The Central Bank of Nigeria (CBN) has reported a decrease in the Non-Performing Loans (NPLs) of Nigerian banks, which fell to 3.9 percent in June 2024, down from 4.8 percent in April 2024.
This information was disclosed by members of the CBN’s Monetary Policy Committee (MPC) in their personal statements during the 296th MPC meeting held in July, as recently released by the central bank.
MPC member Bala Bello highlighted that the reduction in NPLs reflects improved risk management practices within the industry and the effective implementation of regulatory measures such as the Global Standing Instruction (GSI) policy aimed at curbing bad loans.
Another MPC member, Bandele Amoo, noted that the Nigerian banking sector remained relatively stable and sound as of July 2024.
He stated that key financial indicators like the NPL, Capital Adequacy Ratio (CAR), and Liquidity Ratio (LR) were within the prescribed regulatory thresholds.
This update comes as the MPC raised the country’s interest rate to 26.75 percent last month to address the rising inflation rate, which reached 34.19 percent in June 2024.
The CBN had earlier announced new minimum capital requirements for Nigerian banks in April 2024 as part of efforts to achieve Nigeria’s $1 trillion economy target.
Notably, in July 2020, the CBN introduced the GSI policy to enhance loan recovery across the banking sector, which has been in effect since August 1, 2020.
