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Published On: Sun, May 4th, 2014

DMB total assets, liabilities depreciate by 0.5%

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Total assets and liabilities of the deposit money banks (DMBs) has recorded N24.2 trillion at the end of February, 2014, showing a decline of 0.5 per cent below the level at the end of the preceding month.

The Central Bank of Nigeria economic report for the month made available at its website weekend indicated that funds were sourced mainly from reduction in unclassified assets, claims on the central government; and claims on the Central Bank. The funds were used, largely, to build-up of reserves and extend credit to the private sector.

At N12.3 trillion, bank’s credit to the domestic economy rose by 2.2 per cent above the level in the preceding month. The development was attributed to the 2.6 per cent increase in banks’ credit to the private sector, which more than offset the 4.9 per cent fall in banks’ credit to the Federal Government during the review month.

The report went further to state that specified liquid assets of the DMBs stood at N5.9 trillion .At that level, the liquidity ratio fell by 1.1 percentage point below the level in the preceding month and was 15.0 percentage points above the stipulated minimum ratio of 30.0 per cent. The loans-to-deposit ratio, at 55.5 per cent, was 2.0 percentage points above the level at the end of the preceding month, but was 24.5 percentage points below the prescribed maximum ratio of 80.0 per cent.2.5 Discount Houses’ Activities

Provisional data indicated that total assets and liabilities of the discount houses stood at N177.9 billion within the period showing an increase of 48.7 per cent above the level at end-January 2014. The development was accounted for, largely, by the 59.6 and 67.4 per cent rise in cash and balances with banks and claims on the Federal Government, respectively.

Correspondingly, the increase in total liabilities was attributed, largely, to the 116.2 per cent growth in money-at-call.

Discount houses’ investment in Federal Government securities of less than 91-day maturity rose to N86.35 billion and accounted for 60.2 per cent of their total deposit liabilities. Thus, investment in Federal Government Securities was 0.2 percentage point above the prescribed minimum level of 60.0 per cent.

At that level, discount houses’ investment on NTBs rose by 134.5 per cent above the level at the end of the preceding month. Total borrowing by the discount houses was N42.4 billion, while their capital and reserves amounted to N23.0 billion. This resulted in a gearing ratio of 1.8:1, compared with the stipulated maximum target of 50:1 for fiscal 2014.

At N7.5 trillion foreign assets (net) of the banking system fell by 8.3 per cent at end-February 2014, compared with the decline of 3.2 per cent at the end of the preceding month. The development was attributed to the respective decline of 6.2 and 16.1 per cent in net foreign asset of both the CBN and the banks. Relative to the level at end-December 2013, NFA declined by 11.2 per cent at end-February 2014, reflecting the fall of 12.0 and 8.0 per cent in the foreign asset holdings of the CBN and banks, respectively.

Other assets (net) of the banking system, on a month-on-month basis, increased by 6.1 per cent to negative N7.4 trillion, as against the decline of 0.01 per cent at the end of the preceding month. The development reflected, largely, the increase in unclassified assets of both the CBN and the DMBs. Relative to its level at the end of December 2013, other assets (net) increased by 6.0 per cent

 

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