While answering questions at the end of yesterday’s Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria, Governor Godwin Emefiele explained why Nigerian banks were encouraged to restructure as much as 41% of their loans to customers.
“If the CBN did not ask the banks to grant these forbearances to their customers, the loans will go bad immediately by our prudential ratios,” Emefiele stated.
Just a few months ago, the apex bank had granted a temporary suspension on loan interests and repayment on principal debts, in a calculated effort to mitigate the negative impacts of the pandemic. Nairametrics understands that N7.8 trillion worth of loans, out of a total of N19.9 trillion, have so far been restructured for 35,640 customers of 22 banks.
As Emefiele explained, these moves became absolutely necessary amid the COVID-19 pandemic. According to him, it would be preferable to restructure up to 65% of loans instead of allowing such loans to go bad.
The Nigerian banking sector has long been battling to deal with the issue of non-performing loans. Interestingly, Nigeria’s non-performing loan ratio improved to 6.4% as of H1 2020, compared to 11.1% during the comparable period last year.
An earlier report by Nairametrics, last month, quoted CBN’s Deputy Governor, Aisha Ahmad, to have disclosed how 17 banks submitted requests to restructure over 32,000 loans for individuals and businesses who were impacted by the pandemic. However, based on Emefiele’s explanation, yesterday, it is apparent that the number of banks that have made that same request is now more than 17, even as the volume of loan restructured is more than 32.94% as previously reported.
Do note that some top CBN officials, including Governor Godwin Emefiele, met in Abuja yesterday for the 274th meeting of the Monetary Policy Committee. Nairametrics earlier reported that majority of the members voted to retain the Monetary Policy Rate (MPR) constant at 12.5%. You may read up more on the resolutions that were reached during the meeting by clicking here.
PayPal post its strongest Q1, with net profits of $1.10 billion
PayPal currently has 392 million active accounts with net profit in Q1 rising to $1.10 billion.
The fintech juggernaut posted impressive growth in its revenues in Q1 bolstered by the growing usage of the digital economy. PayPal stated it had revenues of $6.03 billion in Q1 and earnings per share of $1.22, which outperformed market analysts’ forecast of $1.01.
Altogether PayPal currently has 392 million active accounts with net profit in Q1 rising to $1.10 billion from $84 million a year earlier.
The company is riding high taking into consideration that online shopping hit a record high spurred by COVID-19, though some market pundits argue that such could change as the pandemic eased. Still, PayPal’s stellar performance does not look likely to succumb to that prediction anytime soon.
Highlights of PayPal Q1 earning results
- Earnings per share: $1.22, adjusted, vs. $1.01 per share expected in a Refinitiv survey of analysts.
- Revenue: $6.03 billion vs. $5.90 billion expected by Refinitiv.
- Total payment volume: $285 billion vs. $265 billion expected in a FactSet survey.
“Our strong first-quarter results demonstrate sustained momentum in our business as the world shifts into the digital economy,” said CEO Dan Schulman in a statement.
The company’s impressive performance was also reflected in the addition of 14.5 million new active accounts, with 1.5 million new merchant accounts included, bringing the total merchant accounts to 31 million globally.
“Our record-breaking first quarter results underscore the ongoing strength, diversification, and relevance of our scaled, two-sided, global payments platform. We are raising our FY’21 guidance based on these strong results.” John Rainey the CFO added.
Consequently, Paypal has upgraded its service offerings with the option of the ability for splitting up purchases and paying them off for a period of time as well as the ability to purchase and sell, Bitcoin, Ethereum, Litecoin, Bitcoin Cash.
Recent price actions reveal PayPal rose as high as $259.55 in extended New York trading after the announcement was made thereby posting gains of 4.65%.
Sterling Bank posts gains amid dip in GT Bank and Zenith
The NGX Banking Index saw another decline for the second time in the month of May.
The NGX Banking Index saw another decline for the second time in the month of May. The index points dropped to 345.00 depicting a loss of -1.69%. Technical analysis shows that the bears dominated the trading session from start to finish. The NGX Banking Index saw 4 gains opposing 5 losses with 1 stalemate.
Sterling Bank’s performance was outstanding again today with a profit of +8.11% pushing the price upwards from its previous close of N1.53 to N1.60. Technical analysis shows that bullish momentum was maintained throughout the trading session. Access bank also posted a profit of +3.36% pushing the price upwards to N7.70 from N7.45 from its previous day’s close.
Jaiz bank posted a profit of +1.67% pushing the price upward from N0.60 to N0.61. Ecobank was also saved from the claws of the bears as it held profits of +0.97% pushing the price to N5.20. Technical analysis says that the price went up to meet selling pressure plunging it downwards. However, the fall was not sufficient as Ecobank still closed in profit.
Guarantee Trust BANK saw its shares crashing down as it took a -3.65% loss plunging the price downwards from N30.10 at the previous day’s close to N29.00. Technical analysis shows that there was a steady sell-off as the bearish trend was maintained with minimal interruptions.
Zenith Bank was the 2nd biggest loser as it saw its share price crash down by -3.18% pushing price downwards from N22.00 to N21.30. Technical analysis shows that consolidation was maintained almost throughout the trading session before breaking to the selling pressure at the end of the trading session.
Wema Bank saw a dip of -1.64% pushing the price from N0.61 to N0.60. Union bank also posted similar losses of -1.02% to settle the price at N4.85 from N4.90. Fidelity bank was not left out of the loss as it plunged -0.44% settling price at N2.24.
UBA held a stalemate, settling its price N7.20.
- Market sentiments trend bearish as 5 losses were held with 4 gains and 1 stalemate.
- Nairametrics advises cautious participation amid growing uncertainties.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- 2021 Q1 Results: FTN Cocoa Processor Plc reports loss after tax of N162.21 million
- Tantalizers Plc reports a loss after tax of N97.75 million in FY 2020 in Q1 2021.
- Courteville Business Solutions Plc proposes final dividend of 3 kobo per share for FY 2020.
- 2020 FY Results: UPDC Real Estate Investment Trust records over 500% growth in Profit after tax.
- Sovereign Trust Insurance records a 43% surge in profit after tax to N392.1 million in Q1 2021.