High NPLs May Shrink Banks’ Credits, Dividend – Stakeholders

It has become worrisome among financial stakeholders in the country that the prevailing high non-performing loans (NPLs) of banks in the country may bring banking to a halt; a situation whereby banks may find it difficult to give credits to customers and pay a dividend to shareholders.

Latest reports by an international rating agency- Moody’s Investors Service last week, warned that profitability among Nigerian banks could decline this year. This is on account of lower yields on government securities, as well as a likely reduction in income from derivatives

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The report said non-performing loans and associated provisions in the banking system will increase marginally in a delayed response to sluggish economic growth experienced last year, as it expects them to range between 15.5 per cent and 18 per cent of gross loans over the outlook period.