CBN Reports The Banking System Remained Resilient

CBN Revokes Licenses Of 132 Microfinance Banks, Others

According to a report provided by the Central Bank of Nigeria (CBN), the Nigerian banking system remained resilient in February.

Festus Adenikinju, a member of the Monetary Policy Committee (MPC), said this at the MPC’s most recent meeting, according to the CBN.

“The study on banking system stability demonstrated that the banking system is robust, stable, and resilient,” he stated. All financial system stability metrics, such as the Capital Adequacy Ratio, non-performing loans ratio, liquidity ratio, returns on assets, and returns on equity, are within prudential guidelines.

“Moreover, measures of bank size, gross assets, gross deposits, and gross credit continued their upward trajectories. There is rising costs of credit as interest bands narrowed. The Other Financial Institutions continue to provide a significant amount of credit to households and small enterprises in the economy.”

According to the report, the monetary base grew by 0.20 per cent by end-February 2022. Monetary base stood at N13.64tn at end of February, but 9.66 per cent below the 2022 provisional benchmark of N15.09tn.

Net claims on government grew by 11.92 per cent at end-February 2022. The M3 growth in February was 2.12 per cent while annualised 12.72 per cent was below the 2022 benchmarks of 15.21 per cent, it said.

It stated that, “Domestic claims rose by 6.82 per cent in February or annualised 40.92 per cent against the provisional benchmark of 16.23 per cent.

“Claims of other sectors annualised 29.28 per cent against 18.05 per cent benchmark, and on the central government by annualised 71.52 per cent as against 11.42 per cent.

“The OBB rate rose from 6.10 per cent on 22-February to 11.49 per cent on 18 March 2022, reflecting tight liquidity in the banking system.”

The report said trade balance and current account balance also showed improvements following the sustained rise in commodity prices, particularly crude oil, in the international market.

Government fiscal operation showed that fiscal deficit stood at N7.6tn from January to December 2021. The deficit was higher than FGN’s retained revenue which stood at N4.8tn.

The deficit was 57.3 per cent above budget. Government expenditure rose from N951.14bn in January 2022 to N952.6bn in February 2022.

However, it added, FG retained revenue declined from N405.51bn to N371.67bn over the same period, leading to an increase in the budget deficit and public debt. The decline in revenue was attributed to decline in collections from PPT& Royalties and corporate taxes.