Nigerian Bank Nigeria Afribank Nigeria Plc – Rescued Banks Toxic Assets Rise Above N1 Point 5trn

Source sunnewsonline: Omodele Adigun, January 14 2010.

The total non-performing loans of the eight rescued banks is now more than N1.5 trillion, about N381 billion higher than the figure of the first five banks, whose managing directors were sacked by the Central Bank of Nigeria (CBN) last August.

According to the Director-General of the Nigerian Stock Exchange (NSE), Prof (Mrs) Ndi Okereke-Onyiuke, the figure represents more than 60 per cent of the total non-performing loans in the banking industry. She disclosed this on Tuesday in Lagos during her annual review of market performance and the outlook for the new year.

Reviewing the operating environment for 2009, she said: “The economy operated under a turbulent environment, characterised by massive deceleration in money supply and credit, an energy crisis, problematic oil and gas sector, a weakening exchange rate, and fresh initiatives on banking sector reform among other other developments.”

On the banking reform, she stated: “The total non-performing loans (NPLs) of the eight banks[ whose MDs were sacked] was N1.524 trillion, which represented 60.75 per cent of the industry’s total NPLs, while the total deposit liability of the affected banks stood at N3.019 trillion or 34.52 per cent of total banking sector deposits.”

It would be recalled that the CBN Governor, Mallam Sanusi Lamido Sanusi, stated that the aggregate non-performing loans of Union Bank, Oceanic Bank, Intercontinental Bank , Afribank and Finbank was N1.143 trillion, or 40.81 percent, of total loans while announcing the sack of their MDs last year.

Giving the fact file on the banks, he said: “To assess the systemic risk posed by the five institutions in the absence of any official action, it is worth focusing on a few key numbers. Three of the five banks were considered systemically important, each accounting for more than 5 per cent of assets and deposits in the system. In aggregate, as of end of May , they represented 39.93 percent of loans by the banking sector, 31.47 per cent of its assets, and 29.99 per cent of its deposits.

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