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By Merit Ibe
Agusto & Co. Ltd has forecasted a 16.5 per cent year-on-year loan growth in 2022 as more banks now have a better understanding of the macroeconomic headwinds notwithstanding the prevailing global supply constraints, the Russian-Ukraine crisis and insecurity challenges that continue to hamper food and crude oil production in the country.
The company noted positively the resilience shown by the Nigerian banking industry in FY 2021, as the industry’s loan portfolio grew by 21 per cent despite the weak economy and regulatory constraints.
The pan-African credit rating agency and the foremost business information provider said the 2022 edition of the annual report provides a comprehensive review of Nigeria’s banking industry and the near-term expectation for the Industry.
Traditional sectors such as oil and gas, manufacturing, general commerce and agriculture sectors are expected to drive the loan growth given the backward integration initiatives of obligors, the intervention activities of the CBN and the import-dependence nature of the Nigerian economy, the company pointed out.
“While the arbitrary cash reserve deductions and foreign exchange illiquidity would remain limitations to the growth of the Industry’s loan portfolio, we note that more banks are now favourably disposed to accessing the differentiated cash reserve requirement (DCRR) window to reduce the value of sterile restricted funds with the CBN.
“In the near term, we believe the Industry’s asset quality will remain acceptable, with the impaired loan ratio hovering around 6 percent as at 31 December 2022.
