News Report – July 23, 2025
At least eleven commercial banks in Nigeria have exceeded the regulatory threshold of five percent for non-performing loans (NPLs), following an industry-wide reclassification of risk assets in April 2025.
The Central Bank of Nigeria’s (CBN) guidelines stipulate that lenders must maintain NPL ratios below 5% to ensure financial system stability. However, recent reports reveal that these banks breached the limit after revising the status of several credit facilities, leading to a surge in bad debts on their books.
The development has raised concerns among financial analysts, who warn that the rising level of delinquent loans could expose the banking sector to heightened credit risk. The reclassification exercise, reportedly initiated to align with international best practices in risk management and asset quality assessment, affected several sectors including oil and gas, manufacturing, and consumer lending.
Although the identities of the affected banks were not disclosed, sources within the banking industry confirmed that the CBN is closely monitoring the situation and may issue further supervisory directives to ensure compliance and protect depositor funds.
The situation underscores the importance of prudent lending practices and robust credit risk assessment in Nigeria’s financial sector, especially in light of current economic pressures.
