27.2 C
Monday, June 5, 2023

FCMB to Restructure Half Its Loans As Defaults Surge

Must read

- Advertisement -
- Advertisement -

FCMB Group Plc plans to restructure half of its loans after plunging oil prices, the coronavirus lockdown and a naira devaluation hindered the ability of the bank’s clients to repay their debt.

The measures by FCMB come after impairment charges surged 61 percent to N3.7 billion ($9.6 million) in the first quarter, according to a filing to the Nigerian Stock Exchange.

Credit facilities across industries ranging from oil and gas to small- and medium-sized enterprises will be reorganized, the bank said in a presentation on Tuesday.

New terms will include a six-to 12-month moratorium on principal debt repayments and an extension on loan maturities of up to two years.
Plummeting crude prices have dealt a hammer blow to the economy of Africa’s largest oil producer, just as the outbreak of Covid-19 shutters businesses and the movement of people to contain the spread of the disease.

Authorities devalued the local currency by 4 percent against the dollar in March and are under pressure to weaken the naira even further amid a shortage of dollars and lower export revenues.

Loans in the period rose 7 percent to N764.3 billion from a year earlier.
The lender plans to increase impairments to offset losses in unhedged upstream assets in the oil and gas industry, it said.

About 37 percent of the bank’s customers have foreign-currency loans and earn income in naira, so the lender will convert those into the local currency, FCMB said.

- Advertisement -
- Advertisement -

More articles


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

- Advertisement -

Latest article