The total non-performing loans in the banking sector hit N1.21tn as of the end of February 2022, figures obtained from the Central Bank of Nigeria have revealed.

The CBN stated in reports obtained from the Monetary Policy Committee that the total credit in the sector rose to N25.25tn as of the end of February 2022 from N21.13tn as of the end of February 2021.

It stated that the non-performing loans reflected the case-by-case review of regulatory forbearance, effects of the Global Standing Instruction policy, and sound industry risk management practices.

A member of the MPC, Kingsley Obiora, said the banking system maintained its resilience amid economic recovery.

He said, “Overall, the industry credit increased by 19.53 per cent to N25.25n in February 2022 from N21.13tn in February 2021. The industry NPL ratio continued to trend below the prudential threshold of five per cent.

“It decreased to 4.80 per cent at the end of February 2022 compared with 6.38 per cent in February 2021. The downward trend was attributable to recoveries, restructuring of facilities and sound management practices by DMBs (Deposit Money Banks).”

The Deputy Governor, Financial Systems Stability Directorate, CBN, Aishah Ahmad, said, “Total credit also increased by N4.13tn between end February 2021 and end-February 2022 with significant growth in credit to manufacturing, general commerce, and oil and gas sectors.”

She added that the non-performing loans ratio declined further to 4.8 per cent in February 2022, from 4.94 per cent in December 2021.

A member of the MPC, Robert Asogwa, said, the financial sector remained strong similar to the position at the last MPC meeting especially looking at the banking and capital market developments.

He said the banking sector appeared sound and resilient with a considerably high Capital Adequacy Ratio and Liquidity Ratio in February 2022, in line with prudential requirements.

With a persistently lowering non-performing loan ratio since 2021 despite the shocks caused by the COVID-19 pandemic, he said the asset quality of the banking system was now one of the strongest in Sub-Sahara Africa.

He said, “Bank intermediation continued to improve in February 2022 with industry total credit increasing from N24.6tn in January 2022 to N25.25tn in February 2022.”

“The extension of the moratoria on bank loans up to the middle of 2022 as part of the COVID-19 relief measures continues to alleviate the burden on the borrowers impacted severely by the pandemic.”