NBS: Credit to Private Sector Declines to N15.13tn

James Emejo in Abuja

Total banking industry credit to the private sector dropped by 2.92 per cent to N15.13 trillion in the fourth quarter of 2018, compared to the N15.58 trillion recorded in the preceding quarter, according to the National Bureau of Statistics (NBS).

The Selected Banking Sector Data for Q4, 2018, released Wednesday by the NBS showed that the manufacturing sector got N2.23 trillion of total credit, while the oil and gas sector received credit allocation of N3.55 trillion to record the highest loan allocation within the period under review.

According to the report, total credit to agriculture was N610.14 billion; industry, N20.69 billion; power and energy, N403.37 billion; and construction, N614.51 billion.

Others include trade/general commerce, N1.07 trillion; government, N1.36 trillion; real estate, N622.77 billion; and finance, insurance and capital market, which got N1.10 trillion loan allocation, among others.

The NBS further stated that total non-performing loans (NPLs) in the banking industry however declined to N1.79 trillion in Q4 compared to N2.24 trillion in Q3.

However, a total volume of 616,528,697 transactions valued at N39.15 trillion were also recorded in Q4 on electronic payment channels in the banking industry.

The NIBSS Instant Payments (NIP) transactions dominated the volume of transactions, recording 228,209,42 transactions valued at N23.57 trillion in Q4.

The volume of ATM transactions was 225,460,122 valued at N1.71 trillion while PoS transactions totaled 89,059,216 and was valued at N714.34 billion within the review period.

According to the report, web transaction volume stood at 17,382,354 valued at N221.53 billion.

Mobile payment transaction volume was 26,246,770 worth N592.93 billion, while electronic bills payment (Ebillspay) stood at 260,743 in volume of transactions valued at N128.18 billion. Also, 13,252,561 transactions valued at N4.94 trillion was recorded on the Remita payment system.

Citing the robust liquidity in the system, the Central Bank of Nigeria (CBN) had disclosed that the Capital Adequacy Ratio (CAR) of commercial banks improved from 10.79 per cent as at August 2018, to 15.26 per cent as of December 2018.

The development was attributed to the recent promissory notes issued by the federal government to settle contractor debts.

Also, the liquidity ratios, return on asset and return on equity have remained robust.

CAR is a measurement of a bank’s available capital expressed as a percentage of its risk-weighted credit exposures.
The CBN requires that banks with international subsidiaries maintain CAR of 15 per cent, while banks without international subsidiaries maintain CAR of 10 per cent.

But the minimum requirement for the systemically important banks is 16 per cent.

The central bank was also planning to introduce new capital rules in the second quarter of 2019 that would be stricter about what sort of funding qualifies as capital.

The rules, which will align the banking industry with the international accord known as Basel III, also require lenders to create buffers that should help them in the case of a crisis.

According to CBN’s Deputy Governor, Financial System Stability Directorate, Mrs. Aishah Ahmad: “Data provided by bank staff showed that the industry capital adequacy ratio increased considerably from 10.23 per cent in December 2017 to 15.26 per cent in December 2018.

“The improvement in capital buffers is a positive development, which will be critical should a downward trend in crude oil prices manifest given banks’ portfolio concentrations in the oil and gas sector.”