The Deputy Governor, Financial Systems Stability Directorate, Central Bank of Nigeria, Aishah Ahmad, has said banks face imminent risk of loan default from exposure to oil-related lending.
However, Ahmad, who is also a member of the Monetary Policy Committee, said the stress tests conducted by the industry regulator under low to moderate scenarios revealed that the financial system remained resilient in the face of tightened financial conditions.
In her personal statement to the MPC, Ahmad said the financial system remained vital in supporting the domestic economy through the crisis. Ahmad said, “Notwithstanding, there are imminent risks to the banking sector arising from the spillover effects of the COVID-19 pandemic. She stated that under severe stress scenarios, certain vulnerabilities in the system were evident such as reduction in earnings, deterioration in asset quality and decline in capital adequacy.
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