Nigerian bank deposits increased by N6.92 trillion from N36.13 trillion at the end of October 2021 to N43.05 trillion in the corresponding period of 2022.
This was contained in the personal statements of the members of the Monetary Policy Committee of the Central Bank of Nigeria.
Financial System Stability Directorate CBN Deputy Governor Aishah Ahmad said, “Notably, total assets increased to N69.67 trillion in October 2022 from N57.3 trillion in October 2021, while total deposits increased to N43.05 trillion from N36.13 trillion in Oct 2021. the same period. Total credit also increased by N5.32 trillion to N28.81 trillion between the end of October 2021 and the end of October 2022 with significant growth in credit to the manufacturing, general trading and oil and gas sectors.
“Continued credit expansion, particularly to sectors that improve production, is expected to further support economic activities. However, sustained regulatory vigilance is required to mitigate any possible crystallization of credit risk in the financial system in light of persistent macroeconomic risks.
“As anticipated, average lending rates increased between June and October 2022, partly driven by the MPC’s tight monetary policy stance, which requires vigilance by banks to prevent defaults and preserve asset quality.” .
He said sustained implementation of the GSI policy and effective credit risk management policies by banks were helpful in that regard, while recent central bank initiatives such as the naira redesign were expected to improve transmission. of monetary policy through the banking system.
Despite the solid fundamentals of the financial system and the satisfactory results of the stress tests, he said, the Bank must remain vigilant and proactively manage operational risks, asset quality and other risks to the stability of the financial system, especially with the challenging global economic environment.
Furthermore, a member of the MPC, Shonubi Folashodun, said that the banking system had remained resilient so far in 2022, even as it continued to deal with the effects of a challenging macroeconomic environment on businesses.
It said: “The industry non-performing loan ratio was 4.8% in October 2022 below the 5.0% threshold, while the industry liquidity ratio was 40.1%, above the 5.0% threshold. minimum level of 30.0%. He highlights the sustained growth of the industry’s total deposits, loans and assets, reflecting the positive impact of various Bank measures.
“Industry capital adequacy, while below 13.4 percent, was above the prudential minimum of 10.0 percent. However, the significant increase in domestic claims on the private sector and the government has pushed the annualized growth of the main monetary aggregates slightly above the benchmark for fiscal year 2022, highlighting the monetary aspect of the pressure drivers inflationary”.
A member of the MPC, Robert Asogwa, said that the national financial sector was still resilient in November, except for the volatilities observed in the stock market.
He said: “Banking sector indicators are strong, similar to the position at the last MPC meeting, with the NPL rate further declining from 4.9% to 4.8% in October 2022 and with further increases in the total assets.
“Of particular interest is the addition of more than N1tn in total industry deposits between September and October 2022.
“A marginal concern is the steady decline in banks’ capital adequacy ratio between June and October 2022, but this is attributed to increases in total risk-weighted assets, which for some time has been higher than capital totally qualified”.