The pains of many Nigerian banks know no bounds. The ongoing economic recession has taken a huge toll on thier non-performing loans ratio, which has risen from N1.678 billion in June to N2.084 trillion in December 2016. According to the current Central Bank of Nigeria, CBN’s Financial System Stability Report, based on asset quality, capital and income-expense, the report stated, the ratios of non-performing loans to gross loans increased from 11.7 per cent in June to 14 per cent in December 2016.
“Commercial banks in the country experienced deterioration in assets quality at end-December 2016. The deterioration in asset quality was largely attributed to the rising inflationary trend, negative GDP growth, and the depreciation of the naira. The  ratio  of  regulatory  capital  to  risk  weighted  assets  decreased  by  0.8 percentage points  to 13.9 per cent at end-December 2016, compared to 14.7 per cent at end-June 2016,” said the report.
Similarly, it noted that, “the ratio of Tier-1 capital to risk weighted assets declined by 0.9 percentage points to 12.9 per cent at end-December 2016 from 13.8 per cent at end-June 2016.  Despite the marginal decrease, the ratios remained above the Basel minimum threshold.”
The report also noted that, “The return on assets declined by 1.0 percentage points to 1.3 per cent at end-December 2016 from 2.3 per cent recorded at end-June 2016, while the ratio of non-interest expenses to gross income increased to 63.8 per cent at end-December 2016 from 54.6 per cent recorded in the preceding half of the year.”
The report also highlighted N21.27 billion excess charges
illegally deducted from the accounts of customer of banks, recovered by CBN in 2016. The amount was recovered following complaints received from 2,656 bank customers. The CBN explained that apart from the N21.27 billion, $3.35 million and €19,263.62 were recovered and refunded to customers.