By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)- Nigerian Banks credits granted to the domestic economy rose by 3.95 percent (3.95%) available data from the Central Bank of Nigeria’s (CBN’s) economic report for July 2013 said.
According to the CBN’s report, at N11, 944.23 billion, banks credit to the domestic economy rose by 4% above the level in the month of June.
The breakdown showed that relative to the level at the end of the preceding month, credit to both the private sector and state and local government rose by 0.9% and 9.4%, respectively, which more than offset the 11.1% decline in credit to the Federal Government.
Also, the report said total specified liquid assets of the banks stood at N7, 678.9 billion, representing 49.5% of their total current liabilities. “At that level, the liquidity ratio fell by 6.6% points below the level in the preceding month, but was 19.5% points above the stipulated minimum ratio of 30.0%,†the CBN report said.
The CBN reported for July 2013 that the loans-to-deposit ratio, at 34.1% was 9.8% and 45.9% points below the level at the end of June 2013 and the prescribed maximum ratio of 80.0% respectively.
Similarly, the CBN said available data indicated that total assets and liabilities of the deposit money banks (DMBs) amounted to N22, 723.80 billion, showing an increase of 0.8% above the level at the end of June 2013.
The CBN affirmed that funds were sourced mainly from Federal Government deposit and reduction in claims on central bank and other financial institutions.
“The funds were used, largely, in the extension of credit to the Federal Government and reduction of liabilities on demand, time, savings and foreign currency deposits,†the CBN reported.
In summary, the CBN said banks’ deposit and lending rates trended downward during the review month. The spread between the weighted average term deposit and maximum lending rates narrowed by 1.34% point to 16.89% in July 2013.
Similarly, the margin between the average savings deposit and maximum lending rates narrowed by 1.94% points to 20.60% at the end of the review month.
CBN said the weighted average inter-bank call rate fell to 10.61% from 11.59% in the preceding month, reflecting the liquidity condition in the interbank funds market.
