By: Ganiyu Olayinka
Sterling Bank has kept its non-performing loan (NPL) ratio broadly stable over the past ten years, edging up only slightly from 4.80 per cent in the first quarter of 2016 to 4.93 per cent in the first quarter of 2026 thereby staying consistently under the Central Bank of Nigeria’s (CBN) five per cent prudential ceiling throughout that period.
This performance stands in sharp contrast to the wider industry, where NPL ratios climbed to between eight and nine per cent in the same quarter.
Sector-wide bad loans hit 8.03 per cent in January 2026, according to the CBN’s Economic Report for that month, marking a 0.52 percentage point increase from 7.51 per cent recorded in December 2025.
That figure sits well above the CBN’s five per cent prudential benchmark, pointing to continued erosion in asset quality across Nigerian banks, even as the apex bank continues to describe the sector as fundamentally sound.
According to the report, the uptick followed banks reclassifying loans after forbearance measures were withdrawn, pushing the ratio to 8.03 per cent above the regulatory threshold.
By February, the sector’s average NPL ratio had climbed further, to 9.85 per cent.
The CBN cautioned that a persistent rise in non-performing loans risks weakening asset quality and eroding banks’ balance sheets, potentially creating broader systemic risk.
To address this, the regulator called for deeper integration of the Global Standing Instruction (GSI) framework across financial institutions, aimed at improving loan recovery and reinforcing credit discipline sector-wide.