Nigeria’s banking sector recorded a rise in bad loans in 2025 after the Central Bank of Nigeria withdrew the regulatory forbearance granted to lenders during the COVID-19 pandemic, according to the apex bank’s latest macroeconomic outlook report.
The report showed that the banking industry’s Non-Performing Loans ratio climbed to an estimated seven per cent, exceeding the prudential benchmark of five per cent. The CBN said the increase reflected the impact of ending the temporary reliefs earlier granted to banks to cushion the effect of the pandemic on borrowers.
However, regulatory forbearance had allowed banks to restructure loans affected by the pandemic without immediately classifying them as non-performing, but with the withdrawal of the measure, a number of previously restructured facilities have now crystallised as bad loans, pushing the industry ratio above the regulatory ceiling.
