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Discount Houses’ assets hit N155.3billion

By on December 26, 2014

The total assets and liabilities of discount houses in the country stood at N155.3 billion at the end of the third quarter of 2014, a report has shown.

This, indicated a decline of 10.3 per cent, below the level in the preceding quarter, but showed an increase of 16.1 per cent above the level at the end of the corresponding quarter of 2013.
The Central Bank of Nigeria (CBN) stated this in its economic report for the third quarter of 2014 posted on its website.

The decline in assets relative to the preceding quarter was largely as a result of the fall in claims on others and cash and balances with banks, which more than offset the effect of the increase in claims on other assets and claims on state governments.

Correspondingly, the decline in total liabilities was attributed to the fall in all the components of total liabilities, except money at call which increased by 19.3 per cent above the level in the preceding quarter, the CBN explained.

Furthermore, the report stated that discount houses’ investment in federal government securities of less than 91-day maturity fell by 17.6 per cent to N52.6 billion, and represented 44.8 per cent of their total deposit liabilities.

At this level, discount houses’ investment was 15.2 per cent points below the prescribed minimum level of 60 per cent for fiscal year 2014.

Total borrowing by the discount houses was put at N45.8 billion, while their capital and reserves stood at N29.9 billion. This, according to the central bank, resulted in a gearing ratio of 1.5:1, compared with the stipulated maximum of 50:1 for the fiscal year

Also, available data indicated that the total assets and liabilities of commercial banks stood at N25.947 trillion at the end of the third quarter of 2014, representing an increase of 3.4 per cent over the level at the end of the preceding quarter.

“Funds were sourced largely from increased mobilisation of time, savings and foreign currency deposits; foreign liabilities; and demand deposits were used mainly, for the extension of credit to the private sector, central government and acquisition of foreign assets.

“At N13, 876.9 billion, banks’ credit to the domestic economy, rose by five per cent compared with the level in the preceding quarter. The development was attributed to the 6.2 and 3.6 per cent increase in claims on the private sector and federal government, respectively, in the review period.

 

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