May 23 (Bloomberg) -- Nigerian banks’ ratio of non-performing loans to total credit plunged to 3.8 percent in April from 35 percent in November 2010 as bad debt was shifted to a government-sponsored agency, the central bank said.
The decline followed the takeover of 4.7 trillion naira ($29.7 billion) of poor-quality loans by the Asset Management Corp. of Nigeria, or Amcon, Central Bank of Nigeria Governor Lamido Sanusi said today at a conference in Lagos, the nation’s commercial capital.
Nigeria implemented new banking regulations following a debt crisis in 2008 and 2009. The central bank fired eight chief executives of the country’s 24 banks and created Amcon to buy lenders’ bad debts and stabilize the industry. Amcon spent 5.6 trillion naira in 2011 to acquire the non-performing loans, Chief Executive Officer Mustafa Chike-Obi said in December.
Nigerian banks have seen improvements in risk management and corporate governance following the changes, Sanusi said. Risks to the banking system include “rising flow of hot money into the financial system and terrorism,” he said.
To contact the reporter on this story: Emele Onu in Lagos at email@example.com
To contact the editor responsible for this story: Dulue Mbachu at firstname.lastname@example.org