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Credit to private sector rises to N17.789tn

By on November 27, 2014

Banking sector credit to the private sector increased year-on-year to N17.789 trillion at the end of October 2014, compared to the N17.659 trillion it stood at the end of September 2014.
The Central Bank of Nigeria (CBN) disclosed this in its latest money and credit statistics for October 2014.
In addition, the central bank data also revealed that broad money (M2), which generally is made up of demand deposits at commercial banks and monies held in easily accessible accounts fell slightly year-on-year from N16.570 trillion as at September, to N16.323 trillion in October. Similarly, narrow money (M1), which includes all physical monies such as coins and currency along with demand deposits and other assets held by the central bank declined year-on-year to N6.519 trillion as at October, up from the N6.616 trillion recorded the previous month.
Also, currency outside banks dropped to N1.185 trillion in October, lower than the N1.243 trillion it was the previous month.
Similarly, currency-in-circulation dropped marginally to N1.534 trillion at the end of October, compared to the N1.548 trillion it was the previous month.
However, the central bank data showed that the total amount of banks’ reserves with the central bank increased to N3.543 trillion in the month under review, from N3.334 trillion September.

But demand deposits, which are funds held in an account from which deposited funds can be withdrawn at any time without any advance notice to the depository institution fell marginally from N5.373 trillion in September,  to N5.333 trillion in the month under review.
Also, quasi money, which is made up of highly liquid assets that can easily be converted to cash dropped to N9.804 trillion in October, from N9.954 trillion the previous month, just as Net Foreign Assets reduced from N7.608 trillion to N6.918 trillion. Net Domestic Assets however climbed marginally to N9.405 trillion, from N8.963 trillion the previous month.
The Deputy Governor, Economic Policy, CBN, Dr. Sarah Alade recently revealed that gross loans by banks increased by 21.03 per cent from N9.278 trillion in August last year to N11.229 trillion in August 2014.
“Impaired loans increased by 16.36 per cent from N344.26 billion at end-August 2013 to N400.57 billion at end-August 2014, of which 66.84 per cent (N267.74 billion) loans loss provisions had been made.
“However, the NPLs ratio stood at 3.57 per cent at end-August 2014, representing a decrease of 14 basis points compared with the corresponding period of end-August 2013,” she said.
However, she pointed out that Nigerian banks are adequately capitalised with an average Capital Adequacy Ratio (CAR) of 17.75 per cent at the end of August 2014, as against 18.1 per cent at the same period of last year, using the Basel I capital adequacy framework.

 

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