Banks non-performing loans drop in 2018

The Central Bank of Nigeria (CBN), says that the total amount of non-performing loans of Nigerian banks declined to N1.79 trillion in 2018.

Figures obtained from CBN revealed that N13.56 trillion was recorded as loans after specific provisions.

According to the data, which was approved by the National Bureau of Statistics, the gross loans as of the end of 2018 stood at N15.35 trillion. This was lower than the N2.36 trillion non-performing loans recorded for 2017 when gross loans in the banking sector were N15.96 trillion.

The apex bank also revealed that loans after specific provisions was N13.56 trillion.

Meanwhile, Mr. Ahmed Kuru, the Managing Director/Chief Executive Officer, Asset Management Corporation of Nigeria (AMCON) has said the total eligible bank assets of AMCON portfolio in the hands of debtors stood at N740 billion.

“It is a well-known fact that amcon has a unique and limited mandate; therefore, AMCON must maximize every opportunity to state its cases with the highest quality of representation, which was why we came up with the amp programme that has been of tremendous development in our efforts to recover debts owed the country by a few individuals who have over the years remained recalcitrant.”

According to the International Monetary Fund (IMF), a loan is non-performing when payments of interest and principal are past due by 90 days or more, or at least 90 days of interest payments have been capitalised, refinanced or delayed by agreement, or payments are less than 90 days overdue, but there are other good reasons to doubt that payments will be made in full.

When this happens, the bank can either work out a new payment option or foreclose on what collateral the borrower has provided. Either option costs the bank money, so lenders try to avoid nonperforming loans whenever possible.