Bank NPLs (13) - Impact on Growth of the Credit Market

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Thursday, May 28, 2020 / 06:25 AM / by Debtors Africa/ Header Image Credit:  EcoGraphics

 

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H.1 Access Bank

Chart 160:  Access Bank Growth in Loans (%) vs NPL Ratio (%)

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Source: NSE, Access Bank, Proshare Research

 

Access Banks loans grew by +46.05% in Q4 2019 from -0.12% in Q4 2018, as its NPL rose from +5.8% in Q4 2019 from +2.5% in Q4 2018.

 

Access Bank's NPL does not clearly explain its growth in loans over the years. The expectations are that a reduction in NPL will lead to an increase in the growth in loans.

 

There were periods were growth in loans responded to changes in NPL and there were other periods growth in loans did not respond to changes in NPL.

 

In Q4 2012, there was a reduction in NPL from+9.3% to +5.3% contrary to expectations there was a fall in growth rate of loans to +5.62% in Q4 2012 from +34.07% in Q4 2011.

 

Access bank's NPL rose to +9.3% in Q4 2011 from +8% in Q4 2010, contrary to expectations there was an increase in the growth rate of loans from +11.54% in Q4 2010 to +34.07% in Q4 2011 (see Chart 160).


H.2 UBA

Chart 161:  UBA Growth in Loans (%) vs NPL Ratio (%)

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Source: NSE, UBA, Proshare Research

 

UBA's loans grew by +20.16% in Q4 2019 from +3.9% in Q4 2018, as its NPL fell to +5.3% in Q4 2019 from +6.45% in Q4 2018.

 

UBA's NPL does not clearly explain the growth rate in loans during the period under review. Although it recorded years where there was a fall in NPL while the growth in loans increased. In Q4 2012, its NPL fell to +1.9% from +3.7% in Q4 2011, contrary to expectations, there was fall in the growth rate of loans from +9.67% in Q4 2011 to -4.45% in Q 4 2012.

 

In Q4 2016, UBA NPL increased to +3.9% from +1.7% in Q4 2015. Contrary to expectations, growth in loans increased from -3.29% in Q4 2015 to +45.21% in Q4 2016 (see Chart 161).

 

H.3 Zenith Bank

Chart 162:  Zenith Bank Growth in Loans (%) vs NPL Ratio (%)

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Source: NSE, Zenith Bank, Proshare Research

 

Zenith Bank's loans grew to +26.46% in Q4 2019 from -13.2% in Q4 2018, as its NPL reduced to +4.3% in Q4 2019 from +4.98% in Q4 2018.

 

Zenith Bank's growth in loans responded to changes in NPL from 2010 to 2015. In Q4 2015, its NPL fell to +1.63% from +1.8% in Q4 2014. Contrary to expectations, its PBT fell to N15.02bn in Q4 2015 from N38.21bn in Q4 2014.

 

In Q4, 2016, it recorded a growth in its NPL to +3% from +1.63% in Q4 2015. Contrary to expectations, there was also a rise in growth rate of loans from +15.02% in Q4 2015 to +15.08% in Q4 2016 (see chart 162).

 

H.4 ETI

Chart 163:  ETI Growth in Loans (%) vs NPL Ratio (%)

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Source: NSE, ETI, Proshare Research

 

ETI loans grew by +1.32% in Q4 2019 from +16.61% in Q4 2018, as its NPL rose to +9.9% from 9.8% in Q4 2018.

 

ETI growth in loans responded to changes in NPL in all the periods under review except in Q4 2016. In Q4 2016, it recorded an increase in its NPL to +9.6% from+8.2% in Q4 2015, contrary to expectations there was an increase in growth rate of loans from -2.36% in Q4 2015 to +26.52% in Q4 2016 (see chart 163).

 

H.5 Wema Bank

Chart 164:   Wema Bank Growth in Loans (%) vs NPL Ratio (%)

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Source: NSE, Wema Bank, Proshare Research

 

Wema Bank's loans grew by +14.69% in Q4 2019 from a previous growth of +16.84% in Q4 2018 while its NPL increased to +7.38% in Q4 2019 from +4.98% in Q4 2018.

 

Wema Bank's NPL does not clearly explain the growth rate in loans during the period under review. In some years, the growth rate in loans responded to changes in NPL, while in some other periods it didn't.

 

In Q4 2017, NPL fell to +3.52% from +5.07% in Q4 2016, contrary to expectations there was a fall in the growth rate of loans to -4.92% in Q4 2017 from +22.31% in Q4 2015.

 

In Q4 2011 its NPL rose to +52.97% from +50% in Q4 2010, contrary to expectations there was a rise in growth rate in loans to +57.12% in Q4 2011 from +42.64% in Q4 2010 (see Chart 164).

 

H.6. UBN

Chart 165:   UBN Growth in Loans (%) vs NPL Ratio (%)

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Source: NSE, UBN, Proshare Research

 

UBN's loans grew remarkable by +20% in Q4 2019, as its NPL reduced to +5.80% in Q4 2019 from +8.7% in Q4 2018.

 

UBN's NPL does not clearly explain the growth rate in loans during the period under review. In some years, the growth rate in loans responded to changes in NPL, while in some other periods it didn't.

 

In Q4 2012, UBN's NPL rose to +6.7% from +5.1% in Q4 2011, contrary to expectations there was a rise in growth rate in loans to +4.02% in Q4 2012 from -21.65% in Q4 2011.


On the other hand, UBN's NPL fell to +8.7% in Q4 2018 from +19.8% in Q4 2017, contrary to expectations there was also a fall in growth rate in loans to -8.44% in Q4 2018 from +1.95% in Q4 2017 (see chart 165).

 

H.7 FCMB

Chart 166:  FCMB Growth in Loans (%) vs NPL Ratio (%)

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Source: NSE, FCMB, Proshare Research


FCMB's loan grew significantly to +13.09% in Q4 2019 from -2.58% in Q4 2018, as its NPL fell to +3.7% in Q4 2019 from +5.9% in Q4 2018.

 

FCMB's NPL does not have a strong impact on growth rate in loans during the period under review. In some years, the growth rate in loans responded to changes in NPL, while in some other periods it didn't.

 

In Q4 2011, NPL fell to +2.8% from +5.5% in Q4 2010, contrary to expectations there was a fall in growth rate of loans to -2.28% in Q4 2011 from +36.93% in Q4 2010.


In Q4 2013, its NPL rose to +3.9% from +2.5% in Q4 2012. Instead of a fall in the growth rate of loans, there was a rise in loans growth rate from +12.01% in Q4 2012 to +25.92% in Q4 2013 (see Chart 166).

 

H.8. Sterling Bank

Chart 167:   Sterling Bank Growth in Loans (%) vs NPL Ratio (%)

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Source: NSE, Sterling Bank, Proshare Research


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Despite the significant reduction in its NPL from +8.7% in Q4 2018 to +2.2% in Q4 2019, Sterling Bank's loans grew is at a negative rate of -0.4% in Q4 2019 from +3.84% in Q4 2018.

 

Sterling Bank's NPL does not clearly explain the growth in loans during the period under review. In some years, the growth in loans responded to changes in NPL while in some other periods it failed to.

 

In Q4 2012, there was a fall in Sterling Bank's NPL to +3.8% from +4.8% in Q4 2011, contrary to expectations the growth in its loans reduced from +58.72% in Q4 2011 to +43.63% in Q4 2012.

 

In Q4 2016, the bank's NPL rose to +9.9% from +4.8% in Q4 2015. Contrary to expectations, there was a rise in growth in loans to +38.24% in Q4 2016 from -8.76% in Q4 2015 (see Chart 167).

 

H.9 Fidelity Bank

Chart 168:   Fidelity Bank Growth in Loans (%) vs NPL Ratio (N'bn)

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Source: NSE, Fidelity Bank, Proshare Research

 

Fidelity Bank's NPL grew significantly to +32.6% in Q4 2019 from +10.56% in Q 2018, as its NPL reduced to +3.3% in Q4 2019 from +5.7% in Q4 2018.

 

Fidelity Bank's NPL does not clearly explain the growth in loans during the period under review. In some years, the growth in loans responded to changes in NPL, while in some other periods it didn't.

 

In Q4 2011, its NPL rose to +4.4% from +3.7% in Q4 2013, contrary to expectations there was a rise in the growth rate of loans from +23.32% in Q4 2013 to +27.13% in Q4 2014. In Q4 2013, NPL fell to +3.7% from +3.9% contrary to expectations, there was a fall in the growth rate of loans from +34.49% in Q4 2012 to +23.32% in Q4 2013 (see Chart 168).

 

H.10 GT Bank

Chart 169:   GT Bank Growth in Loans (%) vs NPL Ratio (%)

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Source: NSE, GT Bank, Proshare Research

 

GT Bank's loans grew significantly by +19.19% in Q4 2019 from -13.08% in Q4 2018, as its NPL reduced to +6.5% in Q4 2019 from -13.08% in Q4 2018.

 

GT Bank's NPL does not clearly explain the growth rate in loans during the period under review. In some years, the growth rate in loans responded to changes in NPL, while in some other periods it didn't.

 

In Q4 2012, GT Bank NPL fell to +3.43% from +3.73% in Q4 2011. Contrary to expectations there was a fall in the growth rate of loans from +19.11% in Q4 2011 to +10.21% in Q4 2012. It's NPL rose to +3.66% in Q4 2016 from +3.21% in Q4 2015, despite the rise in its NPL, there was a rise in the growth rate of its loans to +15.84% (see Chart 169).

 

H.11. Stanbic IBTC Bank

Chart 170:   Stanbic IBTC Bank Growth in Loans (%) vs NPL Ratio (%)

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Source: NSE, Stanbic IBTC Bank, Proshare Research

 

Stanbic IBTC Bank loans grew by +22.97% in Q4 2019 from +16.29% in Q4 2018, as its NPL remained constant.

 

Stanbic IBTC Bank NPL does not clearly explain the growth rate in loans during the period under review. In some years, the growth rate in loans responded to changes in NPL, while in some other periods it didn't.

 

In Q4 2012, there was a fall in Stanbic IBTC NPL to +5.1% in Q4 2012 from +6.7% in Q4 2011, contrary to expectations there was a fall in growth of loans from +40.72% in Q4 2011 to +15.45% in Q4 2012.

 

Despite the rise in its NPL from +4.4% in Q4 2013 to +4.8% in Q4 2014, there was an increase in its growth rate of loans from +8.79% in Q4 2013 to +37.57% in Q4 2014 (see Chart 170).

 

H.12. FBNH

Chart 171:  FBNH Growth in Loans (%) vs NPL Ratio (%)

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Source: NSE, FBNH, Proshare Research

 

FBNH loans grew positively by +10% in Q4 2019 from a negative growth rate of -15.86% in Q4 2018, as its NPL reduced significantly from +24.7% in Q4 2018 to +9.9% in Q4 2019.

 

FBNH's growth in loans responded to changes in NPL between 2010 and 2014, while in some other periods it didn't. In Q4 2017, FBNH recorded a decline in its NPL to +22.8% from +24.4% in Q4 2016, contrary to expectations, there was a fall in the growth rate of loans to -3.97% in Q4 2017 from +14.67% in Q4 2016.

 

Also, in Q4 2016 its NPL rose to +24.4% from +18.1% in Q4 2015. Despite the rise in its NPL, it recorded a rise in the growth rate of loans to +14.67% in Q4 2016 from -16.6% in Q4 2015 (see Chart 171).


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Related Reports (PDF)

1.      Download the Full PDF Report - Debtors Africa, May 13, 2020

2.     Executive Summary PDF - Proshare, May 14, 2020

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