01 February 2017, Sweetcrude, Abuja — Nigerian banks total credit to power and energy firms dropped to N726.287 billion at the end of 2016, according to latest data released by the National Bureau of Statistics, NBS.
The NBS, in its selected banking sector data for the fourth quarter of 2016, disclosed that the banks’ credit to the power and energy sector in the fourth quarter of 2016 represented a decline of 0.48 per cent from N729.813 billion recorded in the third quarter of 2016.
In its further analysis of the sectoral allocation of banking sector credit, the NBS stated that in the second and first quarter of 2016, exposure to power and energy firms stood at N685.225 billion and N527.56 billion respectively.
Giving a breakdown of the figures, the NBS stated that credit to Independent Power Plants and Power Generation plants stood at N432.3 billion in the fourth quarter; while N293.993 billion was extended to power transmission and distribution firms.
In general, the NBS report stated that total credit to the private sector in the fourth quarter of 2016 stood at N15.75 trillion, dropping from N15.788 trillion recorded in the third quarter of 2016.
In the second quarter of 2016, total private sector credit stood at N15.144 trillion, rising from N12.88 trillion recorded in the first quarter of 2016.
On the other hand, banking sector credit allocation to the government in the fourth quarter of 2016, according to the NBS stood at N1.362 trillion, dropping slightly from N1.367 trillion recorded in the third quarter of 2016.
In the first quarter of 2016, banking sector total credit to government stood at N1.23 trillion, rising slightly to N1.385 trillion in the second quarter.
However, it stated that “In terms of credit to private sector, a total of N59.56 trillion worth of credit was allocated by banks in 2016.
“Services and Industry got credit allocation of N23.07 trillion and N22.85 trillion to record the highest credit allocation in the year under review.”
It also added that as at the fourth quarter of 2016, the total number of banks’ staffs dropped from 82,540 in the third quarter of 2016, to 76,812 in the fourth quarter 2016.
The Central Bank of Nigeria (CBN) had late last year expressed concerns over banks’ exposure to the energy sector, stating that the huge exposure was capable of triggering systemic risks in the financial sector.
Specifically, CBN, in its latest Financial Stability Report, stated that the huge exposure of banks to the sector, coupled with the low price of crude oil in the international market continued to generate concerns especially regarding the capacity of the obligors to meet their obligations.
According to the CBN, at end-June 2016, loans to the oil and gas sector constituted 28.77 per cent of the gross loan portfolio of the banking system as a credit to the sector grew to N4.5 trillion, compared to N3.31 trillion at end-December 2015.
This, the CBN explained, was in comparison to the manufacturing sector, which accounted for 12.95 per cent of the total credit, compared to 13.91 per cent in the second half of 2015, while agriculture, forestry and fishery accounted for 3.08 per cent of the total, indicating a 0.69 percentage point decline compared to 3.77 per cent in the preceding half year.