Zenith Bank, 8 others disburse N16.2trn loans to companies, individuals
By Kayode Tokede
A total of nine banks disburse N16.2trillion loan facilities to companies, individuals as well as government entities in 2020, our correspondent can report.
The nine banks are Zenith Bank Plc, FBN Holdings Plc, Guaranty Trust Bank Plc, United Bank for Africa, Ecobank Transnational, Fidelity Bank Plc, Sterling Bank Plc, Union Bank of Nigeria and Stanbic IBTC Holdings plc.
With the damaging effects of Covid-19 and the devastating effects of #EndSARS protests on businesses and the nation’s economy, Nigerian banks increased lending to both corporate and individual borrowers in a bid to ease financial pressure on the companies and the people.
Similarly, the loan portfolio which increased 16 per cent in 2020 financial year when compared to N13.9 trillion they disbursed in the 2019 financial year, was also attributed to the drive of the Central Bank of Nigeria(CBN) to increase lending in the banking sector by compelling financial institutions to jack-up their loans portfolio.
Of the N16.2 trillion loans granted by these disbursing banks, our correspondent gathered that that 20 per cent, translating to about N3.2 trillion, were granted as consumer loans of whose major beneficiaries were Micro, Small and Medium Enterprises (MSMEs).
Our correspondent analysis of the concerned banks financials revealed that Ecobank Transnational held the largest loan book as its loans and advances to customers as at December 31, 2020 stood at N3.699 trillion compared to N3.383 trillion which it was in 2019, while Zenith Bank had grown its loan book to N2.779 trillion from N2.307 trillion in the preceding year.
United Bank for Africa’s lending to its customers increased to N2.55 trillion from N2.061 trillion as at December 31, 2020. Its lending to corporates stood at N2.465 trillion while its loan facilities to individuals stood at N200.39 billion.
FBN Holdings loans and advances to its customers stood at N2.22 trillion as at December 31, 2020 from N1.85 trillion, while GTBank loan book rose to N1.66 trillion from N1.5 trillion. Union Bank lending to customers stood at N692.8 billion an improvement over N550.61 billion loan book which it had as at December 31, 2019.
Fidelity Bank also grew its loan book to N1.32 trillion from N1.12 trillion. Stanbic IBTC loan book had increased to N632.96 billion from N535.17 billion as at the end of the 2020 financial year while Sterling Bank’s loan book had reduced slightly from N618.73 billion in 2019 to N617.64 billion in 2020.
Lending by banks has been on the rise since the CBN directed banks to increase loan facility to the economy. The CBN, in 2019, announced a benchmark for loan-to-deposit ratio (LDR) which is meant to force banks to provide credit to various sectors in the economy, especially to SMEs, retail, mortgage and consumer lending.
It had directed banks to maintain a minimum 65 per cent credit in line with their total deposit, stating that, any lender who falls short of the ratio will lose part of their capital base to the financial regulator. In order not to lose money to the central bank, creditors have improved their level of borrowing to the Nigerian economy.
The CBN Governor, Godwin Emefiele, rising from the last Monetary Policy Committee (MPC) meeting noted that banking system credit to the economy increased by 1.75 per cent to N43.67 trillion in February 2021 from N42.92 trillion in January 2021.
The MPC members had urged banks to maintain the current drive to improve access to credit to the private sector, while exploring other initiatives with the fiscal authorities to improve funding to critical sectors of the economy.
