Diamond Bank bad loan hits N116.1bn

According to the bank’s nine months financial statement for the period ended September 2016, the bank increase in bad loan undermined the management weak proactive and prudent measures in managing its loan portfolios.

The struggling financial institution reached a peak of 10.4 per cent in Non-Performing Loan (NPL) ratio for the period under review, becoming one of the banks that failed Central Bank of Nigeria (CBN) five per cent regulatory limit, Nationaljorunal can report.

In half year ended June 2016, the Diamond bank had reported bad loan of N93 billion while in first quarter of 2016, its bad loan stood at N60 billion.

Breaking it down by sector, Diamond Bank has 45 per cent bad loan in Oil & gas sector while 16 per cent of its bad loan was in General Commerce.

Fitch, an international ratings agency, had earlier acknowledged that banks in the country had experienced a sharp rise in non-performing loans (NPLs), adding that other key concerns in the banking industry include forex scarcity, weakening capital adequacy ratios, and the sovereign’s ability to support banks, given its weaker financial flexibility.

Having downgraded some banks, the rating agency said: “If current challenges do not ease, the banks could face further downgrades.” Likewise, Arqaam Capital, a Dubai-based investment company, had said some banks were undercapitalized and close to being insolvent, an assertion which the apex bank declared as false.