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?