Oil Firms Loan Default To Banks Hit N7 Trillion – CBN Reveals (www.naijanews.com)

Oil Firms Loan Default To Banks Hit N7 Trillion – CBN Reveals


The total NPLs for the bank stood at N177.3bn for the 2022 financial year.

The data further revealed that Ecobank Nigeria recorded 179.7m as NPLs in 2022, with the oil and gas sector accounting for 35 per cent of the total, equating to 62.8m.

A review of Fidelity Banks halfyear financial statements shows that the oil and gas sector accounted for N4.82bn of the banks total NPLs or 8.9 per cent of its total NPL.

For WEMA Bank, the oil and gas industry accounted for N5.11bn of the total NPLs for a halfyear period.

The Centre for the Promotion of Private Enterprise recently said that the incessant scarcity of Premium Motor Spirit, popularly called petrol, vandalism of pipelines, oil theft and several other menaces in the oil and gas sector were due to the gross mismanagement of the industry by the Federal Government and politicians,

CPPE described the oil sector management by politicians as a disaster, stressing that the government should reduce its hold on the industry and privatise some facilities in it, such as the four refineries being run by the Nigerian National Petroleum Company Limited.

Lets take the oil and gas sector, for instance that sector has been a disaster because it is fully in the hands of government officials and politicians, The PUNCH quoted the Director, CPPE, Muda Yusuf, as saying.

Yusuf, who reportedly spoke on the need to privatise the oil sector fully, said, Imagine if operators in that industry were private sector people, paying taxes and doing things efficiently, the sector would not be in the state it is now.

It would have raked in a lot of investments, bringing in many foreign and domestic investors, more quality jobs would have been created, and our export earnings would have been fantastic.

The combined loan owed to banks by oil firms as of December 2022 totalled N6.62 trillion, the Central Bank of Nigeria (CBN) revealed. window.arieswindow.arieswindow.aries.v1window.aries.v1commandsconst arieswindow.aries.v1aries.commands.push(()>const zoneId’7707’const anchordocument.getElementById(‘vidvertob204be9dfd5910169c41dac39bd7857d’)anchor.removeAttribute(‘id’)aries.mount(zoneId,anchor,width720,height405,)))()>

Naija News learnt that the downstream and upstream subsectors of the Nigerian oil and gas industry are faced with some challenges, hence the colossal indebtedness.

Data released by the apex bank showed that while operators in the downstream, natural gas and crude oil refining subsector owed banks N4.71tn, operators in the upstream and services subsectors were indebted to banks to the tune of N1.91tn.

It also showed that the total debt rose by 110.83 per cent from N3.14tn in 2016 to N6.62tn in 2022.While the debt has increased significantly over the years, it is observed that the oil and gas sector is struggling to service its debt and defaulting on loans.

The development, Naija News understands, has raised banks exposure to nonperforming loans in 2022, according to an analysis of the financial statements of Guaranty Trust Bank, United Bank for Africa, Zenith Bank, Ecobank Nigeria, Fidelity, and WEMA Bank.

An NPL occurs when the borrower fails to make scheduled payments for a specified period.The 2022 financial statements of the Guaranty Trust Bank showed that N21.6bn was recorded as NPLs from firms in the oil and gas sector (midstream and downstream).

GTBs NPLs stood at 5.19 per cent of total loans disbursed.

With a total sum of N1.92tn loaned in 2022, N102.3bn was recorded as NPL, with the oil and gas sector taking 21.21 per cent of the total.

While UBA did not state the value of its NPLs for 2022, it noted that the oil and gas sector held 16 per cent of the total unpaid loans for the year.

For Zenith Bank, the oil and gas sector had a share of 44.3 per cent of the NPLs, representing N78.66bn.


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