(Adds details, quote)
By Chijioke Ohuocha
ABUJA, Feb 26 (Reuters) - Nigeria’s Zenith Bank will slow its loan growth this year after extending credit aggressively to businesses last year to comply with a central bank minimum loan-to-deposit ratio, the top-tier lender said on Wednesday.
Zenith Bank said loans will grow 2% in 2020 after a 22% expansion last year. It said gross loans increased to 2.46 trillion naira in 2019 from 2.02 trillion naira a year earlier.
The lender said loans could grow further if large funding opportunities emerged during the year.
“Loan growth is a reflection of what we see in the macro-environment,” said Ebenezer Onyeagwu, who took over as Zenith’s chief executive last year.
“(We) can’t grow beyond the economy,” he said, citing a possible slowdown in demand due to the impact of the coronavirus in China, Nigeria’s major trading partner.
Africa’s largest economy, posted its highest quarterly GDP growth rate in the fourth quarter since a 2016 recession, after its oil production rose throughout the year.
The country has struggled to shake off the effects of that recession which ended in 2017, and has been grappling with low growth since.
Last week, the International Monetary Fund cut its growth forecast for Nigeria in 2020 to 2% from 2.5%, citing lower demand for oil due to fears that the coronavirus outbreak in China will cause a slowdown.
In December, the bank said it achieved a 65% loan-to-deposit ratio after the central bank asked lenders to maintain that ratio or face a higher cash reserve levy, part of measures aimed at getting credit flowing in the country. (Reporting by Chijioke Ohuocha; editing by David Evans)