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

Nigerian Banks listed on the floor of the Nigerian Exchange Group Limited (NGX Plc) gave out additional N689.5 billion loans to their customers between January and March 2021, as the Central Bank of Nigeria intensifies its move in increasing access to credit by customers, so as to stimulate economic growth.

The expansion of credit by Nigerian banks is in tandem with CBN’s expansionary policies and growth plan, aimed at resuscitating the economy, especially after the COVID-19 pandemic and its impact on the Nigerian economy.

• According to data compiled by Nairametrics Research, 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 interest rate benchmark so as 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 it still retained in the just concluded MPC meeting.
• Meanwhile, it is worth noting that a decline in aggregate loans could indicate collection of previous loans rather than none issuance of new loans

Nairametrics analysed the loans and advances issued out by Nigerian banks in Q1 2021, vis-a-viz their interest income for the period.

It is pertinent to note that first-tier banks (FUGAZ) faced stiff competition from other market rivals like Stanbic, Fidelity, and FCMB, a major reason why only two of the tier-1 banks made it to the top five (5).

Below are the top borrowers:

UBA – N178.1 billion

The pan-African bank led the list, offering an additional sum of N178.08 billion to its customers in the first three months of 2021. According to its last reported financial statement, its gross loans stood at N2.73 trillion at the end of Q1 2021, compared to the s.um of N2.55 trillion recorded in December 2020, representing an increase of 7% during the period.

• Its loan disbursement in Q1 2021, was however lower than 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

Stanbic IBTC offered the second-highest gross loans and advances to customers during the period under review. It lent an additional sum of N105 billion in the 3 months period ended in March 2021.

• 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

Fidelity Bank Plc ranked third on the list of highest lenders 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 when 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.

By the end of the first quarter in 2021, First Bank’s gross loans stood at N2.3 trillion as against N2.22 trillion recorded at the end of 2020.

In contrast to the previous year, FBN’s lending to customers dropped by 58.6% compared to N198.9 billion in Q1 2020. Its interest income also declined by 25.3% to stand at N78.36 billion in Q1 2021.

FCMB also made the list of banks that offered the highest amount of loans to customers. Within the period under review, it lent an additional N63.3 billion, while its total customers’ loans stood at N886.09 billion as of March 2021.

Its loan offering in Q1 2021, indicates a 30.9% increase compared to N48.38 billion offered as loans in the comparable period of 2020.

This however could not translate into an increase in interest income as it posted N33.03 billion as interest income during the period, 13.8% lower than N38.33 billion recorded in Q1 2020.