Sterling Bank Plc will continue to adopt amicable resolution or take drastic legal actions, when necessary, to achieve debt recovery outcomes.
The lender said in a statement that such strategies included restructuring for accelerated payoffs and possible foreclosure or disposal of pledged assets of defaulting debtors.
It said this would ensure a progressive drop in its non-performing loan ratio, which had decreased significantly year on year since 2016.
The bank said it was becoming common for debtors “to exasperate lenders by their resort to subtle blackmail, unfounded allegations and other underhand tactics, which include frivolous litigation to delay or avoid meeting their loan obligations. But financial institutions have adopted effective strategies to counter this ploy and recover the debts owed.”
The lender’s Group Head, Credit Collection and Recovery, Abiodun Aderoju, said, “Sterling Bank witnessed a 383 per cent increase in recoveries between 2016 and 2017. This resulted in a significant improvement in asset quality as reflected in the reduction in non-performing loan ratio by 370 basis points to 6.2 per cent in 2017 from 9.9 per cent in 2016.
“We are building aggressively on this momentum to ensure that defaulting customers meet their debt obligations to the bank.”
Aderoju stated that the bank had continued to maintain a disciplined and prudent approach to loan growth in line with its risk management framework.
“The impact of our recovery efforts would be felt by the end of the financial year because it will result in a further drop in our non-performing loan portfolio. We are keen on achieving this despite the antics of debtors who take their obligations lightly.”
He said although the bank’s gross loans and advances in 2017 increased by 29.5 per cent to N617.6bn and net loans and advances by 27.7 per cent to N598.1bn, the bulk of the increase was primarily driven by cash-backed facilities with limited credit risks. According to him, net loans and advances between 2013 and 2017 increased at a compound annual growth rate of 16.6 per cent, and loans to corporate entities and organisations increased by 31.1 per cent and accounted for 97.6 per cent of overall loans disbursed.