Non-performing loans ratio decline further to 4.8%, says CBN

A member of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), has disclosed that the banking sector’s non-performing loan ratio declined further to 4.8 per cent in February 2022, from 4.94 per cent in December 2021.

The Deputy Governor, Financial System Stability, CBN, Ahmad, Aishah in her personal statement during the March 2022 MPC meeting, noted that the decline reflected the case-by-case review of regulatory forbearance, effects of the Global Standing Instruction (GSI) policy, and sound industry risk management practices.

The statement said: “The financial system remains resilient and continues to provide significant support for the domestic recovery.

“Data provided by Bank staff showed stability in broad financial soundness indicators and sustained improvement in asset quality, alongside growing credit to the private sector.

“Capital adequacy as at February 2022 was robust at 14.40 per cent. Industry liquidity was also strong at 43.5 per cent over the same period.”

She disclosed that total assets in the banking sector rose to N62.01trillion in February 2022 from N52.32 trillion in February 2021, while total deposits rose to N39.38trillion from N32.69trillion over the same period.

She added added: “Total credit also increased by N4.13 trillion between end February 2021 and end-February 2022 with significant growth in credit to manufacturing, general commerce, and oil & gas sectors.

“The continued growth in credit particularly to output enhancing sectors is expected to further support economic recovery.

“However, sustained regulatory vigilance is required to mitigate any potential crystallization of credit risk in the financial system from lingering macroeconomic risks.”