The indebtedness of oil & gas and electricity companies in the country to banks as of third quarter end climbed by N200 billion to N5.85 trillion, data obtained from the National Bureau of Statistics (NBS) on Thursday showed.

The N5.85 trillion debt constituted 29.44 per cent of the total exposure of banks to the private sector as of the end of September, which stood at N19.87 trillion, according to the NBS.

Energy firms in Nigeria, as indicated by NBS data, accounted for the heftiest portion of bank loans by sector, which rose from N4.94 trillion in Q2 to N5.12 trillion in Q3, reflecting a N180 billion increase.

The NBS noted that the non-performing loans of the oil and gas industry eased by N30.53 billion in the period under review, decreasing from N268.79 billion to N238.26 billion.

Meanwhile, the credit quality of facilities granted by lenders to the power industry deteriorated, with bad loans growing by 6.17 per cent from N30.81 billion to N32.71 billion, the NBS said.

In a report earlier this month, credit rating agency Fitch observed that the asset quality of Nigerian banks had declined sharply with the slump in oil prices, adding that the oil and gas industry accounted for 28 per cent of total loan portfolio in the first half of the year.

“However, the sector has performed better than expected since the start of the crisis, limiting the rise in credit losses this year due to a combination of debt relief afforded to customers, a stabilisation in oil prices, the hedging of financial exposures and the widespread restructuring of loans to the sector following the 2015 crisis,” it said.

Fitch projected that the asset quality of Nigerian lenders would worsen further in the next 12 to 18 months.

It went further to say that the average impaired loan ratio would range between 10 per cent and 12 per cent by the end of next year.