Bad Loans Surge 8.03% as CBN Ends Forbearance

In January 2026, the Central Bank of Nigeria (CBN) reported an 8.03% rise in bad loans after the conclusion of regulatory forbearance measures. The non-performing loan (NPL) ratio increased by 0.52 percentage points to 7.51%, surpassing the CBN's prudent threshold of 5%.

This rise indicates a further deterioration in asset quality across the banking industry, despite the CBN's assertion that the sector remains resilient. The increase in bad loans follows the CBN's withdrawal of forbearance, which had allowed banks to restructure loans affected by the COVID-19 pandemic without immediate classification as non-performing.

The CBN's June 2025 directive had included measures to strengthen capital buffers and improve balance sheet resilience, but the latest data suggests that banks are now recognizing credit weaknesses in their portfolios. The CBN has recommended enhanced credit discipline and operational integration across financial institutions to mitigate risks associated with rising non-performing loans.