Bank assets grow by N11.15tr in one year
By Jeph Ajobaju, Chief Copy Editor
Banks grew their total assets by N11.15 trillion from N53.17 trillion in April 2021 to N64.32 trillion in April 2022, a rise of 20.97 per cent, as gleaned from the latest data supplied by the Central Bank of Nigeria (CBN).
CBN Deputy Director Kingsley Obiora gave the figures as a member of the Monetary Policy Committee (MPC).
Non-Performing Loans (NPLs) ratio stood at 5.31 per cent in April 2022, above the prudential threshold of 5.00 per cent.
“The banking system remained sound, stable and resilient. Total assets of the banking industry grew by 20.97% from N53.17 trillion in April 2021 to N64.32 trillion in April 2022, driven by balances with CBN/banks, OMO bills, and credit to the real sector of the economy.
“As a result, the total flow of credit to the economy increased to N26.10 trillion in April 2022 from N21.45 trillion in April 2021, representing an increase of 21.66%,” Obiora explained in a statement.
“The Non-Performing Loans (NPLs) ratio stood at 5.31% at the end of April 2022, slightly above the prudential threshold of 5.00%.
“It was, however, an improvement from 5.89 per cent at the end of April 2021, reflecting recoveries, restructuring of facilities and sound management practices by Other Depository Corporations (ODCs).
“In the interbank market, the Open Buy Back (OBB) rate trended upward from 6.62% in March to 7.49 per cent in April 2022, indicating a tight banking liquidity condition, which helps rein in inflationary pressures and safeguard a stable banking system.”
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World Bank warns against CBN loans
The World Bank has warned that low-interest loans of the CBN undermine banks that lend on a risk-adjusted pricing basis.
CBN intervention loans attract 5 per cent interest rate per year, which is like subsidy as the interest rate would normally be 9 per cent – that is even less than the rate charged by banks, per reporting by Nairametrics.
Obiora spoke on the heels of the decision of the MPC to raise benchmark monetary policy interest rates from 11.5 per cent to 13 per cent – an increase that normally leads to a rise in lending rates across the board.
The CBN keeps intervention fund interest rates at 5 per cent to encourage economic growth in key sectors it funds while allowing rate increases in other sectors.
