Banking sector’s non-performing loan ratio drops to 4.84%, says Central Bank – The Whistler Nigeria

The Central Bank of Nigeria’s Monetary Policy Committee said banks’ non-performing loan portfolio has improved and is now below the regulatory limit.

This is contained in the MPC statement issued by the apex bank.

The NPL is a measure of access to the stability of the banking system.
The regulatory limit is five percent.

The CBN said: “The MPC also noted the continued resilience of the banking system, as evidenced by the further moderation in the non-performing loan (NPL) ratio to 4.84% in February 2022 from 4.90% in December 2021. .

“The Committee also noted that the liquidity ratio (LR) remained above its prudential limit at 43.5% in February 2022, while the capital adequacy ratio (CAR), slightly moderate to 14.4% in February 2022 from 14.5% in December 2021.”

Commercial banks in Nigeria saw their NPLs jump to 6.3% in the month of February 2020.

This was linked to the inability of private sector operators to repay their loans when the Covid-19 pandemic led to a global economic collapse.

The CBN introduced regulatory forbearance, including the reduction of intervention loans from 9% to 5%, as well as the restructuring of loans to facilitate debt repayment and servicing by the private sector and households.

In October last year, the apex bank said NPLs had fallen to 5.3%, which was slightly above the regulatory limit of 5%.

“Overall, members expressed their confidence in the Bank’s regulatory regime and their commitment to maintaining the stability of the banking system, urging management to maintain its strong regulatory oversight,” the statement added.

Sallie R. Loera