The total assets of the banking industry increased by N8.25trillion or 16.18 per cent to N59.24trilion in December 2021 from N50.99 trillion in the corresponding period of 2020, latest Central Bank of Nigeria (CBN) data shows.
According to personal statements written by members of the CBN’s Monetary Policy Committee (MPC) at their meeting in January, which were posted on the apex bank’s website, the banking industry remains resilient and continues to post record growth in assets despite the impact of the Covid-19 crisis.
For instance, in her personal statement, Deputy Governor, Financial System Stability (DG, FSS )at the CBN, Mrs. Aishah Ahmad, stated: “The financial system maintained its resilience into 2022 as data provided by Bank staff indicated stability in broad soundness indicators and an unprecedented improvement in asset quality, even as credit to the private sector continued to grow.
“Capital adequacy as at December 2021 was robust at 14.53 per cent, 453 basis points above the regulatory minimum of 10 per cent.
Industry liquidity was also strong at 41.33 per cent over the same period and supported by significant cash reserve requirement buffers available to provide liquidity backstops should banks require it.
“Key industry aggregates also continued their yearon- year upward trajectory with total assets rising to N59.24trillion in December 2021 from N50.99 trillion in December 2020, while total deposits rose to N38.42 trillion from N32.21 trillion over the same period.
Total credit also increased by N4.09 trillion between end[1]December 2020 and end-December 2021 with significant growth in credit to manufacturing, General commerce and Oil & Gas sectors.
This impressive increase was achieved amidst continued decline in non-performing loans ratio from 5.10 per cent in November 2021 to 4.94 per cent in December 2021 (6 basis points below the regulatory benchmark) for the first time in over a decade.
“Furthermore, results of stress tests showed resilience of banks’ solvency and liquidity ratios in response to potential severe macroeconomic shocks.”
Similarly, in his personal statement, Deputy Governor (Economic Policy) at CBN, Dr. Kingsley Obiora, wrote: “The banking system continued to sustain its soundness, safety and resilience amid economic recovery.
The total asset of the banking industry increased from N50.99 trillion from end-December 2020 to N59.24 trillion, representing an increase of 16.18 per cent, driven by balances with CBN/ banks, OMO bills and credits.
“Accordingly, the banking system continued to increase the flow of credit to the real economy. The gross banking sector credit increased by N4.88 trillion or 22.0 per cent from N22.68 trillion at the end of December 2020 to N27.56 trillion at the end of December 2021.
The increased credit was recorded in oil and gas, manufacturing, general, government, and general commerce.
“Furthermore, the Non-Performing Loans (NPLs) was below the regulatory benchmark of 5.0 per cent for the first time in several years. It stood at 4.94 per cent at end-December 2021, compared with 6.13 per cent at end-December 2020, attributed to recoveries, restructuring of facilities and write-offs during the year. The average monthly weighted average Open Buy Back (OBB) rates rose to 12.75 in December 2021 from 10.61 per cent in November 2021, showing tight banking system liquidity conditions – a reflection of the Bank’s effort at reining the monetary side of inflation and ensuring a stable banking system.”