Banks’ Assets Increases 22% To N65tn

Aishah Ahmad, Deputy Governor of the Financial Systems Stability Directorate, in a statement at the Monetary Policy Committee meeting, revealed that at the end of June 2022, the total assets of the banking sector in Nigeria increased by N11.8 billion, or 22%, to reach N65.48 trillion.

“Key industry aggregates also continued their year-on-year upward trajectory with total assets rising to N65.48tn in June 2022 from N53.64tn in June 2021,” she said.

According to her, gross credit has been growing steadily since 2019, reaching N5.02 trillion between June 2021 and June 2022, with notable increases in credit to the manufacturing, general commerce, and oil & gas sectors.
said, “Stress test results also demonstrated banks’ resilience to possibly severe macroeconomic shocks in terms of solvency and liquidity ratios.”

She added that “Furthermore, results of stress tests showed the resilience of banks’ solvency and liquidity ratios in response to potential severe macroeconomic shocks.

“However, the bank must remain vigilant to proactively manage probable macro risks to the financial system such as lingering spillover effects of the pandemic, winding down industry forbearance portfolio, and other risks to financial stability such as exchange rate, operational and cyber security risks.”

A member of the MPC, Kingsley Obiora, said the financial soundness indicators showed that the banking system remained sound, stable and resilient.

He said the growth was “driven by balances with CBN/banks, OMO bills and credit to the real sector of the economy.”

He continued, “Consequently, the total flow of credit to the economy increased by 22.78 per cent or N5.02tn from N22.04tn in June 2021 to N27.06tn in June 2022 to various sectors of the economy, including oil and gas, manufacturing, general, governments and general commerce.

“The industry Non-Performing Loans ratio was 4.95 per cent at the end of June 2022 compared with 5.70 per cent at the end of June 2021, which was below the prudential maximum of 5.0 per cent.”

He added that the monthly average Open Buy Back and Inter-Bank rates fluctuated within the asymmetric corridor and increased from 9.39 and 8.38 per cent in May to 10.89 and 11.10 per cent in June 2022.

The increase, he said, reflected a tight banking liquidity condition, which could help rein in inflation and safeguard financial system stability.