Bank lending to the domestic economy increased by four per cent to N13.8tn at the end of July, according to the Central Bank of Nigeria’s latest monthly report.
The report, available on the bank’s website, stated that the four per cent increase was on month-on-month basis, compared with the growth of 0.4 per cent at the end of the preceding month.
The CBN linked the growth to increase in claims on the private sector and the Federal Government.
The report said, “At N13.8tn, aggregate banking system credit to the domestic economy, at end-July 2013, increased by 4.0 per cent, on month-on-month basis, compared with the growth of 0.4 per cent at the end of the preceding month.
“The development reflected, largely, the respective increase of 0.7 and 17.6 per cent in claims on the private sector and the Federal Government. Over the level at end-December 2012, aggregate banking system credit (net) to the domestic economy rose by 8.8 per cent, due largely to the increase of 4.3 and 19.5 per cent in claims on private sector and the Federal Government, respectively.”
According to the central bank, banking system’s credit to the Federal Government rose by 17.6 per cent to negative N1.9tn on month-on-month basis.
The increase, the central bank said, was in contrast to the decline of 6.6 and 36.4 per cent at the end of the preceding month and the corresponding period of 2012, respectively.
It further said that over the level at end-December 2012, banking system credit to the Federal Government rose by 19.5 per cent, which it said reflected largely the increase in banking system’s holding of government securities.
The report said, “Banking system’s credit to the private sector, on month-on-month basis, grew by 0.7 per cent to N15.7tn, compared with the 1.3 and 1.0 per cent increase at the end of the preceding month and the corresponding period of 2012, respectively. Relative to the level at end-December 2012, banking system’s credit to the private sector rose by 4.3 per cent, owing to the increase in claims on the core private sector and state and local government.”
According to the CBN, foreign assets in the banking system fell by 1.2 per cent on month-on-month basis to N8.9tn at the end of July 2013.
The report compared the fall to a 4.1 per cent decline at the end of the preceding month, and a 3.9 per cent growth recorded at the end of the corresponding month in July.
Over the level at end-December 2012, foreign assets of the banking system fell by 1.5 per cent, the report stated.
The report added, “Other assets (net) of the banking system, on a month-on-month basis, fell by 17.8 per cent to negative N7.9tn, in contrast to the increase 6.9 per cent at the end of the preceding month. The decline in the review month reflected, largely, the fall in unclassified assets of both the CBN and banks. Similarly, over the level at end-December 2012, other assets (net) of the banking system fell by 26.5 per cent.”
Also, the CBN said the currency-in-circulation rose by 2.2 per cent in July to N1.4tn, in contrast to the decline of 2.2 per cent and 0.1 per cent at the of the preceding month and the corresponding period of 2012, respectively.
The report linked the development, relative to preceding month, to the 1.2 per cent increase in currency outside banks.
It said, “Total deposits at the CBN amounted to N6tn, indicating a decline of 0.4 per cent below the level at the end of the preceding month. The development reflected, largely, the decline in private sector and Federal Government’s deposits, which more than offset the increase in DMBs’ deposits. Of the total deposits, the percentage shares of the Federal Government, banks and private sector1 were 54.1, 39.7, and 6.2 per cent, respectively, compared with 62.5, 29.6 and 7.9 per cent at end-June 2013.”
According to the CBN, reserve money rose by 19.7 per cent to N3.3tn at the end of the review month, reflecting the trend in its currency-in-circulation and DMBs’ components.