Nigerian Banks which are dealing with lower oil prices, a weak economy and the coronavirus pandemic, will see bad loans double by the end of next year, according to forecasts by rating agency Standard and Poor’s (S&P).
Samira Mensah Director, Financial Institutions Ratings a S&P expects industry Non performing Loans (NPLs), which fell to 6 percent at the end of 2019 to double to 12 percent at the end of 2021.
“This is due to the increase in NPLs in stage 2 loans from about 20 percent to 25 percent,” Mensah said during an interactive webinar titled ‘Nigeria: Wrapping Up A Difficult Year Navigating A Pandemic And Oil Price Collapse’ monitored by MoneyCentral.
S&P Global ratings which rates 90 percent of banking assets in Nigeria, expects bank profitability to take a hit next year (2021), due to the lower interest rate environment.