The apex bank disclosed that the funds were sourced mainly from the mobilisation of deposits.
The figure was contained in the Economic Report for the Month of May obtained from CBN’s website at the weekend.
According to the report, the funds were used largely in the extension of credit to the private sector and for reduction of their liabilities on time, savings and foreign currency deposits.
This is different from what was obtained in April when funds were sourced mainly from the disposal of unclassified assets, accretion to capital account and increased mobilisation of time, savings and foreign currency deposits.
The funds sourced in April were used largely in the extension of credits to the Federal Government and the private sector as well as in acquisition of foreign assets.
Also in May, deposit money banks’ credit to domestic economy fell by 0.2 percent totaling N14, 113.0 billion, as against N14, 148.24 billion recorded in April.
The breakdown of the figures for the month of May showed that relative to the level at the end of the preceding month, credit to the Federal Government fell by 6.4 percent while that of private sector rose by 1.8 percent.
Total specified liquid assets of the DMBs stood at N6, 662.9 billion representing 43.8 percent of their total current liabilities.
At that level, the liquidity ratio fell by 5.4 percentage points below the level in the preceding month, but was 30.0 percentage points above the stipulated minimum ratio of 30.0 percent.
In April, total specified liquid assets of the DMBs stood at N6, 783.7 billion representing 44.5 percent of their total current liabilities.
The loans-to -deposit ratio, at 40.8 per cent in May, was 1.7 percentage points above the level at the end of the preceding month, but 39.2 percentage points below the prescribed maximum ratio of 80.0 percent.
The downward trend in bank’s liquidity position also took its toll on banking system’s credit (net) to the Federal Government, on month-on-month basis, in the month of May.
According to the Economic Report, it declined by 13.4 percent to negative N1, 703.8 billion in contrast to the increase of 19.6 percent at the end of the preceding month.
This, however, showed a decline of 55.5 percent when compared with the level at the end of the corresponding month of 2012.
“Over the level at end-December 2012, banking system credit (net) to the Federal Government rose by 19.1 percent, reflecting largely the increase in banking system’s holding of government securities.
However, the private sector appeared to have benefitted more from banks as banking system’s credit to the private sector, on month-on-month basis, grew by 0.5 percent to N15, 492.0 billion, compared with the respective increase of 1.0 and 2.0 percent at the end of the preceding month and the corresponding period of 2012.
The report said: “Relative to the level at end-December 2012, banking system’s credit to the private sector rose by 2.4 percent, compared with the 1.8 and 2.0 percent increase at the end of the preceding month and the corresponding period of 2012 respectively.
“At N9, 406.9 billion, foreign assets (net) of the banking system fell by 1.6 percent, on month-on-month basis, at end-May 2013, compared with the decline of 1.3 percent at the end of the preceding month, but contrasted with the growth of 3.8 percent recorded at the end of the corresponding month in foreign assets holdings of commercial banks.”
Meanwhile, total deposits at the CBN for the month of May amounted to N5, 971.2 billion, indicating a decline of 2.4 percent below the level at the end of the preceding month.
The development, according to the apex bank, reflected largely the decline in private sector and Federal Government’s deposits, which more than offset the rise in DMBs deposits.
Of the total deposits, the percentage shares of the Federal Government, banks and private sector were 59.4, 33.1, and 7.5 percent respectively compared with 58.7, 32.1 and 9.2 percent at end-April 2013.
The report also showed that Reserve Money (RM) fell by 0.1 percent to N3, 432.1billion at the end of the review month, reflecting the trend in its currency component.
Where Are the Oil Thieves?
Last week, the Federal Government confirmed the rumour that some indigenous staff of international oil companies in Nigeria (IOCs) and some oil-bearing communities were behind the spate of oil theft that is threatening Nigeria’s economy. Unfortunately, the Special Adviser to the President on Niger Delta Affairs, Kingsley Kuku, who pointed accusing fingers at the saboteurs failed to tell Nigerians how many of these criminals have been arrested and tried. And a popular Yoruba proverb had it that an enemy whose identity has been revealed by God can no longer harm us.
Beyond the unmasking of crude oil thieves, the Federal Government should not only arrest and prosecute the saboteurs but also proceeds of the illegal activities should also be confiscated. It is only when they lose both ways that those potential pipeline vandals would attach much seriousness to government’s threat to fight the crime.
Another Chance for Enterprise Bank’s Shareholders
The readiness of the Asset Management Corporation (AMCON) to sell Enterprise Bank Limited, one of the three bridged banks, has again provided Nigerian shareholders another opportunity to buy back the bank, which emerged from the ruins of the defunct Spring Bank Plc. With the choice of Citigroup and Vetiva Capital to manage the sale of the bank last week, I believe some of the former shareholders of the legacy Spring Bank can muster resources to bid for the bank, which they alleged was taken away from them along with the defunct Afribank and Bank PHB in 2011 when they were bridged.
The sale of Enterprise Bank will, no doubt, provide the template for the sale of other two banks (Keystone and Mainstreet). Nigerian shareholders should brace up for the transfer of ownership of these banks. You can only make hay while the sun shines.
Hawkers and New Naira Notes
CBN Governor Sanusi Lamido Sanusi last week reopened the debate on the need to redesign the naira. He said the plan, which was truncated by the National Assembly last year, is an antidote against currency counterfeiting in Nigeria. Why I don’t have anything against redesigning the naira, what I find difficult to fathom is why the new naira notes are easily available for exchange by naira hawkers at major bus stops across the country whereas most of the cash released to customers by banks are dirty and torn notes. Some unscrupulous banks officials are said to be behind the syndicate but the CBN and the law enforcement agents seem helpless or are just indifferent to this.
Sanusi should rather address this trend and leave the issue of naira redesign to whoever takes over from him next year since he has said he is not interested in seeking a second term in office.
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