BY EDMOND ODOK, ABUJA – Over N662.44 billion were accessed by Deposit Money Banks (DMBs) and merchant banks as loans from the Central Bank of Nigeria (CBN) to control their liquidity and maintain stability in the nation’s financial system as at November 2019.
This is even as the apex bank disclosed that estimated federally collected gross revenue for November 2019, totalling at N858.92 billion, was below both the monthly budget estimate of N1,246.07 billion and previous month’s receipt of N894.09 billion by 31.1 per cent and 3.9 per cent, respectively.
The CBN blamed the income drop in relations to the monthly budget estimate and October revenue generation on the shortfall in both oil and non-oil revenues during the period.
According to information contained in CBN’s Economic report for November 2019, the loans available to the Banks came through the Standing Lending Facilities (SLF) and were packaged to enable the lenders raise and enhance their financial standings within the banking sector.
The SLF represents an overnight CBN credit available on banking days between 2 pm and 3.30 pm, with settlement done on same day value. Funds are mostly sourced from savings, timed and foreign currency deposits, as well as accretion to unclassified assets.
The CBN’s Economic report explained that daily average stood at N41.40 billion between November 1 and 26 while daily request also ranged from N0.48 billion to N126.74 billion with N0.37 billion earned as total interest.
It also showed that the funds were used, largely, to extend credit to the private sector and payment of claims on demand deposit. Interestingly, the rates for Standing Deposit Facilities (SDF) and SLF remained at nine and 16 per cent, respectively.
The apex bank stated that total SLF granted during the period under review stood at N662.44 billion, comprising N490.29 billion direct SLF and N172.15 billion Intra-day Lending Facilities (ILF), converted to overnight repurchase agreement.
It further stated that the trend at the CBN standing facilities window indicated a drop at the SLF window, compared to increased patronage at the SDF window. This is as applicable rates for the SLF and SDF stayed firm at 15.50 and 8.50 per cent respectively.
Also, the report captured N443.63 billion as total SDF granted during the period with a daily average of N26.09 billion during the transaction days. Additionally, daily request ranged from N6.30 billion to N42.75 billion while cost incurred on SDF was N0.16 billion.
Similarly, the reports indicated that commercial banks’ credit to the domestic economy went up by 0.6 per cent to N22,261.0 billion by October 2019 as against the level recorded during the preceding month ending. It attributed the encouraging development to the rise in its claims on the private sector.
It also indicated that total specified liquid assets of banks stood at N14.2 trillion by October ending, representing about 59.3 per cent of their total current liabilities. At that level, the liquidity ratio was 0.9 percentage point lower than the level at the end of the preceding month, and was 29.30 percentage points above the stipulated minimum liquidity ratio of 30 per cent.
Furthermore, oil receipts, at N489.08 billion or 56.9 per cent of total revenue fell below both the monthly budget of N798.83 billion and the previous month’s receipt of N577.30 by 38.8 per cent and 15.3 per cent, respectively.
The oil revenue drop compared to the monthly budget estimate, was attributed to shut-ins and shut-downs at some Nigeria National Petroleum Corporation terminals, due to pipeline leakages and maintenance
The report indicated total assets and liabilities of commercial banks stood at N41,425.1 billion by October ending, indicating 4.6 per cent increase, as against the level achieve during the preceding month end.
It was also noted in the reports that funds were mostly sourced from increase in unclassified liabilities, and the mobilisation of time, savings and foreign currency deposits. These were mainly used to acquire unclassified assets, foreign assets and to boost reserves.
The CBN report also indicated that the loan-to-deposit ratio, at 61.9 per cent, was 0.3 percentage point below the level at the end of the preceding month. The amount was lower than the maximum ratio of 80.0 per cent by 18.10 percentage points.