Analysts fret Banks’ asset quality...
“From my observation in Q4 2018, there has been no significant improvement in the price of oil which is vital to the performance of the budget and the banking sector. Should the trend persist in 2019, banks NPL would pile up. However, we cannot be certain for now until the report for Q4 2018 is released”, Saheed added
Businessday analysis of the investor report of Tier-1 lenders showed that the cumulative average of NPL ratio stood at 8.38% in the first nine months of 2018, an improvement over 9.00% in full year of 2017.
On the other hand, the cumu- lative average of NPL ratio of six Tier-2 lenders improved by 2.71% basis points to 7.27% in the first nine months of 2018 from 9.98% in 2017 FY.
The analysis showed that Access Bank (4.7%), Stanbic IBTC (4.7%) and Zenith Bank (4.9%) had NPL ratio within the regulatory threshold of the Central Bank of Nigeria, thus reflecting their good asset quality.
Overall, the average NPL ratio of 11 lenders captured in the analysis, improved to 7.77% in the first nine months of 2018 as against 9.54% in 2017FY, although still 2.77% higher than the regulatory benchmark of the CBN.