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Credit to private sector rises to N18.639tn

By on April 23, 2015

Banking sector credit to the private sector increased year-on-year by 2.5 per cent or N461 billion to N18.638 trillion at the end of February 2015, compared with the N18.178 trillion it stood at the end of January 2015.
The Central Bank of Nigeria (CBN) disclosed this in its money and credit statistics for February 2015.
But the central bank data 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 N16.811 trillion as at January, to N16.546 trillion at the end of February. 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 N6.047 trillion in the review month, as against the N6.373 trillion recorded the previous month.
Also, currency outside banks dropped from N1.320 trillion in January, to N1.233 trillion as at the end of February.
However, currency-in-circulation dropped marginally to N1.623 trillion at the end of February, compared to the N1.662 trillion it was the previous month.
The central bank data showed that the total amount of banks’ reserves with the central bank increased to N4.079 trillion in the month under review, from N3.814 trillion it stood at the end of January.
But demand deposits, which are funds held in an account from which deposited funds can be withdrawn at any time without any advance notice to the depository institution fell marginally from N5.053 trillion in January,  to N4.813 trillion in the month under review.
Also, quasi money, which is made up of highly liquid assets that can easily be converted to cash increased slightly to N10.499 trillion in February, from N10.499 trillion the previous month, just as Net Foreign Assets reduced to N6.023 trillion, from to N6.436 trillion. Net Domestic Assets however climbed to N10.523 trillion, from N10.375 trillion the previous month.
In an effort to forestall another build up of non-performing loans (NPLs) in the banking industry, the CBN and deposit money banks (DMBs) in the country recently disclosed plans to publish the names of new bank debtors.
In addition, the central bank said it might be compelled to stop such loan defaulters from accessing foreign exchange through the interbank Foreign Exchange market.
Director, Banking Supervision, CBN, Mrs. Tokunbo Martins had said the names of those she described as “chronic debtors” would be published alongside the companies they represent, their directors, subsidiaries and other associates. Martins who declined to give a specific date or period when the names would be published as well as the total amount owed by the debtors, said banks are currently compiling the names.

She had said that the decision was aimed at preventing another banking crisis.
The central bank director explained: “The CBN has managed to keep the banking industry safe and sound in collaboration with all members of the Bankers’ Committee.
“But some data shows that it is increasingly becoming difficult for some debtors to pay up their loans. So it was decided that going forward, one thing that we may do is to stop them from getting access to foreign exchange.
“It is not all debtors, it is the bad and chronic debtors, those ones that have deliberately refused to pay, those are the ones we are talking about.”
Martins, who put the current banking industry’s NPLs at 3.3 per cent, maintained that the central bank wants to ensure that the figure does not exceed the five per cent limit.

 

[ThisDay]