By Kayode Tokede, Lagos –
Despite the nation’s macro economy headwinds, loan exposure of seven commercial banks to the South Western states increased by 19.7 per cent in 2016, LEADERSHIP can exclusive report.
The banks are Zenith Bank Plc, Unity Bank Plc, Sterling Bank Plc, Fidelity Bank Plc, Diamond bank Plc, Stanbic Holdings Plc and First City Monument Bank Plc.
These banks reported N4.39 trillion loan exposure to the Southwestern states against N3.7 trillion reported in 2015.
Lagos State leads other Southwestern states in banks’ loan exposure in real sectors of the economy, followed by Ogun State, data gathered by our correspondent has revealed.
Finance experts often criticized financial institutions for making out credits to a certain geographical location, while others argued that banks grant loans to trusted entities and industries location.
Managing director of Highcap Securities Limited, Mr. David Adnori, said the Southwestern states, most especially Lagos, control the highest fraction of non-oil sector of the economy.
He said, “It is expected that credit risk to the Southwestern states will be on higher side. From the non-oil sector, Lagos is leading the pack. Mind you, those banks’ heads are located in Lagos, which allows spreading of the loans to other geographical part of the country”.
In 2016, Diamond Bank came top by proportion, while Zenith Bank came top by value of loan exposure to the considered geographical location.
Diamond Bank’s loan exposure in 2016 to Southwestern states rose by 47.2 per cent to N703.99 billion as against N478.3 billion in 2015.
The lender’s total loan exposure in 2016 was at N783.7 billion, an increase of 32.7 per cent compared with N590.4 billion recorded in 2015.
With this, the bank’s total loan exposure to South Western states contributed 90 per cent and 81 per cent in 2016 and 2015 respectively.
Zenith Bank granted gross loans of about N2.36 trillion in 2016 from N2.19 trillion in 2015. The bank’s loan exposure to the Southwestern states rose by 10 per cent to N1.78 trillion compared with N1.6 trillion in 2015, while loan exposure to Northeastern part of the country also increased by 18 per cent to N83.09 billion from N70.47 billion in 2015.
Meanwhile, Zenith Bank’s loan exposure to other Africa countries moved from N63.2 billion in 2015 to N91.6 billion in 2016.
Sterling Bank’s loan exposure to Southwestern states increased by 43 per cent to N415.8 billion from N291.3 billion, while loan exposure to North Eastern part of the country dropped significantly by 15 per cent to N2.1 billion in 2016 as against N2.5 billion in 2015.
Sterling Bank’s loan exposure to Southeast and Northwest also dropped by 34 per cent and 23 per cent respectively in 2016.
Unity Bank and Fidelity Bank loan exposure to South West rose by 25 per cent and 24 per cent to N92.48 billion and N535 billion from N74 billion and N431.99 billion respectively.
For Unity Bank, the lender’s loan exposure in Lagos State rose by 28 per cent to N80.38 billion in 2016 from N62.8 billion.
In Ogun State, it gained 10.8 per cent to N6.4 billion and Osun State, it rose by 21.7 per cent to N1.8 billion.
In Ekiti, 14.6 per cent to N604.8 million; Ondo, Unity Bank loan exposure appreciates by 23 per cent to N2.56 billion while in Oyo state, it dropped by 43 per cent to N744 million from N1.3 billion in 2015.
As Stanbic Holdings loan exposure to South West marginally rose by 1.1 per cent to N308 billion in 2016 from N305.2 billion in 2015, FCMB loan exposure leapt by nearly 17 per cent from N477.7 billion to N557.9 billion in the year under review.