FBN Holdings leads Tier-1 banks with N520bn Non-Performing Loans

FBN Holdings Plc leads Tier-1 banks in Non-Performing Loans (NPL) performance for 2017 financial year.

Tier-1banks comprises of FBN Holdings, Zenith Bank, United Bank for Africa Plc (UBA), Guaranty Trust Bank Plc (GTBank) and Access Bank Plc.

The group NPL thus dropped to N520 billion, 11 per cent below N584.2 billion reported in 2016.

With N520 billion bad loans, the group’s Non-Performing Loan/Gross Loans was highly above the Central Bank of Nigeria five per cent threshold to 22.8 per cent in 2017 from 24.4 per cent reported in 2016.

In the same financial year, Zenith Bank’s NPL hits N105.87 billion from N 91.74 billion in 2016.

Zenith Bank’s NPL ratio appreciated by 55.6 per cent to 4.70 per cent in 2017 from 3.02 per cent reported in 2016

Findings by Business247News Online revealed that UBA, and GTBank reported NPL ratio above the CBN requirement while that of Access Bank moderated at 4.8 per cent in 2017 from 2.1 per cent in 2016.

UBA’s NPL ratio reached 6.7 per cent in 2017 from 3.9 per cent in 2016.

UBA in a presentation to investors, said, “the spike in NPL is largely due to the classification of a major exposure in the ICT sector, which should be resolved soon. Given pour conservative provision on the exposure, we do not expect any further charge. Thus, both NPL ratio and cost of risk should begin to moderate from 2018.”

“Heightened NPL in Telecoms is in accordance with Group’s stance on strict compliance with applicable accounting standard which led to the classification of a single exposure within this sector. This classification also negatively impacted the overall NPL of the Group closing at 7.66 per cent in 2017 from 3.66 per cent in 2016,” GTBank explained in a presentation.

In another statement, the management of GTBank said, “In terms of Assets quality, NPL ratio increased to 7.7 per cent in December 2017 from 3.7 per cent in December 2016 largely as a result of classification of a single exposure within the Nigerian Telecommunications Industry. “However, non-performing loans would moderate to 4.6 per cent, which is below regulatory threshold, if we exclude this name from NPL ratio computation.”