Nigerian Banks face increase in credit losses as moratoriums expire

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With credit losses threaten to increase in with Nigerian banks, according to Renaissance Capital.

Nigerian lenders have larger exposure to dollar loans and big firms, with a higher capacity to survive downturns, said Adesoji Solanke, director for frontier and sub-Saharan Africa banks at Renaissance Capital in London.

Here are other comments from Solanke on the diverging asset-quality trends for banks in the two countries:

Nigerian banks typically write-off fully provisioned loans after a year on their books

In Nigeria, NPLs average 6% with 40% of loans restructured

Nigerian banks have benefited from regulatory support in being allowed to re-arrange troubled large-systemic syndicated loans multiple times, some in the manufacturing and upstream oil and gas industries“Regulatory forbearance, including pandemic-related moratoriums, have helped Nigerian banks report decent-looking numbers.

Our concern for Nigeria, as in other markets, is what happens when the moratoriums expire?

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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