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Bank deposits rose by N6.95tn in one year – CBN

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Bank deposits rose by N6.95tn between February 2019 and February 2020, the Central Bank of Nigeria said.

The CBN disclosed this in its report on some of the personal statements of members of the Monetary Policy Committee obtained by our correspondent on Thursday.

Part of the statement read, “However, there were moderate declines in returns on equity and returns on assets and a significant rise in the share of operating incomes in total interest incomes of Deposit Money Banks.

“All measures of bank size, total assets, credit and deposits significantly rose year-on-year. Over N4.56tn additional credit was created in the last one year, N300bn in the last one month and N6.95tn of additional deposits.”

The CBN also disclosed in its latest monthly economic report for January that broad money supply (M3) declined in January 2021 due, largely, to the fall in net domestic assets of depository corporations, which more than offset the growth in net foreign assets.

As a result of the growth in net foreign assets of the CBN, which outweighed the decline in that of other depository corporations, it stated, net foreign assets of the banking system grew by 1.3 per cent to N7.22tn of the end of January 2021, compared with the growth of 20 per cent at the end December 2020.

The report stated that net domestic assets declined by one per cent, compared with a decline of 6.7 per cent in the corresponding period of 2020.

The development was due, mainly, to the reduction in CBN claims on other financial corporations and state and local governments.

Bank deposits rose by N6.95tn in one year – CBN

Consequently, it added, M3 fell by 0.6 per cent at end-January 2021, compared with the decline of 2.1 per cent at end-December 2020.

The growth in narrow money (M1) was driven, wholly, by the increase in transferable deposits, reflecting economic agents’ continued confidence in the banking sector, it stated.

It said that this development was buttressed by the decline in the ratio of currency outside depository corporations to M1.

According to the report, growth in domestic claims reflected increased net lending to the central government and claims on the private sector, induced by the bank’s effort to enhance economic activities.

Net claims on the central government grew by 6.4 per cent at end-January 2021, in contrast to a decline of 4.5 per cent in the corresponding period of 2020.

The development reflected, largely, net claims of commercial and merchant banks and non-interest banks on account of increased government securities holdings.

Credit to the private sector grew by 1.4 per cent at end-January 2021, compared with 0.1 per cent in the corresponding period of 2020, it stated.

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