Nigerian Banks Brace for Virus, Oil Crash In Blow to Recovery

Nigerian banks still trying to recover from an economic contraction in 2016 now face a triple whammy of coronavirus, plunging oil prices and volatile markets that could further delay progress, Bloomberg News reported. The 2014 collapse in crude dried up foreign exchange in Africa’s biggest producer of the commodity, resulting in the first recession in 25 years and a currency devaluation. Businesses struggled to make repayments, heaping piles of toxic loans onto the books of lenders. The conditions, “pose downside risks to the profitability of banks in 2020, mainly given the likely impact on asset quality and loan growth,” Aderonke Akinsola, a banking analyst at Lagos-based Chapel Hill Denham said by phone. “Capital adequacy ratios of banks are more at risk amid the current macro realities.” Read more