Deposit Money Banks in Nigeria plan to restructure over one-third of loans, owing to repayment problems associated with the effects of the coronavirus pandemic, the Deputy Governor, Financial Systems Stability, Central Bank of Nigeria, Aisha Ahmad, has said.
Ahmad disclosed, in a statement published on the apex bank’s website, late Wednesday, that a total of 17 banks had submitted requests to restructure over 32,000 loans for businesses and individuals, representing 33 per cent of the loans.
According to her, the majority of the loans to be restructured were 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,” the CBN deputy governor explained.
First City Monument Bank had said last month that it was restructuring half of its loans, mainly involving the oil and retail sectors.
The CBN also said that it would allow banks to give customers more time to repay loans and create a fund to combat the impact of the coronavirus pandemic, which triggered an oil price crash and weakened the naira.
CBN staff report showed a marginal increase in the non-performing loans ratio in April as compared to February 2020. Also, there were modest declines in key profitability indicators (ROE and ROA), but increase in industry size at May 2020 still depicts a robust banking system. Even though on average, the banks still have strong capital and liquidity positions despite the threat of COVID-19, it is important that greater supervisory scrutiny is applied to avoid any deterioration should the health crisis deepen any further.
