First Bank, Ecobank, 4 Others Generate N891bn From Loan to Customers in Six Months of 2023
- A total of six banks received N891 billion in the first half of the year
- The amount is 47.14% greater than the N605 billion in the same period last year
- The average loan rate in the banking industry rose from 27.61% in June 2022 to 28.94% as of June 2023
Six Nigerian banks collectively generated N891.1 billion from loans and advances to consumers in the first six months of 2023, which ended on June 30.
This represents a 47.14% increase over the N605.63 recorded by the six banks in the first quarter of 2022 after the Central Bank of Nigeria's (CBN) raising of the Monetary Policy Rate (MPR) up to 18.5%
The six institutions include FBN Holdings, Ecobank Transnational Incorporated (ETI), Fidelity Bank Plc, FCMB Group Plc, Sterling Financial Holdings Company Plc, and Wema Bank Plc.
Source: Getty Images
As of June 30, 2023, the six banks reported N18.98 trillion in loans to consumers, up from N13.43 trillion in the 2022 fiscal year.
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Legit.ng earlier reported that Access Bank provided customers with the highest amount of loans and advances in 2022, based on data obtained from audited reports of 11 commercial banks listed on the Nigerian exchange.
Recent report suggests signs that the banking sector is under some liquidity squeeze as they resort to the Central Bank of Nigeria (CBN) for cash.
MPR increased during the period
According to report, the MPR has increased Year-on-Year (Yoy) by 5.5 percentage points, from 13% in June 2022 to 18.5% in June 2023.
In an effort to combat the rising rate of inflation, the CBN's Monetary Policy Committee increased MPR once more, to 18.75%.
As a result of the rise in MPR, the average loan rate in the banking industry rose from 27.61 percent in June 2022 to 28.94 percent as of June 2023.
The breakdown of the N891.1 billion in loans and advances to customers revealed that FBN Holdings reported N254.99 billion in loans and advances from customers in H1 2023, an increase of 53.3% from N166.32 billion in H1 2022, while ETI reported N246 billion, a 46 percent increase from N168.72 billion.
In H1 2023, Fidelity Bank reported N164.04 billion in loans and advances from customers, up 56 percent from N104.84 billion in H1 2022, while FCMB Group recorded N114.41 billion in loans and advances from customers, up 45.3% from N78.75 billion in H1 2022.
With loans to the manufacturing, agricultural, and oil & gas sectors contributing the most to loan book growth, FCMB Group increased its loan book by 37% YoY to N1.5 trillion.
Additionally, Sterling Financial Holdings Company reported N58.18 billion in loan advances to customers in the first quarter of 2023, up 23% from N47.04 billion in the same period the previous year.
Additionally, Wema Bank recorded N53.5 billion in loans and advances to customers in the first half of 2023, an increase of 34% from N39.97 billion in the first half of 2022.
To grow loans during the time period and increase its profit, FCMB Group made use of digital lending.
CBN sets sanctions for top directors taking loans as 4 banks approve over N112bn
Legit.ng earlier reported that the Central Bank of Nigeria (CBN) has taken a stern stance against potential conflicts of interest within the banking sector, introducing stringent sanctions targeting directors of financial institutions who secure loans from the banks they are affiliated with.
This move comes as four commercial banks granted a sum of N122.7 billion in loans and advances to entities controlled by key management personnel and related parties in 2022.
The figures were contained in the banks’ financial accounts for the year ending December 31, 2022.
Source: Legit.ng
