Banks’ credit to domestic economy drops by 0.3% to N20bn

Data released by the Central Bank of Nigeria (CBN) showed that at N20,695.6 billion, aggregate banking system credit (net) to the domestic economy at end-April 2015 fell by 0.3 per cent, on month-on-month basis, in contrast to the growth of 0.5 per cent at the end of the preceding month.
According to the Economy Report for April made available by the apex bank, the development reflected, largely, the decline in  (net) claims on the Federal Government.
CBN explained that relative to the level at end-December 2014, aggregate banking system credit (net) to the domestic economy, grew by 9.7 per cent, compared with the growth of 10.0 per cent at end-March 2015.
It, however, showed that banking system’s   credit (net) to the Federal Government, on month-on-month basis, fell by 3.6 per cent to N2,100.3 billion at end-April 2015, in contrast to the 12.5 per cent increase at the end of the preceding month.
According CBN, the development reflected the decline in banking system’s holdings of government securities.
Over   the   level   at   end-December   2014, aggregate banking system credit (net) to the Federal Government grew by 177.3 per cent, compared with the growth of 187.6 per cent at end-March 2015.
At N18,595.2 billion, banking system’s credit to the private sector, on month-on-month basis, increased by 0.1 per cent in contrast to the decline of 0.7 per cent at the end of the preceding month.
The development relative to the preceding month reflected, wholly, the 0.1 per cent rise in claims on the core private sector.

Also, the report stated that over the level at end-December 2014, banking system’s   credit to the private sector grew by 2.7 per cent.

“At N6,017.1 billion, foreign assets (net) of  the banking system, on-month-on-month basis, increased by 0.5 per cent at end-April 2015, compared with the increase of 2.5 and 1.9 per cent at the end of the preceding month and the corresponding period of  2014  respectively,” the report stated.

The development was attributed to the 17.2 per cent increase in the foreign asset (net) holdings of the deposit money banks  (DMBs).

“Over the level at end-December 2014, net foreign asset (NFA) declined by 15.2 per cent at end-April 2015, compared with the decline of 15.7 per cent at the end of the preceding month,” CBN said.

Meanwhile, the report disclosed that at N1,692.3 billion, currency in circulation declined by 6.9 per cent in the review month, in contrast to the increase of 12.1 per cent at the end of the preceding month.

The development, according to CBN, reflected the 10.8 and 9.5 per cent decline in its currency outside bank and vault cash components, respectively.

It further stated that total deposits at the CBN amounted to N7,196.4 billion, indicating an increase of 4.8 per cent above the level at the end of the preceding month. The development reflected the increase of 9.5 and 20.6 per cent in DMBs and private  sector deposits, which more than offset the 3.5 per cent decrease in Federal Government deposit.

However, other assets (net) of the banking system, on a month-on-month basis, increased by 2.1 per cent to negative N7,445.1 billion, compared with the increase of 0.2 per cent recorded at the end of the preceding month.

The development reflected the rise in unclassified assets of CBN and commercial banks in the review period.

“Over the level at end-December 2014, other assets (net) of the banking system declined by 5.7 per cent at end-April 2015, compared with the decline of 7.9 per cent at the end of the preceding month,” it explained.

Source:
http://sunnewsonline.com/new/banks-credit-to-domestic-economy-drops-by-0-3-to-n20bnsys-eng/