Foreign assets (net) of the banking system fell by 12.5 percent to N6,436.0 billion at end-January 2015, in contrast to the increase of 2.4 percent at the end of the preceding month, according to the Central Bank of Nigeria (CBN).
The development was attributed to the 24.5 percent and 10.7 percent decline in the banks and CBN holdings, respectively.
Other assets (net) of the banking system, on a month-on-month basis, declined by 3.7 percent to negative N6,903.3 billion, in contrast to the 3.1 percent growth recorded at the end of the preceding month. The development reflected, largely, the fall in unclassified assets of the CBN in the review period.
The CBN’s economic report for the month of January released on Monday shows that at N17,278.4 billion, aggregate banking system credit (net) to the domestic economy at end-January 2015 rose by 7.1 percent, on month-on-month basis, compared with the growth of 7.2 percent at the end of the corresponding period of 2014, but was in contrast to the 1.5 percent decline at end-December 2014. The development reflected, largely, the 55.4 percent increase in (net) claims on the Federal Government.
Meanwhile, the banking system’s credit (net) to the Federal Government, on month-on-month basis, rose by 55.4 percent to negative N899.7 billion, compared with the growth of 71.1 percent at the end of the corresponding month of 2014, but was in contrast to the 15.4 percent decline at the end of the preceding month. The development reflected, largely, the increase in banking system’s holdings of government securities.
At N18,178.1 billion, banking system’s credit to the private sector increased by 0.2 percent, over the preceding month’s level, compared with the 0.1 percent increase at the end of the preceding month. The development reflected, wholly, the 0.3 percent rise in credit to the core private sector.
Available data indicated that total assets and liabilities of the commercial banks amounted to N27,675.8 billion, showing an increase of 1.0 percent above the level at the end of December 2014. Funds were sourced mainly from draw down on reserves; in foreign assets disposal; unclassified liabilities, and mobilisation of demand deposits. The funds were used, largely, for acquisition of Federal Government securities; unclassified assets, and reduction in time, savings and foreign currency deposits.
At N14,162.9 billion, banks’ credit to the domestic economy rose by 2.5 percent above the level in the preceding month. The development was attributed to the increase in claims on both the Federal Government and the private sector during the review month.
Total specified liquid assets of the commercial banks stood at N6,623.6 billion, representing 36.8 percent of their total current liabilities. At that level, the liquidity ratio rose by 2.3 percentage points above the level in the preceding month and was 6.8 percentage points above the stipulated minimum ratio of 30 percent.
The loans-to-deposit ratio, at 64.5 percent, was 0.9 percentage point above the level at the end of the preceding month, but was 15.5 percentage points below the prescribed maximum ratio of 80 percent, respectively.
HOPE MOSES-ASHIKE
