N8.9tr deposited in 12 months, says CBN
By Patience Ikpeme
According to the Central Bank of Nigeria’s Monetary Policy Committee (MPC), customers have deposited N8.9 trillion in the past year.
This represents a 21.4% increase in total industry deposits, reaching approximately N44 trillion between April 2022 and April 2023.
Additionally, industry credit has increased by N4.54 trillion (17.40% growth), and gross credit has been consistently rising.
Stress tests conducted on the banking industry indicate its ability to withstand significant risks and vulnerabilities.
The gross external reserves stood at US$35.19 billion in April, providing import cover for 6.46 months of goods and services or 8.88 months of goods alone.
Also, the financial soundness indicators reveal a strong and resilient banking system, with the Capital Adequacy Ratio (CAR) at 12.8% (within the prudential requirement of 10%-15%), a decrease in non-performing loans (NPLs) ratio, and an increase in liquidity ratio (LR) above the minimum recommended by prudential requirements.
Return on equity (ROE) and return on assets (ROA) have also shown improvement between March 2023 and April 2023.
As monetary policy tightens to control inflation, sustaining lending to critical sectors of the economy is of utmost importance, according to CBN’s Deputy Governor Financial System Stability (FSS) Mrs. Aisha Ahmad.
Though lending costs have increased and credit growth has slowed, stress test results indicate that the industry’s solvency and liquidity positions are capable of withstanding mild to moderate shocks in the short to medium term.
Edward Lamtek Adamu the CBN’s Deputy Governor Corporate Services acknowledges the unfriendly short-term outlook for inflation and its driving factors.
According to him, in-house estimates suggest that year-on-year inflation may continue to rise, emphasizing the need for a firmer monetary policy stance to achieve flattening and subsequent deceleration.
The uncertainties surrounding fiscal policy, energy prices, and wages for the rest of the year contribute to these concerns.
Adamu highlighted the significance of reducing inflation expectations through effective communication and visible actions from the central bank.
