Banks suffer N100bn bad loans in power sector

A total of N100.42bn loans advanced by the nation’s banks to power firms have been recorded as non-performing, the latest data from the National Bureau of Statistics have shown.

The power and energy sector, out of 22 sectors/business lines, accounted for the fifth biggest share of banks’ N1.69tn non-performing loans as of April 30.

The total debt owed by power firms to banks stood at N683.93bn at the end of April, according to the NBS data.

A breakdown of banking sector credit to the private sector showed that the power and energy sector got the seventh biggest credit from banks.

The oil and gas sector received the lion’s share (N4.68tn) of the N15.45tn bank loans as of April 30, followed by the manufacturing sector (N2.24tn), governments (N1.37tn) and general commerce (N1.04tn).

The total loan portfolio of power and energy firms is made up of a naira component of N280.42bn and a foreign currency component amounting to N403.51bn, according to the NBS.

Bad bank loans in the power and energy sector saw the smallest decline in one year, falling by 0.59 per cent from N101.07bn as of April 2018 to N100.42bn in April 2019.

The amount of the NPLs fell by 10.71 percent in the oil and gas sector to N777.84bn; by 7.01 per cent in the general commerce to N166.86bn; by 27.72 per cent in the general sector to N151.12bn; by 21.82 per cent in the manufacturing sector to N113.82bn.

The amount of bad loans declined by 51.1 percent in the information and communication sector to N75.98bn; by 61.26 percent in the real estate sector to N65.87bn; by 34.81 percent in the construction sector to N59.23bn; by 46.24 percent in the transportation and storage sector to N54.27bn.

The bad loans recorded in agriculture, forestry and fishing; finance and insurance; education and government sectors dropped by 2.56 percent, 59.68 percent, 32.84 percent and 34.24 percent to N47.53bn, N17.63bn, N8.61bn and N1.72bn, respectively at the end of April 2019.

The bad loans in the remaining sectors, including capital market and arts and entertainment, stood at N49.77bn.