Yemisi Izuora
Seventeen banks have approached the Central Bank of Nigeria, seeking regulatory backup to restructure over 32,000 loans for individuals and businesses impacted by COVID-19.
Deputy Governor of the Bank, Aishah Ahmad, said this volume of request represents 32.94 per cent of the total industry loan portfolio.
She made the disclosure in her monetary Policy Committee notes shared via the Twitter handle of the apex bank.
She said, “As at end-May 2020, staff reports indicate that 17 banks submitted requests to restructure over 32 thousand loans for individuals and businesses impacted by the pandemic, representing 32.94 per cent of the total industry loan portfolio, with the manufacturing and general commerce sectors constituting the bulk of the restructured facilities.”
Ahmad explained that the results from ongoing impact assessment of COVID-19 effects on impairment by banks indicate modest impact given regulatory policy measures already implemented, adding that these, coupled with close monitoring by authorities and enhanced risk management practices by financial institutions, would help to mitigate the emerging risks and preserve financial system stability. Central Bank of Nigeria Communique No. 130 of the Monetary Policy Committee Meeting held on May 28, 2020, with Personal Statements of Members.
She said 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,” Ahmad said.
FCMB said in May that it was restructuring half of its loans, mainly involving the oil and retail sectors. The central bank in March said it would allow lenders 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 currency. Before the pandemic, the central bank forced banks to lend to stimulate an economy mired in low growth.
Total loans grew N3 trillion to N18.6 trillion over the last year ending in April, Ahmad said. The oil price crash also hurt energy companies, long the most favoured sector for bank loans.
In April, credit to the oil sector accounted for 26 per cent of all corporate loans, another MPC member, Adamu Lametek, said in the statement.