2026-01-02 06:00:00
Figures cited by Punch show Nigeria’s banking sector recorded a rise in non‑performing loans (NPLs) in 2025 after the CBN ended key regulatory forbearance measures introduced during the COVID‑19 period.
The CBN’s macroeconomic outlook puts the NPL ratio at an estimated 7%, above the 5% prudential limit, raising concerns about asset quality and how quickly lenders can rebalance risk without choking credit.
Analysts say the shift forces more realistic loss recognition and provisioning, but also increases pressure on earnings and capital—especially for lenders with heavy exposures in vulnerable sectors.
BusinessDay reports NPLs rose to “an estimated seven percent,” breaching the prudential threshold, following the withdrawal of forbearance. The CBN’s published outlook states the “Non‑performing Loans (NPLs) ratio stood at an estimated 7.00 per cent” relative to the 5% limit.
Echotitbits take: This is where recapitalisation and risk management collide. If banks tighten too aggressively, SMEs and consumer credit will feel it; if they don’t, provisioning will eat profits. Watch quarterly disclosures for sector-by-sector stress, and whether the CBN introduces targeted transitional guidance.
Source: The Punch — January 2, 2026 (https://punchng.com/banks-bad-loans-spike-after-cbn-withdraws-forbearance/)
The Punch 2026-01-02
Photo Credit: The Punch
