Atlas Mara’s Nigerian Bank Books $119m Loans to Meet Credit Rule

LAGOS (Capital Markets in Africa) – Union Bank of Nigeria Plc increased its pace of lending in the first half of this year to meet central bank’s minimum loan to deposit ratio ahead of September deadline.

The lender, held by former Barclay‘s Bank Plc Chief Executive Officer Bob Diamond’s Atlas Mara Ltd., increased loan book by 8% to 563 billion naira as at June from 519.7 billion naira in December, raising loan to deposit ratio to 63%, from 55%, chief financial officer Joseph Mbulu says at an investor call in Lagos on Tuesday.

Nigeria’s central bank this month asked lenders to use at least 60% of their deposits for loans by the end of September, failing which they’ll be forced to leave more of their cash with the central bank. Moody’s mentioned Union Bank as one of the lenders that falls short of the requirement.

The Lagos-based bank sees a higher loan to deposit ratio as it targets to grow the loan book this year by as much as 12% after it declined 7.3% in 2018, according to the CFO. It is targeting retail borrowers and “growth segments” of the economy for loans, he said.

Source: Bloomberg Business News