Total assets in the Nigerian banking sector increased by N11.8 billion in one year to N65.48 trillion at the end of June 2022, representing a 22% increase over the previous year.
Aishah Ahmad, Deputy Governor, Financial Systems Stability Directorate, revealed this in her personal statement at the most recent MPC meeting.
“Key industry aggregates also continued to rise year on year, with total assets rising to N65.48 trillion in June 2022 from N53.64 trillion in June 2021,” she said.
She stated that gross credit had risen by N5.02 trillion between June 2021 and June 2022, with significant growth in credit to the manufacturing, general commerce, and oil and gas sectors.
According to her, the increase was achieved despite a continued decline in the non-performing loan ratio from 5.3 percent in April 2022 to 5.0 per cent in June 2022.
She added that, “Furthermore, results of stress tests showed resilience of banks’ solvency and liquidity ratios in response to potential severe macroeconomic shocks.
“However, the bank must remain vigilant to proactively manage probable macro risks to the financial system such as lingering spillover effects of the pandemic, winding down industry forbearance portfolio, and other risks to financial stability such as exchange rate, operational and cyber security risks.”
Kingsley Obiora, a member of the MPC, stated that the financial soundness indicators showed that the banking system remained sound, stable, and resilient.
He attributed the expansion to “balances with CBN/banks, OMO bills, and credit to the real sector of the economy.”
“As a result, the total flow of credit to the economy increased by 22.78 percent or N5.02 trillion from N22.04 trillion in June 2021 to N27.06 trillion in June 2022 to various sectors of the economy, including oil and gas, manufacturing, general, governments, and general commerce,” he continued.
“The industry Non-Performing Loans ratio was 4.95 per cent at the end of June 2022 compared with 5.70 per cent at the end of June 2021, which was below the prudential maximum of 5.0 per cent.”
He added that the monthly average Open Buy Back and Inter-Bank rates fluctuated within the asymmetric corridor and increased from 9.39 and 8.38 per cent in May to 10.89 and 11.10 per cent in June 2022.
The increase, he said, reflected a tight banking liquidity condition, which could help rein in inflation and safeguard financial system stability.
