Effect Of Non-Performing Loans On The Performance Of Commercial Banks In Nigeria (A Study Of First Bank Of Nigeria Plc And Union Bank Of Nigeria Plc. 2010-2014)

ABSTRACT

This study was' carried out to ascertain and examine the impact of non-performing loans on the performance of commercial banks in Nigeria. Secondary data was obtained from the financial statement of Union Bank of Nigeria plc. and First bank of Nigeria plc. and it was analyzed using sample regression. The empirical analysis result revealed that non-performing loans' has ,significant impact on the profitability of commercial banks in Nigeria and also non-performing loans' has sign i/leant impact on the liquidity of commercial banks in Nigeria. It was recommended that Commercial banks should develop credit procedure, policies' and anal analytical capabilities for handling non-performing loan, strategies on how' to attract and return more deposits' so as to further improve on their lending performance, ensure good planning which encompasses budgeting, reviews and incentives and formulate critical, realistic and comprehensive strategic and financial plans. There should be closer consultation and cooperation between commercial banks' and regulatory authorities'. Also, potential borrowers should be critically assessed to ascertain their credit worthiness before they are given loans, Above all, management of' First bank and Union bank should know their customer’s before granting loans to them, in fact adhering strictly to the 5C  of credit in modern banking practice.