• Wednesday, May 29, 2024
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BusinessDay

Five things to start your day

Five things to start your day

Banks’ non-performing loans decline to N1.2trn

Banks Non Performing Loans (NPLs) declined to 6.4 per cent as at the end of June 2020 from 9.4 per cent in the corresponding period of 2019, on account of increased recoveries, write-offs and disposals, according to figures obtained from the Central Bank of Nigeria (CBN) on Monday.

That puts the absolute amount of NPLs at N1.2 trillion as of the end of June, which works out to 6.4 per cent of the gross credit of the banks to the economy which stood at N18.9 trillion as of the period under review.

The latest statistics show that the banks have gradually reduced the bad debts in their books in recent years as the economy gradually recovered from a contraction in 2016 primarily triggered by low crude oil prices and disruptions to production.

The economy is however set to contract again in 2020 with government and the International Monetary Fund (IMF) figures predicting a recession this year on the back of the COVID-19 pandemic and low oil receipts in 2020.

Another economic recession and the slide in oil prices could put pressure on Bank NPLs yet again as companies struggle to repay bank credit due to weak economic activity.

READ  ALSO: UPDATED: Nigerian banks recover N50.32m bad loans in 9 days with CBN’s new guideline

Ahmed expects Nigeria to exit recession by Q1, 2021 with 0.5% GDP contraction

Nigeria’s finance minister, Zainab Ahmed, says she expects Nigeria to exit a shallow recession sparked by the coronavirus (COVID-19) pandemic by the first quarter (Q1) of next year if an N2.3 trillion Economic Sustainability Plan (ESP) approved by the Federal Government is strictly implemented.

“The National Bureau of Statistics (NBS) has already done an initial assessment that the economy could go into recession to as much as 4.2 per cent by 2020 but if we are fully able to deploy this N2.3 trillion, we might end up in -0.59 per cent. That is a bit fair,” Ahmed said Friday in an exclusive interview with BusinessDay in her Abuja office.

“Meaning that by the end of Q1 2020, we should have been out of the recession and back to steady growth. So, the implementation of the ESP is very important,” the minister stressed.

Central Bank of Nigeria (CBN) governor, Godwin Emefiele, has sounded similar optimism with a forecast of a -1.03 per cent contraction in GDP for the second quarter of 2020; even though many economists say a deeper recession is more likely.

The International Monetary Fund (IMF) projects Nigeria’s gross domestic product (GDP) will contract by 3.4 per cent this year.

But the Federal Government revenues have surprised to the upside, a signal that the economy is healing quickly from the ravages of the lockdowns imposed on the country’s two largest cities, Lagos and Abuja, the minister said.

READ ALSO: UN Meeting: Nigeria backs calls for a reallocation of $204b IMF reserve assets to support developing countries

E-bills payment rises by 86% to N444.16 billion

The payment of bills electronically jumped 86 per cent to N444.16 billion between January and May this year, compared with N238.81 billion recorded in the comparable period of 2019, according to latest data from the Nigerian Interbank Settlement Scheme.

The data shows the growing adoption of digital channels by Nigerians especially during the COVID-19 induced lockdown between April and May.

While the value of digital transactions rose, volumes however dipped by 30 per cent.

The volume of e-bills payments from January to May this year was 373,652 compared to 530,941 in the corresponding period in 2019.

VAT receipts up 8.45% to N651.7bn six months

A total of N651.77 billion was generated from Value Added Tax in the first half of 2020, according to the latest figures from the National Bureau of Statistics.

That’s an increase of 8.45 per cent compared to the N600.98 billion generated in the first half of 2019.

The surprise jump which came despite the negative impact of the COVID-19 pandemic on consumption shows that government revenues are performing better than was feared.

Professional services generated the highest amount of VAT with N95.92bn generated and closely followed by other manufacturing generating N67.63bn, commercial and trading generating N31.10bn, it added.

The report said mining generated the least, closely followed by textile and garment industry and pharmaceutical, soaps and toiletries with N127.58m, N499.19m and N648.78m generated respectively.

Julius Berger Nigeria posts N1.9 billion loss in six months

Julius Berger Nigeria Plc has reported a loss of N1.931 billion for the six month period ended June 30, 2020, compared with a profit of N2.835 billion in the corresponding period of 2019.

Details of the unaudited results made available at the Nigerian Stock Exchange (NSE) showed that the construction firm recorded a 22 per cent decline in revenue to N102.055 billion in 2020 from N131.783 billion in 2019. Gross profit also fell from N29.849 billion to N18.633 billion in 2020, a 38 per cent decline.

The firm was able to reduce administrative expenses to N15.748 billion in 2020, compared with N22.446 billion in 2019. However, a foreign exchange loss of N3.102 billion in 2020 led to loss after tax of N1.931 billion as against a profit after tax of N2.835 billion in 2019.

But the N1.931 billion loss in six months is an improvement on the N2.344 billion loss posted in the first quarter of the year. Market analysts said given the performance, it would be difficult to say if the shareholders would receive a dividend at the end of the year.