Connect with us

News

Deposits in Banks have Grown by 19% to N43 Trillion.

Deposits in banks have grown by 19% to N43 trillion.

Published

on

Advertisements
Wema Bank Alat

Deposits in banks have grown by 19% to N43 trillion.

Bank deposits in Nigeria increased by N6.92 trillion from N36.13 trillion at the end of October 2021 to N43.05 trillion in the same period of 2022.

Advertisements
Advertisements

This was stated in the members of the Monetary Policy Committee of the Central Bank of Nigeria’s personal statements.

NewsReport gathered that the “Notably, total assets climbed to N69.67 trillion in October 2022 from N57.3 trillion in October 2021, while total deposits rose to N43.05 trillion from N36.13 trillion over the same time,” said Aishah Ahmad, deputy governor of the CBN’s Financial System Stability Directorate. Between October 20, 2021, and October 20, 2022, total credit climbed by N5.32 trillion to N28.81 trillion, with notable increases in credit to the manufacturing, general commerce, and oil and gas sectors.

“The continued credit expansion, particularly to output-enhancing sectors, is expected to further support economic activities.” However, sustained regulatory vigilance is required to mitigate any potential crystallization of credit risk in the financial system in view of lingering macroeconomic risks.

“As anticipated, average lending rates have risen between June and October 2022, partly driven by the tight monetary policy stance of the MPC, which requires vigilance by the banks to forestall defaults and preserve asset quality.”

She said sustained implementation of the policy on GSI and effective credit risk management policies by the banks were useful in that regard, while recent initiatives of the Central Bank, such as the naira redesign, were expected to enhance monetary policy transmission via the banking system.

Notwithstanding the strong financial system fundamentals and satisfactory stress test results, she said, the bank must remain vigilant and proactively manage operational, asset quality, and other risks to financial system stability, especially in the challenging global economic environment.

Also, a member of the MPC, Shonubi Folashodun, said the banking system had remained resilient so far in 2022, even as it continued to grapple with the effects of a challenging macroeconomic environment on businesses.

He said, “The industry non-performing loan ratio was 4.8 percent in October 2022, below the 5.0 percent threshold, while the industry liquidity ratio was 40.1 percent, above the 30.0 percent minimum level. Of note is the sustained growth in total industry deposits, credits, and assets, reflecting the positive impact of various measures taken by the Bank.

“Industry capital adequacy, though lower at 13.4 percent, was above the 10.0 percent prudential minimum.” “While domestic claims on the private sector have increased significantly, the government has pushed the annualized growth of the major monetary aggregate slightly above the benchmark for fiscal 2022, highlighting the monetary aspect of the drivers of inflationary pressure.”

An MPC member, Robert Asogwa, said the domestic financial sector was still resilient in November, except for observed volatility in the stock market.

He said, “The banking sector indicators are robust, similar to the position at the last MPC meeting, with the non-performing loan ratio declining further from 4.9 percent to 4.8 percent in October 2022 and with further increases in total assets.”

“Of particular interest is the addition of above N1tn in total industry deposits between September and October 2022.

“Of marginal concern is the consistent decline in the capital adequacy ratio of the banks between June and October 2022, but this is attributed to increases in total risk-weighted assets, which for some time has been higher than the total qualifying capital.”

 

Advertisements
Advertisements

Copyright © 2021 NewsReport. Designed by DasodHub.

Verified by MonsterInsights