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UPDATE 1-Access Bank says naira devaluation drove 2016 loan growth
March 9, 2017 / 3:17 PM / 6 months ago

UPDATE 1-Access Bank says naira devaluation drove 2016 loan growth

(Adds CEO comments)

By Chijioke Ohuocha

LAGOS, March 9 (Reuters) - Nigeria’s Access Bank said its lending grew by 32 percent in 2016, far above its target for that year, due largely to a devaluation of the naira which drove up the local currency value of foreign loans.

Core credit rose only 8 percent, it said.

Access had set a 10 percent target last year for loan growth and said it would keep the same target for this year, while monitoring the level of bad loans.

Loans grew 25 percent in 2015, it said in a presentation.

Nigerian loan books - nearly half of them in dollars - have been hammered by the economy’s first recession in a quarter century. Lower oil prices have sent the currency plunging and caused acute dollar shortages.

The naira lost around a third of its value against the dollar last year after the central bank stopped trying to peg it. The currency has since weakened further on the black market despite interventions to maintain a stronger official rate.

Access Bank chief executive Herbert Wigwe told an analysts’ call that it saw no need to raise new dollar financing but that it had completed an initial public offering for its subsidiary in Ghana, selling a 6 percent stake for $6 million.

Access Bank said its non-performing loans (NPL) stood at 2.1 percent in 2016, up from 1.7 percent in 2015. Industry NPLs hit 12 percent last year, according to a government estimate, far above a 5 percent central bank limit.

On Monday, Access Bank posted pretax profit of 90.34 billion naira ($290 million) for 2016, up from 75.04 billion naira a year earlier and proposed a dividend of 0.40 naira.

Its shares were up 3.72 percent to 6.53 naira on Thursday, taking gains to 10 percent this year after they rose 21 percent a year ago.

Wigwe said the group had bolstered the capital base of Access Bank Ghana in the event of a deterioration of the local economy.

$1 = 314.20 naira Editing by Ruth Pitchford and Mark Potter

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