Loans from commercial and merchant banks in Nigeria fell to N52.656 trillion in June 2025, the lowest level recorded in 14 months as lenders tightened credit amid regulatory pressures. The drop signals a notable retrenchment in bank lending activity across the country.
Okay News reports that the Central Bank of Nigeria (CBN), Nigeria’s apex bank, published the figure in its latest quarterly statistical bulletin, showing the last comparable low was N51.467 trillion in April 2024. The bulletin highlights a clear month-on-month contraction in credit supply.
The June total represents a N2.739 trillion decline from May’s N55.395 trillion, a 4.95% month-on-month fall. On a year-on-year basis, lending was broadly unchanged, slipping by roughly N9 billion from N52.665 trillion in June 2024.
Bank executives say the pullback reflects a cautious approach as institutions ready themselves for revised recapitalisation rules. The CBN has set March 30, 2026 as the deadline for banks to meet the new capital requirements, a timetable shaping lending and balance-sheet choices.
Quarterly movements in 2025 were mixed: loans were N54.153 trillion in January, eased to N53.059 trillion in February, and rose to N54.136 trillion in March. These fluctuations show banks balancing the need to extend credit with the imperative to preserve capital and comply with regulation.
Commercial banks typically provide personal, business, mortgage and consumer credit to households and small and medium enterprises. Merchant banks concentrate on corporate lending, trade finance, project finance and advisory-linked financing for larger firms and cross-border deals.
The CBN’s macroeconomic outlook also flagged a deterioration in asset quality after pandemic-era relief measures ended. The banking industry’s Non-Performing Loans ratio was estimated at 7%, above the prudential ceiling of 5%, after previously restructured facilities were reclassified.
Higher bad loans combined with looming capital demands are likely to keep lending conservative in the near term, with consequences for credit access, investment and economic activity. Observers say banks will need to strengthen capital buffers while selectively supporting viable borrowers.
