Total assets of Nigerian banks increased by N11.15 trillion in one year to N64.32 trillion at the end of April. According to data gathered from the Central Bank of Nigeria (CBN), the assets of lending institutions reached N53.17 trillion in 2021. The figures for 2022 indicated a 21% rise over the previous year.
According to a personal statement provided by the CBN of a member of the Monetary Policy Committee, Kingsley Obiora, the rise was driven by balances with CBN/banks, OMO bills, and credit to the real sector of the economy.
“The banking system remained sound, stable, and robust,” he remarked. Total banking assets increased by 20.97% from N53.17 trillion in April 2021 to N64.32 trillion in April 2022. Balances with the CBN/banks, OMO bills, and credit to the real sector of the economy drove the April 2022 increase.
“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 the 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 bank’s total assets.