E-Financial
Investors Worry about Banks’ N814Bn Non-Performing Loans
Investors at the weekend, urged government to stimulate economic activities, particularly, in ensuring security and facilitating the movement of agricultural produce as well as the seamless export of commodities.
This according to the Guardian is because; investors are dissatisfied by the huge rise in banks’ Non-Performing Loan (NPLs) in the 2021 financial year, triggered by the prevailing economic downturn.
The investors argued that the Central Bank of Nigeria (CBN) might be reaching the limit of its monetary policy tools in stimulating the economy. This is particularly so if the fiscal complements are not immediately activated.
They expressed fear that the trend, if not controlled, could shrink banks’ bottomline in the current financial year and impact negatively on their dividend yield.
According to them, government’s inability to provide an enabling environment that will boost operations of companies under the real sector and improve their profits would ultimately shore up banks’ NPLs, and erode their profitability.
This is exacerbated by the pressure of the COVID-19 crisis on corporate cash flows for debt service, particularly, the impact of the foreign exchange (forex) rate crises, which has increased the level of corporate loan default
The CBN had, in its pursuit of domestic macroeconomic and financial stability, compelled the Deposit Money Banks to increase lending to real sector, smallholder farmers, Micro, Small and Medium Enterprises (MSMEs) consumer credit and mortgage facilities for bank customers; growing external reserves; and supporting efforts aimed at diversifying the economy through intervention programmes.
The Guardian quoted Godwin Anono, president of Standard Shareholders Association,as saying that the situation is made worse by the fact that most companies are yet to recover from the economic recession, the persistent weak domestic operating conditions, and sluggish economic growth witnessed in the past few years.
According to him, the nation’s economic rebound will require not only complementary fiscal policies, but also actions to achieve the desired objectives, particularly in improving the transportation network in the country so that goods can be moved easily from farmland to the market, which will reduce wastage and contain costs to boost the manufacturing sector.
Guardian findings revealed that the aggregate NPLs of nine banks increased to N814.08 billion in 2021, representing 3.16 per cent increase from the N789.1 billion reported in 2020.
The nine banks are Access Holdings Plc, Zenith Bank Plc, Wema Bank Plc, FCMB Group, Union Bank of Nigeria Plc, Stanbic IBTC Holdings Plc.
Others include Guaranty Trust Holding Plc, United Bank for Africa Plc, and Ecobank Nigeria. However, with the banking sector’s NPL ratio closing 2021 at 4.85 per cent, some of the nine banks remained within the five per cent NPL ratio stipulated by the Central Bank of Nigeria.
Further findings also show that while some of the banks recorded an increase in their NPLs during the period under review, a number of them recorded a significant decline in their NPLs.
The banks’ audited 2021 financial statements showed that Access Holdings, Zenith Bank and GTCO reported the top three highest NPL by value among the nine banks, while Stanbic IBTC Holdings reported the lowest.
Access Bank, in 2021 ,reported N181.5 billion NPL by value, representing an increase of 4.3 per cent from the N161.2 billion it recorded in 2020, while Zenith Bank’s hit N146.8 billion in 2021 from N125.2 billion recorded in 2020, an increase of 17.3 per cent. Wema Bank, in 2021, reported N21.3 billion, an increase of 19.3 per cent from N19.3 billion in 2020, while FCMB Group’s NPL rose to N45.93 billion, representing a 61 per cent increase from N28.57 billion it reported in 2020.
Others are Union Bank of Nigeria with N38.66bn NPL in 2021 from N29.45bn reported in 2020, as Stanbic IBTC Holdings reported a 23.4 per cent drop in its NPL to N20.3 billion in 2021 from N25.5 billion in 2020.
Anono pointed out that the state of the economy could send those loans into becoming delinquent when the borrower does not intend to make it so, noting that when the economy is challenged, the tendency of loans becoming delinquent is huge.
To boost the performance of the real sectors, Anono stated that port and land border reforms must be implemented to achieve a more efficient exportation process and to reduce smuggling activities, alongside the establishment of a special court for speedy adjudication of disputes arising from commercial transactions.
Also imperative, according to him, is significant improvement in security of lives and properties in the country, particularly on the farmlands, that have been ravaged by herdsmen crisis and ensuing violence claiming lives.
Furthermore, he stressed the need for fiscal response to include implementations of measures to improve electricity generation, transmission and distribution in Nigeria, as it is key to reducing the costs of doing business, so that locally manufactured goods would be competitive both in local and international markets.
Federal Ministry of Finance has halted enforcement of about N680 million in disputed fees imposed by the National Insurance Commission (NAICOM) on NICON Insurance Limited and Nigeria Reinsurance Corporation (Nig Re) as part of the ongoing insurance industry recapitalisation exercise.
The Ministry also directed NAICOM to suspend its demand that the two companies transfer their entire recapitalisation funds into an escrow account with the Central Bank of Nigeria (CBN), pending determination of a petition challenging the legality of the charges and the directive.
The intervention followed a July 27, 2026 petition by NICON and Nig Re over what they described as unlawful fees and regulatory demands arising from the implementation of the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
In a letter to the Commissioner for Insurance, Raymond Omachi, permanent secretary, Federal Ministry of Finance, on behalf of Taiwo Oyedele, minister of Finance and coordinating minister of the Economy, requested that NAICOM provide a detailed response and legal justification for the disputed requirements.
The Ministry specifically directed the Commission to suspend enforcement of the contested processing and verification fees, the one per cent Capital Injection Fee, and the directive requiring the companies to transfer their full recapitalisation funds to a CBN escrow account.
The dispute centres on NAICOM’s assessment of a one per cent fee on capital injected by operators, alongside additional processing and verification charges prescribed under Appendix 2 of the Commission’s Minimum Capital Requirement Guidelines.
According to the petition, the combined assessments amounted to N305 million for NICON and N375 million for Nig Re, bringing the disputed charges to N680 million.
The companies are also challenging what they described as an unconstitutional requirement to transfer more than the statutory proportion of their recapitalisation funds to the CBN.
They contend that Section 16(3) of NIIRA 2025 provides for a 10 per cent statutory deposit, and not the transfer of the entire capital injection into an escrow account.
The companies told the Ministry that they had already met the July 31, 2026 recapitalisation deadline.
NICON said it injected N420 billion, while Nig Re injected N30 billion into Mudaraba Term Deposit accounts with Lotus Bank Limited. The companies maintained that the amounts exceeded their adjusted recapitalisation requirements of N16 billion and N28 billion, respectively.
They further stated that they had deposited N42.5 billion and N43.5 billion respectively with the CBN, in compliance with the statutory deposit requirement under Section 16(3) of the new law.
The companies also disclosed that they had made initial payments of N480 million and N75 million, respectively, in fees.
The Finance Ministry’s directive effectively places the disputed charges and escrow requirement on hold while NAICOM is expected to justify the legal and regulatory basis for its actions.
The intervention could have wider implications for the insurance industry’s recapitalisation programme, particularly as operators face regulatory deadlines to strengthen their capital base under the new insurance law.
The controversy also raises questions about the extent to which regulatory guidelines can impose additional financial obligations on operators beyond those expressly provided for under the enabling legislation.
NAICOM is now expected to respond to the Ministry’s request and explain the statutory basis for the one per cent capital injection fee, the additional processing and verification charges, and the requirement for the full capital injection to be transferred into a CBN escrow account.
The Securities and Exchange Commission (SEC) has launched a nationwide awareness campaign aimed at helping investors and beneficiaries recover unclaimed dividends and inherited investments, as part of efforts to strengthen investor protection and reduce the volume of dormant assets in Nigeria’s capital market.
The initiative, unveiled in Abuja through the Probate/Unclaimed Monies Awareness and Investor Clinic, seeks to educate investors, beneficiaries and estate executors on probate procedures, estate administration and the processes involved in accessing financial assets left behind by deceased relatives.
Speaking at the event, Dr Emomotimi Agama, the Director-General of the SEC, said the Commission was addressing a long-standing challenge that had prevented many families from accessing investments belonging to deceased relatives.
Agama said many beneficiaries face difficulties obtaining probate, letters of administration, death certificates and other documents required to claim shares, dividends and other financial assets.
“For many Nigerian families, the death of a loved one who held shares, dividends or other investments marks the beginning of a long and often confusing journey,” he said.
According to him, the complexity surrounding estate administration often leaves beneficiaries unable to access legitimate investments and other financial assets inherited from deceased relatives.
He described unclaimed dividends and dormant assets as a major concern for the Nigerian capital market, noting that the funds represent money that should be benefiting families but remains idle because beneficiaries are unable to access them.
“Across our market, unclaimed dividends and dormant assets represent real money—money that belongs to real families, sitting idle, disconnected from the people it was meant to serve,” Agama said.
The SEC DG said the Commission was committed to bridging the gap through policy reforms, investor education and sustained engagement with investors, beneficiaries and other stakeholders in the capital market.
He stressed the importance of ensuring that investors and their families were adequately informed about the procedures for documenting, preserving and transferring financial assets to beneficiaries.
Agama said the awareness campaign would also provide an avenue for members of the public to better understand probate processes and the requirements for recovering unclaimed monies and inherited investments.
Also speaking, the Acting Chief Executive Officer of Meristem Registrars and Probate Services Limited, Ms Nkechinyelu Okoye, identified poor awareness and inadequate estate planning as major factors contributing to the accumulation of unclaimed financial assets.
Okoye said some beneficiaries were unaware that financial assets such as shares and dividends formed part of a deceased person’s estate, while others did not know that their deceased relatives had investments in the capital market.
She added that some beneficiaries were also unfamiliar with the documentation and legal procedures required to establish their entitlement and successfully claim the assets.
According to her, these challenges often result in financial assets remaining unclaimed for extended periods, even when legitimate beneficiaries are available.
The initiative is expected to improve public awareness of probate and estate administration procedures while helping more families identify and recover investments and other financial assets belonging to them.
It is also part of broader efforts to reduce the volume of unclaimed dividends and dormant assets in the capital market and ensure that funds belonging to investors and their beneficiaries are returned to their rightful owners.
Debt Management Office (DMO) said the federal government spent N3.14 trillion on servicing its domestic debt in the first quarter of 2026.
The office disclosed the data in its latest domestic debt service report for Q1 2026.
The figure comprises N2.97 trillion in interest payments and N169.68 billion in principal repayments.
The agency said in January, the government spent N741.82 billion on domestic debt service, while the figure rose to N967.67 billion in February.
Debt service increased further to N1.43 trillion in March, bringing the total for the quarter to N3.14 trillion.
The March figure was 47.7 percent higher than the N967.67 billion recorded in February and 92.7 percent above the N741.82 billion spent in January.
Also, the debt office said interest payments accounted for about 94.6 percent of total domestic debt service during the quarter.
The DMO said treasury bills accounted for the largest share of interest payments at N1 trillion, while interest on federal government bonds stood at N1.96 trillion.
The agency said the government also paid N4.24 billion in interest on FGN savings bonds during the period.
The DMO said the principal component of the debt service comprised N169.68 billion in repayments on local-denominated promissory notes.
Overall, the government’s domestic debt service rose sharply through the quarter, with March accounting for almost half of the N3.14 trillion spent between January and March.
Nigeria’s public debt increased by 0.01 percent to N159.35 trillion in the Q1 of 2026.
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