CBN orders debit of debtors' accounts as GTB, First Bank, 2 others record N478bn in bad loans

About four banks in Nigeria recorded N478 billion in non-performing loans during the first half of 2023, results from their financial records show.

Guarantee Trust Bank Holding, FBN Holding, and two others reported about N478.93 billion in non-performing loans in the half-year ending June 2023.

First Bank highest hit with non-performing loans

The figure represents almost 16% of N413 billion reported in the year ending December 31, 2022.

Punch reports that with about 4.3% in non-performing loans ratio and N5.26 trillion gross loans and advances, FBN Holdings recorded N226.24 billion non-performing loans by value in the first half of 2023, from N2024.29 reported in 2022.

The banks declared a 5.4% non-performing loan ratio and N3.79 trillion gross loan and advances in the 2022 financial year.

GTBank records N115.29 billion in non-performing loans

Guarantee Holding declared N115.29 billion non-performing loan by the value of the half year 2023, from N103.37 billion reported in the 2022 financial year.

The bank said in its presentation to investors and analysts that the Group’s IFRS Stage 9 Stage 3 loans closed at 4.6% in half year 2023 from 5.2% in 2022.

The bank stated that individuals and other emerging sectors have the highest non-performing loans, representing 20.9% and 30,96%, respectively.

Fidelity Bank reported about N84.73 billion as of the first half of 2023 from N61.37 billion, while FCMB group declared N52.66 billion in Non-performing loan value as of the first of 2023 from N45.01 billion in 2022.

CBN orders banks to debit defaulters across financial institutions

The development has led to banks in Nigeria writing off bad loans as they also continued to debit bank accounts of defaulters to reduce non-performing loans.

In 2020, the Central Bank of Nigeria (CBN) released the Global Standing Instruction (GSI) to thaw non-performing loans in the banking industry and monitor persistent debtors, among others.

The CBN’s GSI allows banks to recover the outstanding principal and interest upon default from any account maintained by debtors across all financial institutions in the country.

Recently, the NCC said it will .penalise loan apps which harvests customers phone numbers for marketing purposes.

The NCC stated that it will work with telecoms to fish out the culprits.

On Friday, September 9, 2023, NCC said it has settled the N120 billion USSD debt between the banks and the telecom firms.