Banks’ Total Assets, Liabilities Hit N17.514 Trillion

Leadership (Abuja)

Amaka Ifeakandu

18 July 2011

The total assets/liabilities of deposit money banks (DMBs) rose to N17.514 trillion at the end of February this year.

The Central Bank of Nigeria (CBN) monthly report for the month of February indicated an increase of 1.5 per cent over the level at the end of January 2011.

The CBN report says that the funds sourced mainly from time savings and foreign currency deposit mobilisation and claims on central government were used largely to increase reserves.

The report further states that DMBs’ credit to the domestic economy fell by 2.7 per cent from the level in the preceding month to N10.677 trillion within the period under review.

The breakdown showed that credit to government declined by 5.1 per cent, while credit to the core private sector fell by 1.5 per cent from the level in January 2011.

However the CBN’s credit to the DMBs rose by 1.0 per cent to N427.0 billion at the end of February 2011, while specified liquid assets of the DMBs stood at N2.962 trillion, representing 26.1 per cent of their total current liabilities.

This level of liquid assets, the report says, was 2.6 percentage points below the preceding month’s ratio and 1.1 percentage point above the stipulated minimum ratio of 25.0 per cent for fiscal 2011.

It further states that the loan-to-deposit ratio was 55.5 per cent and was 24.5 percentage points below the stipulated maximum target of 80.0 per cent.

On the other hand, the total assets/liabilities of the discount houses stood at N255.6 billion within the reviewed period, showing a decline of 7.3 per cent from the level at the end of January 2011.

The decline in assets, according to the report, was accounted for largely by the 23.8 per cent fall in claims on the federal government.

Correspondingly, the decline in total liabilities was attributed largely to the 16.8 per cent decline in money-at-call.

Discount houses’ investment in federal government securities of less than 91-day maturity fell to N14.5 billion and accounted for 8.6 per cent of their total deposit liabilities.

It was, however, 51.4 percentage points below the prescribed minimum level of 60.0 per cent for fiscal 2011. At that level, discount houses’ investment declined by 65.7 per cent from the level at the end of the preceding month. Total borrowing by the discount houses was N39.9 billion, while their capital and reserves amounted to N46.0 billion. This resulted in a gearing ratio of 0.9:1, compared with the stipulated maximum target of 50:1 for fiscal 2011.

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