BANK LOAN PROFILE: HOW REALISEABLE?_EHIABHI FEMI

The Nigerian Banking system is once again enmeshed with rising debt portfolio profiles that are becoming really scary if nothing is being done to make most of them realisable
Access Bank Plc has just recently announced, gleefully, that they now have the largest loan book in Nigeria’s banking industry, at over N3 trillion, following the successful conclusion of its merger with Diamond Bank.
Most of the Nigerian Banks have stories of huge Loan profiles that most times are not backed up by realisable collaterals or no collateral at all considering the fact that most of them were made to politically exposed persons.
In 2015, the CBN took up the gauntlet and informed the Licenced banks to ensure that chronic debtors and other bad loan defaulters have to work out the repayment of their debts with their banks failing which their names will be published in the media.
Even, the Assets Management Company of Nigeria (AMCON), which buys bad debts asked loan defaulters in the country to immediately square their accounts or it would publish their names in line with the CBN directive.
The CBN actually went ahead with the “Name and shame” exercise and it was discovered that “highly placed and known individuals” owning several of the company’s that had heavy loan portfolios, were fingered and discovered not to be servicing the Loans according to the terms.
Most of them had stopped servicing same because the money’s taken were diverted to personal use rather than for the purpose of the loans.
After, the normal hoolabaloo, nothing was heard about sanctions and how money’s were recovered.
We just moved on with “padded” books of accounts.
Is it not time we do a more comprehensive appraisal of these heavy loan and credit portfolio of Banks to be sure that depositors money’s are not only safe but realiseable.
That’s the way genie sees it.