CBN Restructures Over 35,000 Customers' Loans In 22 Banks

The Central Bank of Nigeria (CBN) has restructured the loans of 35,640 customers in order to left the loan burden on them amidst the current economic downturn. The loans restructured would have been classified as bad debts if the CBN didn't restructure the loans.

The 35,640 customers' loan package was submitted by 22 banks seeking to restructure the loan and prevent bad debt considering the level of non-performing loans in the banking industry - although, NPLs has improved this year, hitting 6.4 percent last month June, from the 9.4 percent of the corresponding period of 2019; this is thanks to increased recoveries, write-offs and disposals.

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The restructured loans are worth N7.8 trillion - note that the banking sector has a total N18.9 trillion credit. This was revealed by the CBN governor, Godwin Emefiele, who spoke at the Monetary Policy Committee (MPC) meeting yesterday, July 20, 2020, “If the CBN did not ask the banks to grant this forbearance to their customers, the loans will go bad immediately by our prudential ratios,”

Sectors That Benefit From The Loan Restructure

AllNews had reported that three weeks ago that over 32,000 loans for individuals and businesses have been sent to the Central Bank of Nigeria (CBN) for restructuring approval. The loans are for persons and organisations that were affected by the coronavirus pandemic. The request to restructure the loans is one of the many palliatives bank customers are enjoying after CBN cancelled requirements to obtain loan.

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This was made known by CBN deputy governor, Aishah Ahmad, who stated that "As at end-May 2020, staff reports indicate that 17 banks submitted requests to restructure over 32 thousand loans for individuals and businesses impacted by the pandemic, representing 32.94 per cent of the total industry loan portfolio, with the manufacturing and general commerce sectors constituting the bulk of the restructured facilities.” Ahmad said in the notes.

It was added that "Credit to the oil and gas sector accounted for about 26% of the industry’s total loans and advances, making the sector the single most important in terms of credit exposure of the banking system,” Edward Adamu, another monetary policy committee member,” added. This means more banks later applied to restructure their customers loan, hence the increase in customer and loans restructured.