Nigerian banks boost loan books by N689.5 billion in Q1 2021 as UBA, Stanbic lead

Between January and March 2021, Nigerian banks listed on the Nigerian Exchange Group Limited (NGX Plc) floor paid out an additional N689.5 billion in loans to their customers, as the Central Bank of Nigeria increases its efforts to increase customer access to credit to encourage economic growth.

Nigerian banks’ loan expansion is in line with the CBN’s expansionary policies and growth plan, which are aimed at reviving the economy, particularly in the aftermath of the COVID-19 pandemic and its effects on the Nigerian economy.

• According to data compiled by our source; Nairametrics, the gross loans and advances by Nigerian Deposit Money Banks rose from N17.06 trillion as of December 2020 to N17.75 trillion by the end of the first quarter of 2021.
• This represents an additional loan of N689.53 billion issued to consumers during the period. It is however 33.3% lower than the N1.03 trillion recorded in the corresponding period of 2020.
• The banks also recorded a 10.4% decline in interest income during the period, which could be attributed to the stance of the apex bank in loosening the interest rate benchmark to increase credit access to the economy.
• Recall that the CBN had reduced the MPR from about 14% earlier in 2020 to 11.5%, which is still retained in the just concluded MPC meeting.
• Meanwhile, it is worth noting that a decline in aggregate loans could indicate a collection of previous loans rather than none issuance of new loans

It’s worth noting that first-tier banks (FUGAZ) were up against strong competition from market rivals including Stanbic, Fidelity, and FCMB, which is one of the reasons why only two tier-1 banks made the top five (5).

Below are the top borrowers:

UBA – N178.1 billion

In the first three months of 2021, the pan-African bank topped the list, offering an additional sum of N178.08 billion to its customers. According to the company’s most recent financial statement, gross loans totaled N2.73 trillion at the end of Q1 2021, up from N2.55 trillion in December 2020, a 7 percent raise over the previous quarter.

• Its loan disbursement in Q1 2021, was however lower than the N195.3 billion that was issued in the corresponding period of 2020.
• This resulted in a marginal decline in interest income, dropping from N109.1 billion recorded in Q1 2020 to N108.6 billion in the comparable period of 2021

Stanbic IBTC – N104.9 billion

The second-highest gross loans were offered by Stanbic IBTC  and advance to customers during the period under review. A total additional sum of N105 billion in the 3 months period ended in March 2021 was being lent.

• The bank’s gross loan to customers increased from N625.14billion recorded as of December 2020 to N730.14 billion at the end of March 2021.
• Its disbursed loan represents a 27.7% increase compared to N82.2 billion recorded in the corresponding period of 2020.
• However, interest income dropped by 23.5% from N27.46 billion recorded in Q1 2020 to N21.01 billion in Q1 2021.

Fidelity Bank – N100.1 billion

The third on the list of highest borrowers went to Fidelity Bank Plc after it lent an additional sum of N100.15 billion in the first 3 months of 2021 to its customers.

• The bank’s aggregate loan book rose from N1.33 trillion as of December 2020 to N1.43 trillion by the end of the first quarter of 2021.
• Its Q1 2021 loans represent a staggering 157.8% increase compared to N38.85 billion recorded in the corresponding period of 2020.
• However, its interest income declined by 7.4% from N42.3 billion recorded in Q1 2020 to N39.15 billion in Q1 2021.

FBN Holdings – N82.31 billion

FBN Holdings Plc increased its loan offering to customers within the period under review by about N82.31 billion.