Bank Customers Deposited N8.9tr New Cash In 12 Months – CBN

Commercial banks’ customers deposited N8.9 trillion new cash in banks’ vaults in the last one year, members of the Central Bank of Nigeria (CBN)-led Monetary Policy Committee (MPC) have said.

MPC member,  Prof. Festus Adenikinju, said  the deposit base represents 21.4 per cent increase to about N44 trillion total industry deposits between April 2022 and April 2023. 

Likewise, industry credit increased by N4.54 trillion or 17.40 per cent while  gross credit has been on an upward trajectory within same periods. 

The stress tests conducted on the industry show that it can weather the major risks and vulnerabilities in the system. 

Adenikinju said the gross external reserves stood at US$35.19 billion within in April 2023, and  could provide 6.46 months cover of import of goods and services or 8.88 months cover of import of goods. 

He said the financial soundness indicators f remain positive and showed that the banking system remains strong, sound, and resilient. 

“The capital adequacy ratio (CAR) stood at 12.8 per cent in April 2023, still within the prudential requirement of between 10 per cent – 15 per cent. Non-performing loans (NPLs) ratio declined from 4.5 per cent in March 2023 to 4.4 per cent in April 2023. Liquidity ratio (LR) rose to 45.3 per cent  in April 2023, from 43.8 per cent in March 2023. This is above the minimum 30 per cent recommended by the prudential requirement,” he stated.

Adenikinju, said both the Return on Equity (ROE) and Returns on Asset (ROA) increased between March 2023 and April 2023. ”ROE rose from 21.6 per cent to 22.6 per cent; while ROA increased from 1.6 per cent to 1.7 per cent between March 2023 and April 2023, respectively,” he said.

CBN Deputy Governor, Mrs. Aisha Ahmad, said sustaining banking sector lending to critical sectors of the economy as monetary policy tightens to contain inflation, therefore, remains paramount. 

She said that given the positive correlation of market lending rates to the Monetary Policy Rate, borrowing costs have risen, while growth in credit has slowed.