Nigerian Banks to Expect Increase In Non-Performing Loans In 2016


The managing director and chief executive of Sterling Bank Plc, Yemi Adeola, has said the banking industry should expect an increase in non- performing loans (NPLs) even as they pursue a less aggressive loan growth in 2016.

Adeola in an interactive session with newsmen in Lagos, stated that in an economy that is facing challenges, the possibility for the rate of loan repayment to drop is high.

He said:“ You cannot have an economy that is this stressed and delinquency will not be on the increase so we expect that there will be an increase in delinquency.”

According to him, many banks would not pursue an aggressive loan book growth as “you do not pursue an aggressive loan growth in a challenging period such as the one Nigeria is facing right now.”

However, he said Sterling Bank Plc would grow its loan book by 20 to 25 per cent in 2016 as it focuses on key critical sectors that do not require foreign exchange to run such as agriculture, health, education, solid minerals and shelter.

Noting that Sterling Bank was targeting a double digit growth and an NPL of less than the regulatory five per cent band, Adeola said due to the challenging operating environment that banks were faced with in the country, there could be possible mergers and acquisitions in the country.

“You could see one or two international bank take over or merge with Nigerian banks. We are open to anything that will give us skill, key synergies must be there, any merger must be such that stakeholders will benefit,” he stated, adding that there were already talks between some local and international banks.

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