Bad loans to real estate up by 66.5% in 2020
The total Non-Performing Loans (NPL) recorded by banks for the real estate and construction sectors increased by 66.57percent, as the NPL rose to N226.62 billion in 2020 from N136.05 billion in the same period in 2019.
This was disclosed by the National Bureau of Statistics (NBS) in its Selected Banking Sector Data: Sectorial Breakdown of Credit, ePayment Channels and Staff Strength report.
Loans in the real estate sector rose by 12.87percent to N56.03 billion at the end of 2020 from N49.65 billion in December 2019.
NPLs in the construction sector surged by 97.44percent to N170.59 billion in December last year from N86.4 billion in 2019.
The construction sector contracted by -7.68percent last year, compared to a growth of 1.81percent in 2019 and 2.33percent in 2018.
Experts blamed the development on the challenges facing the real estate sector, especially with the COVID-19 pandemic, as they tasked the Federal Government to pay adequate attention to the sector.
Guess what Nigerian banks charge you for borrowing
Nigerian banks are charging an average interest rate of between 4 percent and 36 percent on loans given to customers in various sectors of the economy, especially agriculture and forestry, manufacturing and education.
This represents -7.5 percentage point lower and 24.50 basis point higher than 11.50 percent Monetary Policy Rate (MPR).
Applicable rates for each of the DMBs as of April 9, 2021, showed that Stanbic IBTC Bank charged the lowest rate on loans at 4 percent, followed by GTBank, Polaris Bank, and Unity Bank at 5 percent each, Fidelity Bank 6 percent, Rand Merchant Bank 6.08 percent, FBN Merchant Bank and UBA 7 percent each, Coronation Merchant Bank 8 percent, and Wema Bank 9 percent, among others.
The banks that charge higher in the prime lending category include Heritage Bank 27 percent, Wema Bank 25 percent , Ecobank 23 percent, First Bank of Nigeria 22 percent, Keystone Bank 21 percent, and UBA 20 percent.
In the maximum lending category, banks charge between 9.00 percent and 36 percent. For instance, Suntrust Bank charges as low as 9.00 percent, followed by Globus Bank 14 percent and Coronation 17 percent.
Fidelity Bank and Union Bank charge as high as 36 percent per annum, followed by Heritage Bank 35 percent, Keystone Bank 34 percent, and Sterling Bank 33 percent, among others.
Investors Stake N16bn on 1.4 Billion Shares
The Nigerian equities market attracted investment inflow of N15.918 billion last week staked on 1.419 billion shares in 18,459 deals.
This indicated an increase by 46.3 per cent from the N10.883 billion invested in 1.441 billion shares in 19,614 deals the previous week.
However, the Nigerian Stock Exchange Limited (NGX) All-Share Index (ASI) depreciated by 1.6 per cent to close at 39,198.75, while market capitalisation declined to N20.431 trillion. Market analysts attributed the depreciation to profit taking in bellwether stocks following some gains recorded in the month April.
Some of the stocks that suffered profit taking included Stanbic IBTC Holdings Plc, MTN Nigeria Plc and Dangote Cement Plc.
Analysts at Cordros Securities said the bears would likely remain in control of the market in the new month.
An analysis of the performance showed that the Financial Services Industry led the activity chart with 1.069 billion shares valued at N9.531billion traded in 10,907deals; thus contributing 75.34 per cent and 59.88 per cent to the total equity turnover volume and value respectively.
The Industrial Goods Industry followed with 60.762million shares worth N2.005billion in 1,070deals. The third place was Consumer Goods Industry, with a turnover of 57.023 million shares worth N1.029billion in 2,831deals.
Trading in the top three equities namely Access Bank Plc, FBN Holdings Plc and Zenith Bank Plc accounted for 609.988 million shares worth N6.593billion in 4,870deals.
60 agencies failed to remit N3trn revenue in six years- Senate Committee
Senate Committee on Finance has revealed that 60 government-owned enterprises failed to remit a total of N3trillion in six years, contrary to provisions of the constitution and Fiscal Responsibility Act.
Chairman of the committee, Solomon Adeola, who revealed the development to journalists, yesterday, stated that the breach was uncovered during the panel’s ongoing investigation of remittances by Ministries, Departments and Agencies (MDAs).
The failure of key revenue-generating agencies to pay what they generated into the Consolidated Revenue Fund (CRF) has been a source of financial bankruptcy of the Federal Government and a cause of huge borrowing, particularly from 2015 to date.
Nigeria’s record low-interest rates end as bond yields rise by most in 12yrs
The rapid rise in the yields of Nigerian debt signals an end to the record low interest rate environment that characterised the year 2020.
The benchmark 10-year Nigerian government bond yielded 13.3 percent as of Friday, May 7, according to data from trading platform, FMDQ. That is more than three times the 4 percent return on the same bond only six months ago in October 2020, and marks the fastest uptick in government bond yields since at least 2009.
The yields on one-year Treasury bills, which are short-term debt, have also gone up from a record low of 0.5 percent some six months ago to nearly 10 percent.
Analysts say the rapid rise in yields is a signal that Nigeria’s low interest rate policy is being phased out as monetary authorities look to make Nigerian debt assets attractive for domestic and foreign investors amid rising inflation.