The bank’s Director, Banking Supervision Department, , Mrs. Tokunbo Martins at the end of the Bankers Committee meeting in Lagos said that the banks were properly positioned to carry out their core function which is financial intermediation and support for broad sectors of the economy, particularly the real sector. Commenting on the Non Performing Loans (NPL), which has increased to 5 per cent, Martin said “one reason why we have always wanted the banks to have a very high capital ratio is for a time like this.
So the banks have adequate capital to withstand the shock that we are experiencing today”.
According to her, even beyond withstanding the shock it is also important that the banks continue to support the real sector, “adding that even though what is happening in the economy now banks are not to be blamed, what is happening now an in view of risks involved banks need to be prudent and proactive.” She said that banks have followed the apex bank’s directive and that they do not distribute as much as they have distributed before.
“The instruction was retain more and that was exactly what they have done. So when you put all that together you would understand why they can withstand shocks and at the same time they can still continue lending”, she said.
The Director said the economic downturn has made things a bit hard at the moment even as we are also talking about falling oil prices.
She further pointed out that at this moment if corporate organisations were not doing as well as they used to do and therefore are unable to pay their loans. It is not something unusual and 5 per cent of reported NPL is not really out of this world, but then on the other hand it is not that we are resting on our oars.
