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Business News of Monday, 14 September 2020

Source: Economic Confidential

Bank loans to real estate operators now N666.73bn

The banks had gradually reduced the bad debts in their books in recent years The banks had gradually reduced the bad debts in their books in recent years

The total loans by banks to operators in the real estate sector rose to N666.73bn as of the end of second quarter of 2020 from N651.62bn in the first quarter of 2020.

The National Bureau of Statistics disclosed this in its ‘Selected banking sector data’ report for the second quarter of 2020.

It also disclosed that the non-performing loans of real estate operators from the banks rose by N11.8bn from N63.07bn in the first quarter of 2020 to N74.89bn in the second quarter of 2020.

In terms of credit to private sector, the total value of credit allocated by the bank stood at N18.82tn as at Q2 2020, according to the NBS.

Banks’ non-performing loans stood at N1.2tn as of the end of June, representing about 6.4 per cent of the gross credit of the banks to the economy in the period under review.

The latest statistics showed that the banks had gradually reduced the bad debts in their books in recent years.

This was linked to increased recoveries, write-offs and disposals by the lending institutions according to the Central Bank of Nigeria.

At the end of the last Monetary Policy Committee Meeting, the Central Bank of Nigeria Governor, Godwin Emefiele, affirmed that the non-performing loans had decreased in the sector.

He said, “The committee noted the decrease in NPLs ratio to 6.4 per cent at end-June 2020 from 9.4 per cent in the corresponding period of 2019, on account of increased recoveries, write-offs and disposals."

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