Banks’ non-performing loans decline by N1.14tn

Between the third quarter of 2018 and the third quarter of this year, the Non-Performing Loan portfolio of the banking sector dropped from N2.24tn to N1.1tn.

This shows a decline of N1.14tn or 50.89 per cent reduction in the banks’ NPL portfolio.

The National Bureau of Statistics disclosed this in its banking sector report which was released in Abuja on Tuesday.

According to the bureau, while the loans provided by the banks have assumed an upward trajectory, the NPLs have been on the decline.

The report, for instance, stated that NPL portfolio in banks dropped from N2.24tn in the third quarter of 2018 to N1.79tn in the fourth quarter of 2018.

The NPLs dropped further from N1.79tn in the fourth quarter of 2018 to N1.67tn, N1.44tn and N1.1tn in the first, second and third quarters of this year, the report said.

Further analysis of the report showed that the oil and gas sector recorded the highest decline of N738.15bn in NPLs. The sector’s NPL dropped from N1tn in the third quarter of 2018 to N264.2bn as of the third quarter of this year.

This was followed by power and energy sector which recorded  N116.01bn decline in NPL from N163.89bn to N46.88bn.

Similarly, real estate sector recorded a decline of N74.02bn in NPL from N130.58bn to N56.56bn, manufacturing N43.67bn from N144.31bn to N100.64bn, general commerce recorded decline of N38.22bn from N186.33bn to N148.11bn.

Also, transportation and storage recorded a decline of N32.27bn from N92.8bn to N60.54bn; finance and insurance N35.42bn from N40.36bn to N5.94bn, while general, information and communication, and professional and technical activities recorded NPL drops of N26.42bn, N39.4bn and N5.19bn respectively.

Similarly, construction sector recorded a decline of N9.25bn in NPL; administrative and support services N620m, human health N1bn; arts and entertainment N2.36bn, and public utilities N450m.

However, while 16 sectors recorded decline in NPL portfolio, about four others recorded a slight increase in NPLs.

The sectors with increased NPLs are agriculture which rose by N1.63bn from N48.33bn to N49.96bn; government which recorded increase of N730m from N550m to N1.28bn; water supply from N1.63bn to N2.24bn indicating a growth of N610m while education recorded increase of N4.22bn from N4.46bn to N8.69bn.

The NBS report also stated that the banking sector recorded 800,201,498 volume of transactions valued at N42.76tn within the third quarter of this year.

The bureau stated that Nigerian Interbank Settlement System Instant Payments transactions dominated the volume of transactions recorded.

It said about 298,988,572 of NIP transactions valued at N26.18tn were recorded in the third quarter.

In terms of credit to private sector, the report put the total value of credit allocated by the banks at N16.25tn as of the end of the third quarter.

The report stated that oil and gas and manufacturing sectors got N3.39tn and N2.57tn to record the highest credit allocations during the period under review.