Journal of Economics and Business

ISSN 2615-3726 (Online)

ISSN 2621-5667 (Print)

Published: 03 April 2018

Non-Performing Loans and Banks’ Performance in Nigeria: Evidence From First Bank Nigeria Plc

Valentine Ogudo, Babatunde Afolabi

Afe Babalola University, Nigeria

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10.31014/aior.1992.01.01.10

Abstract

In recent past, many Nigerian banks became weak and highly unprofitable due to high non-performing loans portfolio accumulated by the banks. It is widely believed that the major reason for the huge non-performing loan portfolio can be attributed to insider dealing due to excessive and collaterised loans to bank directors that eventually became bad and irrecoverable. The study seeks to examine the effects of Non-performing loans on the performance of the banking sector in Nigeria. The exploratory research design was adopted in the study. The result of the analysis showed that high level of non-performing loans reduces the performance of banks in the long run in Nigeria. The study, therefore, recommends amongst other things that credit reporting and supervising authorities should be enhanced to stem the ugly tide of the high level of non-performing loans in the Nigerian banking sector.

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