Earlier, NBS released the selected banking data report for the last quarter of 2020. The report revealed growth in gross loans by 16.6% and 5.3% y/y and q/q respectively. Similarly, absolute NPL ( Non Performing Loans) increased 16.0% and %.%% y/y and q/q respectively.
In a report released by United Capital, analysts attribute the reasons for the increased growth in loans to devaluation of naira, making foreign loans attractive when converted to local currency. Also, CBN’s regulatory directive which saw LDR ratio increase to 65%. In addition, the decline in NPL ratio was attributed to the CBN’s regulatory forbearance which allowed banks to restructure their loan books, particularly in sectors vulnerable to the shocks ignited by the Covid-19 pandemic.