to 4.94 per cent in December 2021, 6 basis points below the regulatory benchmark for the first time in over a decade.”

PUNCH.

Business

Fixed Income: CBN Announces Fresh Regulations To Control Nigerian Market

Published

3 days ago

October 3, 2025

Editor

The Central Bank of Nigeria has announced sweeping regulations to take control of the Nigerian fixed income market.

The regulations expected to begin in November are aimed at boosting transparency across Nigeria’s financial sector.
The apex bank disclosed this in a recent statement.

CBN noted that the intervention is a key part of broader financial market reforms.

Accordingly, it said its core objective is to enhance regulatory oversight and strengthen the market’s ability to effectively support the transmission of monetary policy and, ultimately, foster economic growth.

“This transition will enable the CBN to assume direct responsibility for the management of the trading platform and handle end-to-end settlement activities under the bank’s established settlement system for financial market transactions,” the statement read.

According to DAILY POST, Fixed income securities refer to investments which provide a return in the form of fixed periodic interest payments and the eventual return of the principal at maturity.

Business

Confusion Over Euro-Africa CCI’s $250m Investment In Edo

Published

1 week ago

September 29, 2025

Editor

The $250m investment deal Governor Monday Okpebholo claimed to have secured during his recent trip to Scotland is generating ripples over capacity of the European African Chamber of Commerce and Industry (EACCI) to make such a huge investment.

The EACCI, headed by a Drector General, Dr. Kingsley Obasohan, is not known to have made any prior investment in Edo State or any part of the country.

Obasohan, who attended the Edo State Global Investment Summit virtually, announced the $250m investment.

He said the investment would be made for a period of three years.

An online search was launched to unravel the EACCI as well as the man Obasohan.

A number on the site was answered by a lady who claimed not to understand English language.

Several foreign partners were listed on the site as board members and advisory council.

Some closed associates of Obasohan said he would have to get clearance from the Board members before talking to journalists on the issue.

Spokesman for the Edo Peoples Democratic Party, Daniel Noah Osa-Ogbegi, said the party would hold Governor Okpebholo accountable to Edo people and demanded clarity on the $250m investment from Glasgow.

Osa-Ogbegi said the proposed investment has become a source of embarrassment to Edo people because of unfolding information about EACCI.

He said the party would shine light on fiscal management practices that appeared to ignore transparency and responsibility.

Secretary to the State Government (SSG), Umar Musa Ikhilo, had earlier said those that attended the Glasgow summit were interested in keying into the SHINE agenda of Governor Okpebholo.

“One of the chambers of commerce that attended, the European African Chamber of Commerce and Industry signed an MoU with the Edo State Government to invest a sum of $250 million over the next three to five years.

“Last year, diaspora remittances were the second-highest source of foreign income in Nigeria after crude oil, over $20 billion, but only 2% of that went into investment. We are creating a vehicle to help convert more of that into direct investments.”

He added that a delegation from Scotland was expected to visit Edo State in the coming months to explore specific investment projects as a follow-up to the summit.

Business

Dangote Hits Out At PENGASSAN, Says Union ‘Serial Saboteurs, Serving Oligarchs’

Published

1 week ago

September 28, 2025

Editor

The management of Dangote Petroleum Refinery has berated the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), accusing the union of decades-long sabotage of Nigeria’s oil and gas sector and serving the interests of its leaders rather than ordinary Nigerians.

In a statement issued at the weekend, the refinery described PENGASSAN’s latest directive to cut crude oil and gas supplies to the facility as another act of economic sabotage designed to inflict untold hardship on Nigerians.

“Indeed, over time, the Association has consistently proved itself as serving interests other than those of Nigerians and Nigerian workers,” the statement declared.

Dangote recalled that in 2007, when the Federal Government sold its moribund Port Harcourt and Kaduna refineries to Blue Star Consortium, led by the Dangote Group, for $750 million, it was PENGASSAN and its ally, the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), that sabotaged the deal. “It is now obvious to everyone that the FGN’s decision at the time was the right one and that PENGASSAN and NUPENG ignominiously wrote their names on the wrong pages of history,” the company said.

The refinery also faulted the union’s role in the much-publicised rehabilitation of the Port Harcourt Refinery, describing it as a “ruse” which PENGASSAN “knowingly celebrated despite being a scam on Nigerians.” The statement further accused the union of opposing amendments to the Petroleum Industry Act (PIA) that would have freed up federal liquidity and attracted private-sector funding into Nigeria’s upstream oil ventures.

Beyond policy obstruction, Dangote Refinery accused the association of mismanaging billions of naira in annual check-off dues to allegedly bankroll the “lavish lifestyles” of its leaders, without accountability to members. By contrast, the refinery highlighted its own record of economic contributions within a short period, citing road construction, worker training, the creation of thousands of Nigerian jobs, and a compensation structure that “outdistances the best in the Nigerian oil and gas industry.”

“The Dangote Group is the highest employer of labor in Nigeria and the highest contributor to the tax revenues of Nigeria and its sub-nationals. What comparable social responsibility has PENGASSAN, with its billions of Naira in annual check-off dues and subscriptions, lived up to?” the statement queried, challenging the union to publish its audited accounts for the past ten years. “Can it publish publicly its account for the last 10 years and list out its corporate responsibility activities within that timeframe?”

The refinery insisted that PENGASSAN’s recent directive to withdraw services and cut off essential fuel supplies, including but not limited to petrol, diesel, kerosene, cooking gas and aviation fuel was reckless, lawless and dangerous. It said the order is not about protecting Nigerian workers, but it is about a cabal of oligarchs weaponising hardship against over 230 million Nigerians.

“In the process, it (PENGASSAN) cares little if at all about the unbearable hardship and terror it would thereby inflict on all Nigerians, including but not limited to the provision of essential services in our hospitals and medical facilities, schools (nursery and right up to tertiary and research institutions), emergency services, communications facilities, transportation systems, etc,” it said.

Dangote Refinery called on the Federal Government and security agencies to step in immediately to protect the facility and the nation’s energy security, stressing that the union must not be allowed to “bully Nigerians into chaos and economic sabotage.”

According to Tribune Online, the federal government has announced readiness to broker peace between Dangote Refinery and PENGASSAN, inviting both to a meeting scheduled for Monday.