The total assets and liabilities of commercial banks operating in the country has increased by 4.6 per cent to N41.4 trillion as at the end of October 2019, against the level it stood at the end of September 2019.
The economy report for November by the Central Bank of Nigeria (CBN) stated that funds were sourced, mainly, from an increase in unclassified liabilities, and the mobilisation of time, savings and foreign currency deposits.
According to the report, the funds were used, mainly, to acquire unclassified assets, foreign assets and to boost reserves.
The economy report disclosed that banks’ credit to the domestic economy rose by 0.6 per cent to N22.26trillion at end-October 2019, compared with the level at the end of the preceding month.
The report attributed the growth to the rise in its claims on the private sector.
The October report stated also that, “Total specified liquid assets of banks stood at N14,272.4 billion at end October 2019, representing 59.3 per cent of their total current liabilities.
“At that level, the liquidity ratio was 0.9 percentage point lower than the level at the end of the preceding month, and was 29.30 percentage points above the stipulated minimum liquidity ratio of 30.0 per cent.
“The loan-to-deposit ratio, at 61.9 per cent, was 0.3 percentage point below the level at the end of the preceding month and was lower than the maximum ratio of 80.0 per cent by 18.10 percentage points.”
The report stated that banks’ borrowing from the CBN rose by 107 per cent to N662 billion in November 2019.
On the contrary, banks’ deposit placement with the apex bank fell by 18.7 per cent to N443.6 billion during the month. Both figures reflect increasing liquidity pressures on the banks.
The CBN lends to banks through its Standing Lending Facility (SLF) while it accepts deposit placement from banks under its Standing Deposit Facility (SDF). While the apex bank charges 15.5 per cent interest rate on loans to banks, it pays 8.5 per cent interest on deposits from banks.
According to the CBN’s economic report for November 2019, “The total SLF granted, during the review period was N662.44 billion (made up of N490.29 billion direct SLF and N172.15 billion Intraday Lending Facilities (ILF) converted to overnight repo).
“Nigeria records $2.8billion Balance of Payments surplus in Q4’18 “The total SDF granted during the review period was N443.63 billion with a daily average of N26.09 billion in the 17 transaction days from November 1- 26, 2019. Daily request ranged from N6.30 billion to N42.75 billion. The cost incurred on SDF in the month stood at N0.16 billion.”