Emefiele unmoved amid N1.3trn banks’ NPLs still above 5% benchmark


Non performing loans (NPLs) in the Nigerian banking system stood at N1.3 trillion for the month of November, 2021, according to recent figures obtained from the Central Bank of Nigeria .

The amount is currently above the industry benchmark as it represents 5.4 percent of the total gross credit in the banking sector, which is higher than the 5 percent prescribed by the prudential guidelines.

The apex bank in a communiqué issued on its website in November hard noted that the Monetary Policy Committee at its last meeting urged it (CBN) to sustain current efforts to bring NPLs below 5 percent.

Apparently responding to the situation, Godwin Emefiele, the CBN governor, in a report, observed that “Prudential indicators such as NPLs stood at 5.4 percent in November 2021, while the CAR remained above 15 percent indicating continued resilience of our banking system. Total gross credit rose by over 21.1 percent over the past year, from N19.4 trillion to N23.5 trillion.”

Emefiele went further to buttress the point with how the apex bank was instituting strong policy measures designed to contain the pandemic effect, bring about stability to the economy through the issue of credits to the real sector, adding that the bank is working with the fiscal authorities to lift the economy out of the woods through massive interventions to critical sectors.

“Under the economic sustainability plan, the monetary and fiscal authorities have collectively mobilised and injected over N5 trillion to support households and businesses. It is gratifying to state that the Central Bank of Nigeria deployed more than N3.5 trillion – about 4.1 percent of Nigeria’s GDP to critical sectors such as agriculture, manufacturing, electricity, and healthcare – in order to stimulate and help the economy recover from the deep shock,” he said.

Nevertheless, the apex bank boss reiterated the resilience of the Nigerian banking industry, which has increased its lending to the public recently, despite the challenges of the global COVID-19.

“However, the banking sector remained robust and sound due to prompt response by the central bank in order to prevent an economic crisis from spilling over into a financial crisis. As a result, the banking sector continued to consolidate on the gains of the recovery from the 2016 and 2017 recession. Although we saw some fragilities in the system, they constituted limited risks,” he said during the last Chartered Institute of Bankers of Nigeria’s dinner in Lagos.