DMBs’ assets, liabilities hit N29tr

Discount houses grow by 40 per cent

The nation’s Deposit Money Banks (DMBs) grew their assets and liabilities to the tune of N28.96 trillion in the month of April 2015, representing an increase of 0.9 per cent over the level at the end of March 2015.

At the same period, growth in total assets and liabilities of the discount houses stood at N153.3 billion- an increase of 40.1 per cent above the level at end of March 2015.

For the DMBs, funds were sourced mainly from increased claims on the central government- time, savings and foreign currency deposits as well as central government deposits.

According the Central Bank of Nigeria, in it Economic Report for April, the funds were used, largely, for accretion to reserves, acquisition of unclassified assets and reduction in foreign liabilities.

However, at N16.8 trillion, representing 58 per cent of the industry’s assets and liabilities, banks’ credit to the domestic economy declined by 2.6 per cent below the level in the preceding month.

The development was attributed to the fall in claims on the federal government and the private sector during the review month.

It also showed that banks applied its prudential rules strictly, especially with the alarm over rising non-performing loans, resulting to reduced loan to businesses during the period under review.

Total specified liquid assets of the commercial banks stood at N6.3 trillion, representing 34.8 per cent of their total current liabilities.

The liquidity ratio, which measures banks’ ability to meet immediate or short term obligations, fell by 0.3 percentage point below the level in the preceding month, but 4.8 percentage points above the regulatory level of 30 per cent.

Also, the loans-to-deposit ratio, which measures the banks’ ability to meet withdrawal needs by customer with deposit, at 64.9 per cent, was 1.2 percentage points below the levels at the end of March and 15.1 percentage points below the prescribed maximum ratio of 80 per cent.

The development, beside showing that the banks were holding idle funds resulting from low credit to the economy, they were also ready to meet withdrawal needs of customers with deposits from the same customers during the period.

Meanwhile, the report showed that the increase in discount houses’ assets and liabilities resulted largely from the 242.3 per cent rise in claims on state government and 875.4 per cent from other investments.

Discount houses’ investment in Federal Government’s securities stood at N41.64 billion, accounting for 40 per cent of their total deposit liabilities.

This means that the investment in Federal Government’s securities was 20 percentage points below the prescribed minimum level- 60 per cent.

At the investment level, their stake on Nigerian Treasury Bills fell by 17.5 per cent below the level at the end of March.

The total borrowing and amount owed by the discount houses was N52.3 billion, while their capital and reserves amounted to N33.91 billion.

During the review period, the value of Bankers Acceptance (BA) fell by 39.5 per cent to N12.58 billion, compared with N20.78 billion in March and attributed to the decline in investment in BA by DMBs during the review month.