Banks’ loan to private sector hit highest in September – CBN

October 28, 2019
229 Views

Banking sector credit to private sector rose to its highest this year increasing by 2.61% in September from N24.8 trillion in August. This happened after a period it experienced marginal decrease recording N24.88 trillion, N24.76 trillion and N24.29 trillion in May, June and July.

This is contained in the latest statistics on money and credit released recently by the Central Bank of Nigeria.

According to the CBN report, bank credit to government and the private sector hit N36.48 trillion in September 2019.

The report said the surge in banking sector lending to private sector could be attributed to the recent directive of CBN that mandated banks to loan out 65% of total bank deposit.

In a bid to drive lending to the real sector, the CBN directed all banks to sustain a minimum of 65% Loan to Deposit Ratio by the end of December 2019.

Analysts expect this trend to continue till the end of the year as banks try to meet up with the CBN’s directive and won’t want to pay the penalty of additional cash reserve requirement which will be 50% of the lending shortfall of the target LDR.

Meanwhile, the CBN report also disclosed that the total net credit to the domestic economy increased from N34.27 trillion in August 2019 to N35.92 trillion in September indicating a 4.8% increase while banking sector credit to government dropped 1.13% to N11.01 trillion in September 2019 from N11.13 trillion in August.

The drop in banking sector credit to government may be attributed to the CBN directive restricting banks access to Money Market Securities, especially Treasury bills, reducing the exposure of banks to Federal Government securities

In addition, total currency in circulation declined to N2 trillion in September from N2.02 trillion that the apex bank reported in August, putting average currency in circulation in 2019 at N2 trillion.

You may be interested

Neymar Should Have Won Five Ballon d’Or Awards —Buffon
News
3 views
News
3 views

Neymar Should Have Won Five Ballon d’Or Awards —Buffon

Webby - November 19, 2024

Legendary Italian goalkeeper Gianluigi Buffon has said Brazilian star Neymar should have won at least five Ballon d’Or awards.In an…

NPFL: Finidi Satisfied With Rivers United’s Draw Vs Remo Stars
Sports
1 views
Sports
1 views

NPFL: Finidi Satisfied With Rivers United’s Draw Vs Remo Stars

Webby - November 18, 2024

Rivers United head coach, Finidi George has expressed satisfaction with his team’s performance in Sunday’s Nigeria Premier Football League (NPFL)…

Van Nistelrooy Applies For Vacant Coventry Coaching Job
News
News

Van Nistelrooy Applies For Vacant Coventry Coaching Job

Webby - November 16, 2024

According to talkSPORT, (Yahoo! Sport) Van Nistelrooy has already applied for the vacant manager role at Championship side Coventry City.This…

Leave a Comment

Your email address will not be published.