Nigeria Banks to Restructure 33% of Loans, Central Bank Says
Nigeria Banks to Restructure 33% of Loans, Central Bank Says
Nigerian banks have applied to the Central Bank of Nigeria for permission to restructure 33% of their loans due to the fallout from the coronavirus pandemic and a slump in oil prices, the regulator said.
A total of 17 banks submitted requests to restructure more than 32,000 loans for individuals and businesses impacted by Covid-19 by the end of May, Aishah Ahmad, a deputy governor, said in her Monetary Policy Committee notes published on the regulator’s website Wednesday.
A triple whammy of the coronavirus pandemic, oil-price collapse and dollar shortages have dealt a blow to the economy of Africa’s largest crude producer, hampering the ability of borrowers to meet their obligations to lenders. FCMB Group Plc said in May it plans to restructure half of its loans after impairment charges surged 61% to 3.7 billion naira ($9.5 million) in the first quarter.
Manufacturing and general commerce sectors constitute the bulk of the restructured facilities by lenders, Ahmad said. “The coronavirus-induced global economic crisis is pervasive, with heightened uncertainty for the medium-term economic outlook,” she said in the note prepared after the May 28 meeting of the committee.
“Credit to the oil and gas sector accounted for about 26% of the industry’s total loans and advances, making the sector the single most important in terms of credit exposure of the banking system,” Edward Adamu, another monetary policy committee member, said. “Related to this source of vulnerability is the foreign-currency exposure of the industry which stood at approximately 41% in April 2020.”
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