Banking system’s credit to the private sector surged by 13.5 per cent at N21.425trillion in the second quarter of 2016, compared to the previous quarter.
The Central Bank of Nigeria, CBN, disclosed this in its second quarter 2016 economic report. The development was as a result of the growth in claims on the core private sector.
Over the level at end December 2015, banking system’s credit to the private sector grew by 14.5 per cent, compared with the growth of 0.9 per cent and 4.3 per cent recorded at the end of the preceding quarter and the corresponding period of 2015, respectively
Also, at N24.318 trillion, aggregate domestic credit (net) to the economy, on quarter-on-quarter basis, grew by 7.3 per cent, compared with the growth of 4.9 per cent and 3.8 per cent at the end of the preceding quarter and the corresponding quarter of 2015, respectively.
The development, relative to the preceding quarter was attributed to the 13.5 per cent growth in claims on the private sector. Over the level at end of December 2015, net domestic credit rose by 12.5 per cent, compared with the growth of 4.9 per cent at the end of the preceding quarter. The development reflected the growth in claims on the private sector.
Similarly, the report showed that banking system’s credit (net) to the federal government fell by 23.5 per cent to N2.893 trillion, in contrast to the growth of 30.7 and 26.5 per cent at the end of the preceding quarter and the corresponding quarter of 2015, respectively. The development was due to the fall in banks’ holding of government securities.
Relative to the level at the end of the preceding quarter, foreign assets (net) of the banking system, rose by 2.8 per cent to N7.105 trillion at end-June 2016, in contrast to the decline of 1.8 per cent at the end of the preceding quarter. Furthermore, the development was attributed, largely, to the increase in foreign asset holdings of the banks, following the adoption of a flexible exchange rate regime.
Total deposits at the CBN amounted to N10.502 trillion, indicating an increase of 8.1 per cent relative to the level at the end of the preceding quarter.
The development reflected the significant increase in federal government deposits.
Of the total deposits at CBN, the shares of the federal government, banks and ‘Others’ were N5.021 trillion (47.8 per cent), N3,687 trillion (35.1per cent) and N1.794.trillion (17.1 per cent), respectively.
Reserve money (RM) fell by 6.4 per cent to N5.372 trillion at the end of the second quarter, reflecting the decline in both banks’ reserves with the CBN and currency in circulation.
