Bank's Credit to Domestic Economy Rises to N13.195trn in Q4

CBN Governor, Sanusi Lamido Sanusi

From the Sunnewsonline.com.
Nigerian banks’ credit to the domestic economy rose by 7.4 per cent to N13,195.4 billion, above the level in the preceding quarter, the Central Bank of Nigeria (CBN) has said. The development was attributed, to the 11.2 and 36.3 per cent increase in claims on the State and Local Government and Federal Government, which more than offset the 1.1 per cent decline in claims on the private sector.

CBN report for the fourth quarter 2012, obtained from its website yesterday indicated that total specified liquid assets of the banks stood at N6176.0 billion, representing 49.7 per cent of their total current liabilities. At that level the bank said, the liquidity ratio, rose by 2.0 percentage points above the level in the preceding quarter, but was 19.7 percentage points above the stipulated minimum ratio of 30.0 per cent. Also, the loans to deposit ratio, at 42.3 per cent, was 2.3 percentage points below the level at the end of the preceding quarter, and 37.7 percentage points below the prescribed maximum ratio of 80.0 per cent.

In its Monetary Policy Committee Meeting held in January 2013, the committee observed that average prime lending rate increased slightly to 16.54 per cent in December 2012 from 16.48, 16.51 per cent in October and November 2012, respectively. In contrast, the average maximum lending rate fell marginally to 24.61 per cent in December 2012 from 24.65 and 24.70 per cent, respectively, in October and November, respectively while the weighted average savings and term deposits rate decreased to 5.50 per cent in December from 5.57 per cent in the preceding month.

The committee, therefore, encouraged the Bank to fast track the financial inclusion strategy to improve financial intermediation and the effectiveness of the transmission mechanism of monetary policy and to adopt ways of moderating the high spread between deposit and lending rates.

The apex bank report further indicated that the total assets and liabilities of the Deposit Money Banks (DMBs) stood at N21, 303.95 billion at the end of the fourth quarter of 2012, representing an increase of 2.5 per cent above the level at the end of the preceding quarter. The funds, which were sourced, largely, from increased mobilization of deposit liabilities, were used mainly to extend credit to the Federal government and accretion to the capital accounts. It stated that Central Bank’s credit to the DMBs, largely loans and advances, declined by 25.7 per cent to N228.03 billion at the end of the review quarter.