FCMB Group Plc plans to restructure half of its loans after plunging oil prices, the COVID-19 lockdown and naira devaluation hindered the ability of its clients to repay their debt.
Credit facilities across industries ranging from oil and gas to small- and medium-sized enterprises would be reorganised, Bloomberg quoted the Lagos-based lender to have said during a presentation yesterday.
New terms would include a six-to 12-month moratorium on principal debt repayments and an extension on loan maturities of up to two years.
Plummeting crude prices have dealt a hammer blow to the economy of Africa’s largest oil producer, just as the outbreak of Covid-19 shutters businesses and the movement of people to contain the spread of the disease. Authorities devalued the local currency by four per cent against the dollar in March.
The measures by FCMB come after its impairment charges surged by 61 per cent to N3.7 billion in the first quarter, according to a filing to the Nigerian Stock Exchange. Loans in the period rose seven per cent to N764.3 billion from a year earlier.
The lender plans to increase impairments to offset losses in unhedged upstream assets in the oil and gas industry, it said.
About 37 per cent of the bank’s customers have foreign-currency loans and earn income in naira, so the lender will convert those into the local currency, FCMB said.
The bank is targeting a loan growth of between 10 to 14 per cent this year.