Nigerian banks are on the verge of restructuring more than a third of their entire loan portfolio after encountering repayment troubles on account of the coronavirus pandemic, according to a member of the Central Bank of Nigeria (CBN)’s Monetary Policy Committee, Reuters reported on Thursday.
Seventeen banks have handed in their requests to restructure over 32,000 credit facilities for individuals and businesses, translating to 33% of loans, Aisha Ahmad, a Deputy Governor of the CBN, said in a statement published on the apex bank’s website.
The bulk of the loans planned for restructuring, according to Ms Ahmad, is within the manufacturing and general commerce sectors.
“Results from ongoing impact assessments of COVID-19 effects on impairment by banks indicate a modest impact given regulatory policy measures already implemented,” she said.
Tier 2 lender, FCMB announced in May it was restructuring half of its loans, predominantly involving the oil and gas, and retail sectors.
The CBN said in March that it would offer liberty to lenders to give customers more room to repay loans and generate a fund to address the impact of the coronavirus outbreak, which spurred an oil crash and weakened the naira.
In the pre-COVID-19 days, the central bank compelled banks to lend boost an economy plagued by low growth. However, lenders mindful of a soaring loan pile refrained and got sanctioned for doing so.
Total loans expanded by N3 trillion ($8.31 billion) to N18.6 trillion in one year to 30th April 2020, Ahmad said.
The slump in oil prices has adversely affected energy companies, which have for long been the most favoured sector for bank loans.
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