The total non-performing loans in Nigeria’s banking sector has dropped from 1.11 trillion naira in December 2010 to 692 billion naira in August 2011, according to the Central Bank of Nigeria (CBN).
The drop has been attributed to the intervention of the newly-created Asset Management Corporation of Nigeria (AMCON),
“The improvement being recorded in corporate governance and risk management, as well as the impact of AMCON, have manifested in the significant reduction in the ratio of NPLs to total credit in the banking sector,” the local media Tuesday quoted CBN Deputy Governor Kingsley Moghalu as saying.
He said the decline in the total NPLs within the nine-month period represents 37.66 per cent of the total.
The CBN official further disclosed that the average industry NPLs as a percentage of total credit currently stood at 9.37 per cent, adding that the figure was below the maximum prudential threshold of 12.5 per cent.
Moghalu said the new banking model introduced by the CBN would take effect in May 2012.
“The key objective is to bring about a banking system where banks are involved in core banking activities devoid of the unbridled risky behaviour that greatly contributed to the recent banking crisis,” he explained