The Central Bank of Nigeria (CBN) has restated that the Nigerian banking sector stands strong and resilient as members of the Monetary Policy Committee (MPC) asked for more intervention in the real sector.
According to the personal statements of the MPC members at the last meeting which was released on Friday, showed that all the financial soundness indicators remained very good despite a slight deterioration, in capital adequacy ratio, return on equity and return on assets, relative to the previous MPC meeting.
A member of the committee, Adenikinju Festus, stated that “overall, they showed that the banking sector is strong, resilient and safe. Aggregate credit remains on an upward trajectory rising to N22.2 trillion in July 2021, up from N19.29 trillion in the corresponding period in 2020.
“Aggregate credit by the OFIs also increased relative to the last MPC meeting. Most sectors of the economy, and households, benefitted from the increased credit. The various interventions by the bank are providing a boost to personal consumption and economic growth.”
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Similarly, a Deputy Governor of the CBN, Aishah Ahmad, noted that the banking sector remained sound and resilient. “Capital adequacy stayed strong at 15.2 percent, whilst an increase in credit was sustained with growth of N3 trillion (15.63 percent) year on year with increased credit being channeled to growth-enhancing sectors.
“DMBs’ liquidity profile marginally improved, increasing from 41.3 percent to 41.7 percent, which is above the 30 percent regulatory benchmark, whilst the bank continued to use cash reserve requirement balances to provide liquidity backstops to banks as the need arose. Non-performing loans ratio declined further to 5.4 percent in July 2021 from 5.7 percent in the previous month reflecting strong industry risk management practices.”
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