Bank Assets Rise By 21% To N64.32trn

Nigerian banks’ total assets rose by N11.15tn in one year to N64.32tn as of the end of April.

Figures obtained from the Central Bank of Nigeria revealed that the assets of the lending institutions had hit N53.17tn in the corresponding period of 2021. The 2022 numbers showed a 21 per cent increase over the period.

According to a personal statement of a member of the Monetary Policy Committee, Kingsley Obiora, which was released by the CBN, the growth was driven by balances with CBN/banks, OMO bills, and credit to the real sector of the economy.

He said, “The banking system remained sound, stable and resilient. Total assets of the banking industry grew by 20.97 per cent from N53.17tn in April 2021 to N64.32tn 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 N26.10tn in April 2022 from N21.45tn in April 2021, representing an increase of 21.66 per cent.”

He said some sectors with the increased credit included: manufacturing, consumer credit, general commerce, information and communication, and agriculture.

According to the CBN, the non-performing loans ratio stood at 5.31 per cent at the end of April 2022, slightly above the prudential threshold of 5.00 per cent.

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.

In the interbank market, it stated, the Open Buy Back rate trended upward from 6.62 per cent in March to 7.49 per cent in April 2022, indicating a tight banking liquidity condition, which helped to rein in inflationary pressures and safeguard a stable banking system.

Another member of the MPC, Adeola Adenikinju, said measures of industry aggregates like total assets, total deposits and total credits also maintained upward trajectories in the period.

He said industry credit increased by N4.65tn between April 2021 and April 2022.

This growth, he said, could be attributed primarily to the increased funding base of the industry and the CBN’s Loan to Deposit Ratio policy.

According to him, all sectors of the economy had benefitted from the increased lending with the top three being oil and gas, manufacturing and general sectors.

Commenting on the development, the Managing Director/Chief Executive Officer, Cowry Asset Management Limited, Mr Johnson Chukwu, attributed the development to two growth factors.

He said, “One is the increase in money in circulation, and that increase is coming about because the Federal Government is borrowing by way and means and that is injecting liquidity into the economy and it will tremendously contribute to the level of currency in circulation, and ultimately the banking assets side.

“This is because given the level of financial inclusion, given that people hardly keep money at home, any significant increase in money in circulation will have an impact on the banks’ total assets.

“Secondly, the banks have actually seen a significant increase in loans. Loan creation also means money creation.”