As the loan portfolio of commercial banks exceeds 20tr
Total commercial loans to government, at all levels, amounted to N1700 billion at the end of last year, an increase of about 18% from the N1.5 trillion reported in December 2019.
This comes as the total stock of commercial loans taken out by banks reached N20.4 trillion in December, bringing exposure to government alone to 8.7%.
The numbers are contained in industry data released yesterday by the National Bureau of Statistics (NBS). Public sector lending has grown steadily despite caution that governments’ growing penchant for domestic lending inadvertently crowds out the private sector. Manufacturers have pointed to access to finance as one of the major challenges limiting their competitiveness and responsible for the high rate of business closures.
At the turn of 2019, public sector lending stood at 1.4 trillion naira, increasing throughout the year to 1.5 trillion naira in December. Over the past year, the country has also seen a continuous build-up of advances in the public sector. It stood at 1.6 trillion naira at the end of September 2020, with the latest quarter adding around 0.2 trillion naira.
The two-year moving average of the government’s share in total commercial loans was 8.5 percent, which was among the highest outside of oil / gas and manufacturing.
The exploration and manufacture of oil and gas benefited from generous loans, receiving respectively 3,900 and 3,200 billion naira. Their share in the total loan portfolios of banks 19.3% and 15.7% respectively. Agricultural credits were also reasonably high at 1.05 trillion naira in December 2020.
The ailing electricity and energy sector is among the least funded with a paltry installation of 0.44 trillion naira. According to the data, total non-performing loans (NPLs) edged up from 6.01% to 6.02% year-on-year, 1.02 percentage point above the industry benchmark of 5%.
The NPL has returned from its peak of around 38% recorded in 2010, but has yet to meet the Central Bank of Nigeria (CBN) target.
In its summary, the report states: âA total volume of 3,464,811,083 transactions worth 356.47 billion naira was recorded in the fourth quarter of 2020, as data on electronic payment channels revealed. in the Nigerian banking sector. Online transfers dominate the volume of recorded transactions; A volume of 2,227,449,949 online transfer transactions worth 120,270 billion naira was recorded in the fourth quarter of 2020. ”
According to the report, the total number of bank employees fell 0.9 percent, from 95,888 to 95,026, between October and December.