Total assets and liabilities of the discount houses stood atN153.3 billion at end-April 2015, showing an increase of 40.1 per cent above the level at end-March 2015, the Central Bank of Nigeria (CBN) said in a report.
The development was accounted for, largely, by the 242.3 and 875.4 percent rise in claims on state government and other investments, respectively.
Correspondingly, the increase in total liabilities was attributed to the 153.5 and 114.4 percent rise in “capital and reserves” and borrowings, respectively.
The CBN’s Economic Report for the month of April show that discount houses’ investment in Federal Government securities stood at N41.64 billion and accounted for 40.0 per cent of their total deposit liabilities.
Thus, investment in Federal Government Securities was 20.0 percentage points below the prescribed minimum level of 60.0 percent. At that level, discount houses’ investment on NTBs fell by 17.5 percent below the level at the end of the preceding month. Total borrowing and amount owed by the discount houses was N52.3 billion, while their capital and reserves amounted to N33.91 billion. This resulted in a gearing ratio of 1.5:1, compared with the stipulated maximum target of 50:1 for fiscal 2015.
On the other hand, total assets and liabilities, of the deposit money banks amounted to N28,962.8 billion, showing an increase of 0.9 per cent over the level at the end of March 2015. Funds were sourced mainly from increased claims on the central government; time, savings and foreign currency deposits as well as central government deposits. The funds were used, largely, for accretion to reserves, acquisition of unclassified assets and reduction in foreign liabilities.
At N16,825.2 billion, banks’ credit to the domestic economy declined by 2.6 percent below the level in the preceding month. The development was attributed to the fall in claims on the federal government and the private sector during the review month.
Total specified liquid assets of the commercial banks stood at N6,330.8 billion, representing 34.8 per cent of their total current liabilities. At that level, the liquidity ratio fell by 0.3 percentage point below the level in the preceding month, but was 4.8 percentage points above the stipulated minimum ratio of 30.0 per cent.
The loans-to-deposit ratio, at 64.9 per cent, was 1.2 and 15.1 percentage points below the levels at the end of the preceding month, and the prescribed maximum ratio of 80.0 per cent, respectively
