Banks’ credit to the domestic economy fell to N12.1 trillion, representing 1.2 percent below the level in the preceding month, according to a report by the Central Bank of Nigeria (CBN).
The development was attributed to the 1.2 percent fall apiece in claims on the Federal Government and the private sector during the review month.
Available data from the Economic Report for the month of January released last week by the CBN indicated that total assets and liabilities of the deposit money banks (DMBs) amounted to N24,408.9 billion, showing an increase of 0.3 percent above the level at the end of the preceding month. Funds were sourced mainly from increased mobilisation of time, savings and foreign currency deposits; accretion to capital, and unclassified liabilities. The funds were used, largely, for the acquisition of foreign assets, unclassified assets and Federal Government securities.
According to the report, total specified liquid assets of the DMBs stood at N6,705.4 billion, representing 40.1 percent of their total current liabilities. At that level, the liquidity ratio rose by 0.5 percentage point above the level in the preceding month and was 10.1 percentage points above the stipulated minimum ratio of 30.0 percent. The loans-to-deposit ratio, at 37.5 percent, was 0.1 and 42.5 percentage points below the levels at the end of the preceding month and the prescribed maximum ratio of 80.0 percent, respectively.
Available data indicated mixed developments in the banks’ deposit and lending rates during the review month. With the exception of the 1-month deposit rate, which fell by 2.95 percentage points to 4.83 percent, all other deposit rates of various maturities rose from a range of 2.53 percent – 7.96 percent to a range of 3.27 percent – 9.8 percent. At 8.36 percent, the average term deposit rate rose by 1.67 percentage points above the level in the preceding month.
Similarly, the average maximum lending rate rose by 0.62 percentage point to 25.52 percent. However, the average prime lending rate fell by 0.06 percentage point to 16.95 percent during the review month. Consequently, the spread between the weighted average term deposit and maximum lending rates narrowed by 1.05 percentage point to 17.16 percent in January 2014. Also, the margin between the average savings deposit and maximum lending rates also narrowed by 0.12 percentage point to 22.25 percent at the end of the review month.
At the interbank call segment, the weighted average rate, which stood at 10.75 percent in the preceding month, fell by 0.75 percentage point to 10 percent in January 2014. Similarly, the weighted average rate, at the open-buy-back (OBB) segment, fell by 0.76 percentage point to 10.48 percent in the review month, from 11.24 percent in December 2013. The Nigeria interbank offered rate (NIBOR) for 7-day and 30-day tenors also fell to 10.85 percent and 11.18 percent, respectively, in the review period from 11.46 percent and 11.87 percent in the preceding month. With the headline inflation rate at 8 percent at end-January 2014, most rates were negative in real terms with the exception of lending and the average interbank call rates.
