The total volume of non-performing loan stock in banks dropped to N1.169 trillion in the third quarter of 2020, representing a 3.5% fall when compared to the second quarter value of N1.212 trillion.
This was part of the banking sector report released by the National Bureau of Statistics (NBS).
Techeconomy.ng understands that the non-performing loan (NPL) is a loan in which the borrower is in default and hasn’t made any scheduled payments of principal or interest over a certain period of time.
The report stated that the general commerce sector achieved the highest dip of 12.79% in the NPL, moving from N171.55 billion in Q2 2020 to N149.60 billion in Q3 2020, followed by the Oil and Gas sector that decreased to N238.26 billion in Q3 2020 from N268.79 billion in Q2 2020, a dip of 11.36%.
According to the report, the highest surge in the NPL volume was contributed by the Transportation and Storage sector with 26.87%, with the NPL volume increasing to N46.99 billion in Q3 2020 from N37.04 billion in Q2 2020, followed by Power and Energy with 6.17%, moving from N30.81 billion in Q2 2020 to N32.71 billion in Q3 2020.
See the key highlights below:
The NPL volume as at Q3 2020 increased by 6% (YoY) compared to what it was in Q3 2019.
The Gross loan portfolio (GLP) of the banks increased by 17% in Q3 2020 compared to Q3 2019 (YoY) and 3% compared to Q2 2020 (QoQ).
The Specific provisions rose by 3% in Q3 2020 compared to Q3 2019 (YoY) and reduced by 0.8% compared to Q2 2020(QoQ).