Bank Deposits Increased By N6.95trn In A Year – CBN
The Central Bank of Nigeria has revealed that bank deposits increased by N6.95tn between February 2019 and February 2020.
The CBN said this in its report on some of the personal statements of members of the Monetary Policy Committee.
The statement partly 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 recent 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 rose by 1.3 percent to N7.22tn of the end of January 2021, compared with the growth of 20 percent at the end December 2020.
The report further stated that net domestic assets declined by one percent, compared with a decline of 6.7 percent in the corresponding period of 2020.
The development was mainly as a result of the reduction in CBN claims on other financial corporations and state and local governments.
Consequently, it added, M3 fell by 0.6 percent at end-January 2021, compared with the decline of 2.1 percent at end-December 2020.
“The growth in narrow money (M1) was driven by the increase in transferable deposits, reflecting economic agents’ continued confidence in the banking sector”, it stated.
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 showed 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 percent at end-January 2021, in contrast to a decline of 4.5 percent 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.
According to the report, 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.
