Some Nigerian banks may be plunged into another round of crisis over N5 trillion loans granted to some energy firms in the last two years.
Nigerian Deposit Insurance Corporation (NDIC) has bemoaned the increased rate of non-performing loans in the sector. It increased from N286.09 billion in 2012 to N354.84 in 2014 and further to N546.02 billion as at March 2015. The slump in the international market may likely jack up the loans.As found out by NDIC , there is an increased loan concentration in some sectors including oil and gas; state governments that have been receiving knocks in recent times over backlog of unpaid salaries.
Central Bank of Nigeria (CBN) statistics showed that in 2014, non-performing loans in the banking sector rose to N440 billion. Interestingly, this amount triples the amount budgeted for the National Assembly in 2015, and that of five states combined in 2015, including Borno N175 billion; Benue N98.54 billion; Zamfara, N92.80 billion; and Ebonyi N80.02 billion.
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Godwin Emefiele,CBN Governor
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In 2014, banking industry total loans and advances stood at
N12.63 trillion. It increased by 25.73 per cent in contrast with N10.04
trillion granted in 2013.
NDIC disclosed the industry’s volume of non-performing loans increased by 10.26 per cent from N321.66 billion in 2013 to N354.84 billion in 2014 and N546.02 billion as at March 2015.
Despite this development, banking industry non-performing loans to total loans ratio improved from 3.20 per cent in 2013 to 2.81 per cent in 2014.
To curtail this, Vanguard reports that the CBN had instructed banks to publish names of defaulters in three national dailies.
Some banks have stopped lending to oil marketers as a result while this accounted for the scarcity of petrol experienced in the country.
The medium’s report also said banks whose annual reports indicated signs of exposure have wielded the big stick by sacking and redeploying staff.
Figures compiled by Sweetcrude on nine of the listed banks showed that the banks gave out a total of N4.668 trillion to energy firms in two years; N2.01 trillion in 2013 and N2.656 trillion in 2014.
The breakdown is as follows:
First Bank Nigeria Plc – N1.47 trillion distributed into N621.43 billion in 2013, and N843.767 billion;
Guaranty Trust Bank Plc – N715.417 billion: N289.745 billion in 2013, and N425.672 billion in 2014;
Access Bank Plc – N572.988billion: N243.065 billion in 2013, and N329.923 billion in 2014;
United Bank for Africa Plc – N548.359billion: N260.479 billion in 2013 and N287.88 billion in 2014;
Skye Bank Plc – N449.08billion: N209.08 billion in 2013 and N240 billion in 2014;
First City Monument Bank Plc – N305.307billion: N131.286 billion in 2013 and N174.021 billion in 2014;
Sterling Bank Plc – N253.33 billion: N145.326 billion in 2013, and N108.004 billion in 2014, and;
Union Bank Nigeria Plc – N193.6 billion: N77.037 billion in 2013, and N116.56 billion in 2014.
NDIC’s findings showed that some of the banks discreetly gave out loans without due process to some of their current or former board members and management executives.
Umaru Ibrahim,Managing Director/Chief Executive Officer, NDIC, added that 15 banks had a breach of insider-related facilities as a percentage of their respective paid-up capital contrary to the provisions of the CBN.
Ibrahim explained that the CBN in a circular, Ref. No. BSD/09/2004, dated 16th July, 2004, restricted the amount directors or significant shareholders can borrow to 10 per cent of paid up capital. “However, we had a bank whose insider-credit was more than 700 per cent of its paid-up capital,” he said.
NDIC disclosed the industry’s volume of non-performing loans increased by 10.26 per cent from N321.66 billion in 2013 to N354.84 billion in 2014 and N546.02 billion as at March 2015.
Despite this development, banking industry non-performing loans to total loans ratio improved from 3.20 per cent in 2013 to 2.81 per cent in 2014.
To curtail this, Vanguard reports that the CBN had instructed banks to publish names of defaulters in three national dailies.
Some banks have stopped lending to oil marketers as a result while this accounted for the scarcity of petrol experienced in the country.
The medium’s report also said banks whose annual reports indicated signs of exposure have wielded the big stick by sacking and redeploying staff.
Figures compiled by Sweetcrude on nine of the listed banks showed that the banks gave out a total of N4.668 trillion to energy firms in two years; N2.01 trillion in 2013 and N2.656 trillion in 2014.
The breakdown is as follows:
First Bank Nigeria Plc – N1.47 trillion distributed into N621.43 billion in 2013, and N843.767 billion;
Guaranty Trust Bank Plc – N715.417 billion: N289.745 billion in 2013, and N425.672 billion in 2014;
Access Bank Plc – N572.988billion: N243.065 billion in 2013, and N329.923 billion in 2014;
United Bank for Africa Plc – N548.359billion: N260.479 billion in 2013 and N287.88 billion in 2014;
Skye Bank Plc – N449.08billion: N209.08 billion in 2013 and N240 billion in 2014;
First City Monument Bank Plc – N305.307billion: N131.286 billion in 2013 and N174.021 billion in 2014;
Sterling Bank Plc – N253.33 billion: N145.326 billion in 2013, and N108.004 billion in 2014, and;
Union Bank Nigeria Plc – N193.6 billion: N77.037 billion in 2013, and N116.56 billion in 2014.
NDIC’s findings showed that some of the banks discreetly gave out loans without due process to some of their current or former board members and management executives.
Umaru Ibrahim,Managing Director/Chief Executive Officer, NDIC, added that 15 banks had a breach of insider-related facilities as a percentage of their respective paid-up capital contrary to the provisions of the CBN.
Ibrahim explained that the CBN in a circular, Ref. No. BSD/09/2004, dated 16th July, 2004, restricted the amount directors or significant shareholders can borrow to 10 per cent of paid up capital. “However, we had a bank whose insider-credit was more than 700 per cent of its paid-up capital,” he said.
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