Risk management and specialization in Development Finance has seen the N200 billion bank record less than a percentage of total loans disbursed as non-performing loans. The benchmark by the apex bank requires that not more than 5 percent of total loans be classified as non performing.
Even as operating conditions have eased in the country, the industry asset quality has failed to meet regulatory benchmark in the first two quarters of the year as banks continue to deal with impaired and other problem loans.
After Unity Bank sold off loans in excess of N350 billion, the NPL ratio slate was wiped clean and the retail lender, focused on spurring Agribusiness in the country, has maintained this low NPL into the second quarter of 2019. The tier 2 lender recorded an NPL ratio of 0.63% as at the end of the first quarter 2019.
Analysts are of the view that with continuous efforts to reposition the bank and seize growing opportunities in Agribusiness as a means to diversify earnings base in the retail market, brighter prospects for the bank in the years ahead seem very reassuring.
Other banking sector players have seen the NPL ratio slide in recent times but still above the industry benchmark of 5 percent. Guaranty Trust Bank reported a half year non-performing loan ratio of 6.8 percent sliding from 7.3% in the first quarter of the year. Zenith Bank is close to the 5 percent target as the half year result saw the banks NPL ratio at 5.3 percent, 45 basis points ahead of FY 2019 guidance of 4.85 percent.
Fidelity Bank and Wema Bank reported an NPL ratio that is in the realms of regulatory requirement at the end of the first quarter of the year, the tier 2 lenders reported an NPL ratio of 4.9 percent after the close of the first accounting period of the year. Access Bank (10.0 %), UBA (5.3%), Stanbic IBTC (4.4%).
Source: Business Day Newspaper Ifeanyi John
Source: Business Day Newspaper Ifeanyi John
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