Banks’ non-performing loans

By Elizabeth Adegbesan

Against the backdrop of the economic impact of Coronavirus (COVID-19) pandemic, the value of non-performing loans, NPLs, in Nigeria’s banking industry rose marginally by 3.0 percent to N1.21 trillion in the second quarter of 2020 (Q2’20) from N1.18 trillion in the first quarter, 2020, Q1’20.

But compared to the situation in the first quarter, when the rate of growth in NPL was 11 percent against the previous quarter (Q4’19) the banks seem to have done well in containing bad loans in Q2’20 amidst the COVID-19 pressures.

Similarly, banks’ credits to private sector rose by 2.0 percent to N18.82 trillion during the period, representing a 2.0 percent quarter-on-quarter (QoQ) rise when compared to N18.85 trillion in Q1’20.

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Meanwhile, the value of electronic payment transactions fell by 21 percent to N263.78 trillion in Q2’20 from N334.53 trillion in Q1’20 while its volume fell by five percent to 2.16   billion from 2.21 billion in Q1’20.

In its Sectoral Banking Sector Data Report for Q2’20 released on Wednesday, the National Bureau of Statistics, NBS, noted that Online Transfer transactions dominated the volume of transactions with volume of 1.3 billion transactions valued at N72.25 trillion in Q2’20.

The report stated: “A total volume of 2,160,436,659 transactions valued at N263.78 trillion were recorded in Q2’20 as data on electronic payment channels in the Nigeria banking sector revealed.

“Online transfer transactions dominated the volume of transactions recorded. 1,317,621,686 volume of OnlineTransfer transactions valued at N72.25 trillion were recorded in Q2’20.

“In terms of credit to private sector, the total value of credit allocated by the bank stood at N18.82 trillion as at Q2’20.

“Oil & Gas and Manufacturing sectors got credit allocation of N3.62 trillion and N3.07 trillion to record the highest credit allocation as at the period under review.

“As at Q2’20, the total number of banks’ staff decreased by -2.55 percent QoQ from 96,975 in Q1 ’20 to 94,498.”



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