Total assets/liabilities of the discount houses stood at N133.76 billion at the end of the fourth quarter of 2013, indicating a decline of 14 percent and 61.2 percent below the levels at the end of the preceding quarter and the corresponding quarter of 2012, respectively, the Central Bank of Nigeria (CBN) has said.
The fall in assets relative to the preceding quarter was accounted for by the decrease in claims on Federal Government and banks, which more than offset the effect of the rise in other assets.
Correspondingly, the fall in total liabilities was attributed to the decline in capital and reserves, money-at-call and other amount owed, which exceeded the increase in other liabilities.
The CBN’s Economic Report for the fourth quarter of 2013 show that discount houses’ investment in Federal Government securities of less than 91-day maturity declined by 4.7 percent to
N31.4 billion and represented 30.6 percent of their total deposit liabilities. At this level, discount houses’ investment was 29.4 percentage points below the prescribed minimum level of 60 percent for fiscal 2013. Total borrowing by the discount houses was N40 billion, while their capital and reserves stood at N18 billion. This resulted in a gearing ratio of 2.2:1, compared with the stipulated maximum of 50:1 for fiscal 2013.
Available data from the report indicated that the total assets and liabilities of the Deposit Money Banks (DMBs) stood at N24,334.7 billion at the end of the fourth quarter of 2013, representing an increase of 4.4 percent over the level at the end of the preceding quarter. The funds, which were sourced, largely, from increased mobilisation of demand deposit and Federal Government deposit, were used for accretion to reserves and purchase government securities.
At N12,224.8 billion, banks’ credit to the domestic economy rose by 8.6 percent above the level in the preceding quarter. The development was attributed, largely, to the 346.9 percent increase in claims on the Federal Government.
The CBN’s credit to the banks fell by 1.6 percent to N229.8 billion at the end of the review quarter, reflecting the decline in overdrafts to banks, while total specified liquid assets of the DMBs stood at N6,614.79 billion, representing 39.5 percent of their total current liabilities. At that level, the liquidity ratio, rose by1.8 percentage points above the level in the preceding quarter, and was 9.5 percentage points above the stipulated minimum ratio of 30 percent. The loans-to-deposit ratio, at 36.3 percent, was 2.9 percentage points above the level at the end of the preceding quarter, but was 43.7 percentage points below the prescribed maximum ratio of 80 percent.
HOPE MOSES-ASHIKE
