Nigeria’s banking sector is facing renewed pressure on asset quality as the withdrawal of regulatory forbearance pushed the industry’s non-performing loan (NPL) ratio close to 10 percent, exposing stress in loan portfolios despite strong capital and liquidity buffers.
Data from the Central Bank of Nigeria (CBN) monthly economic report showed that the NPL ratio rose by 1.82 percentage points to 9.85 percent I February 2026, nearly double the prudential threshold of 5.00 percent, following the reclassification of loans after the expiration of regulatory relief measures.
The increase underscores the challenges banks face as they adjust to tighter regulatory conditions after years of forbearance introduced to cushion the impact of economic disruptions. The latest reading also signals a deterioration in asset quality even as the broader banking sector remains resilient on other key financial soundness indicators.
The industry liquidity ratio rose to 69.27 percent, significantly above the regulatory minimum of 30.00
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