By Oluwaseun Ayodeji
Guaranty Trust Holdings Company Plc (GTCO), Zenith Bank Plc, FCMB Group and Stanbic IBTC Holdings Plc have reported N295.3biillion Non-Performing Loan (NPL) or bad loans in half year ended June 30 2021, Standard Timescan report.
This is an increase of 164 per cent from N180.37billion reported in full year ended December 31, 2020.
The Governor, Central Bank of Nigeria (CBN), Godwin Emefiele at the last Monetary Policy Committee (MPC) said the NPL ratio in the banking sector dropped to 5.4 per cent in July 2021, compared with 5.7 per cent in June 2021.
According to him: “The Committee thus, urged the Bank to sustain current efforts to bring NPLs below the 5.0 per cent prudential benchmark.”
Standard Times can report that Zenith Bank reported N134.85billion NPL by value as at June 30, 2021 from N125.2billion reported in 2020 FY.
The lender report an NPL ratio of 4.51 per cent as of June 2021 compared to 4.29 per cent in 2020, mostly due to an increase in oil and gas NPL.
Zenith Bank has a diverse loan portfolio of N2.99 trillion out of which Upstream and Downstream oil and gas numbers are 18.4per cent and 4.9per cent respectively, totaling 23.3 per cent of total loan portfolio.
The bank informed investors it diversified its portfolios over the last one year to support asset quality.
The bank reported 29.9per cent of its NPLs are oil and gas-related loans, out of which its oil and gas loans amount to about N40 billion as at June 30, 2021.
However, Zenith Bank’s oil and gas NPLs of about N40 billion means just 5.9per cent of total oil and gas loans are bad, a slight increase from the same period in 2020.
According to the bank, Oil and gas loans as a percentage of NPLs was 29.87per cent in 2020 or N37.3 billion.
The bank also reported that foreign currency loans as of June 2021 was $2.8 billion, a drop from $3.1 billion reported same period in 2020 FY.
Again, oil and gas-related loans make up its largest chunk with about $1.41billion, though down from $1.61 billion a year earlier.
Zenith Bank has also restructured about 37per cent of its oil and gas loans.
General Commerce and Communication also contributed 24.30 per cent and 24.13 per cent to the bank’s NPL as at June 30, 2021 as against 24.70 per cent and 24.27 per cent recorded in 2020 FY.
The bank said, it is engaging customers in key sectors of the economy to better understand their current challenges and provide effective and bespoke actions to alleviate their hardships while preserving shareholders’ funds.
The bank explained further that: “Providing critical support to our loan customers to help them navigate through the challenges posed by the pandemic.”
GTCO reported NPL ratio of 5.99 per cent as at June 30, 2021 from 6.39 per cent in 2020 to account for N102.73billion NPL by value as against N111.46billion reported in 2020.
Stanbic IBTC Holdings reported N25.47billion NPL by value as at June 30, 2021 from N26.49billion in 2020 FY, while FCMB group grew its NPL by value to N32.21billion as at June 30, 2021 from N28.6billion reported in 2020 FY.
FCMB had explained that growth in NPL was largely driven by slight deterioration in individual’s loan book and interest on existing NPLs.
Further finding revealed that Stanbic IBTC Holdings reported NPL ratio of 3.2 per cent and N790.6billion gross loans and advances to customers as at June 30, 2021 against NPL ratio of 4.0 per cent and N655.3 billion gross loans and advances to customers reported in 2020 FY.
Construction & real estate and Agriculture sector accounted for 14.4 per cent and 12.6 per cent of Stanbic IBTC NPL ratio as at June 30, 2021 from 15.4 per cent in 2020 FY respectively.
Stanbic IBTC restructured loans as at June 30, 2021 was N62.66billion with Covid-19 related accounting for N50.97billion while Non Covid-19 related was N11.69billion.
In addition, foreign currency NPL by value contribution was N5.1billion or 20 per cent of the total NPL by value as at June 30, 2021 while local currency contributed N20.4billion or 80 per cent of the N25.47billion NPL by value of Stanbic IBTC.
