Banks granted N8.15tn loans in 2012 – NDIC

The total loan portfolio of the banking sector rose by 12.10 per cent from N7.27tn in 2011 to N8.15tn in 2012, according to the Nigeria Deposit Insurance Corporation’s annual report and statement of account.

In the report, a copy of which was made available to our correspondent on Monday, the corporation noted that inspite of the increase in the loan portfolio, the industry’s volume of non-performing loans declined significantly by N73.98bn or 20.55 per cent from N360.07bn in 2011 to N286.09bn in 2012.

It also said the ratio of the NPLs to total loans of the 20 Deposit Money Banks dropped from 4.95 per cent in 2011 to 3.51 per cent in 2012, while that of the shareholders’ funds also declined from 17.13 per cent to 14.34 per cent during the same period.

The report stated, “The industry total loans stood at N8.15tn in 2012, an increase of 12.10 per cent over the N7.27tn reported in 2011. Inspite of that increase, the industry’s volume of NPLs significantly decreased by N73.98bn or 20.55 per cent from N360.07bn in December 2011 to N286.09bn in 2012.

“Accordingly, the average NPLs to total loan ratio decreased by 1.44 percentage points from 4.95 per cent in December 2011 to 3.51 in December 2012, comparing favourably with the industry benchmark of five per cent.”

According to the report, seven DMBs accounted for 80.73 per cent of the total loans in 2012 as against 68.22 per cent in 2011.

The other banks, it stated, accounted for the balance of 19.27 per cent

The top seven banks in terms of loan portfolio are First Bank, Zenith Bank Plc, United Bank for Africa Plc, Guaranty Trust Bank Plc, Access Bank Plc, EcobankPlc and Skye Bank Plc.

On sectoral allocation of credits, the report stated that out of the N8.15tn loan, eight sectors got N6.93tn or 84.93 per cent of total credits to the economy as against 83.53 per cent in the previous year.

The other sectors, it stated, accounted for N1.228tn, representing 15.07 per cent in 2012 as against 16.47 per cent of the total credits extended by the DMBs in 2011.

The eight sectors accounting for the largest share of credits are oil and gas (N1.912tn); manufacturing (N1.185tn); general (N977.20bn); general commerce (N813.40bn); information and communication (N722.87bn); governments (N640.06bn);real estate (N376.58bn); and agriculture, forestry and fishing (N293.09bn).

The corporation, in the 188-page report, further stated that the asset quality of the banking sector improved significantly during the period owing to the banking sector reform, which was carried out in 2009.

It said, “The asset quality of the banking industry significantly improved during the period under review. The observed improved asset quality could be explained by improved process of loan underwriting as well as the continued purchase of NPLs by the Asset Management Corporation of Nigeria.

“The banking industry’s total assets grew by 10.19 per cent and capital adequacy ratio increased by 0.17 per cent during the period under review. Asset quality also improved as NPLs to total loans ratio declined marginally by 1.28 percentage points.”

[Punch]

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