A third of Nigeria bank loans to be restructured – MPC member reveals
Nigerian banks are planning a restructuring over a third of its loans after running into repayment problems due to the coronavirus pandemic, a member of the central bank monetary policy committee has said.
A statement by the Deputy Governor of the Central Bank of Nigeria, Aisha Ahmad on the central bank’s website indicates that a total of 17 banks have submitted requests to restructure over 32,000 loans for businesses and individuals, representing 33% of loans.
According to the Deputy Governor, the majority of the loans to be restructured were within the manufacturing and general commerce sectors.
Aisha Ahmad - Deputy Governor, Central Bank of Nigeria,
“Results from ongoing impact assessments of COVID-19 effects on impairment by banks indicate a modest impact given regulatory policy measures already implemented,” Ahmad said.
Mid-tier lender First City Monument Bank (FCMB) said in May that it was restructuring half of its loans, mainly involving the oil and retail sectors.
In March this year, the central bank said it would allow lenders to give customers more time to repay loans and also create a fund to combat the impact of the coronavirus pandemic, causing an oil price crash and a weakened currency.
Before the outbreak of the pandemic in Nigeria, the central bank forced banks to lend to stimulate an economy stalled in low growth. But lenders wary of an increasing loan pile held back which they may be penalized for.
Loans sum up grew from 3 trillion naira ($8.31 billion) to 18.6 trillion naira over the last year ending in April, Ahmad said.
Again, crush on oil price also affected energy companies, but most favoured the banking sector loans. Also according to a member of Monetary Policy Committee member of the central bank, Adamu Lametek, credit to the oil sector accounted for 26% of all corporate loans in April.