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Banks’ Borrowing From CBN Increases by 52% in December

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  • Banks’ Borrowing From CBN Increases by 52% in December

Liquidity challenges in the economy made the amount of money that commercial banks borrowed from the Central Bank of Nigeria to increase by 52 per cent in the first three weeks of December, data obtained from the CBN website showed on Monday.

The CBN Standing Lending Facility window data revealed that the Deposit Money Banks in the country borrowed N2.305tn from the regulator to cover their cash shortfall positions between December 1 and 22, 2017.

This represents a 52 per cent increase over the N1.515tn the nation’s lenders borrowed from the apex bank to cover their positions between November 1 and 22, 2017.

Commercial banks use the CBN’s SLF to support their liquidity shortfalls and meet trading obligations on short-term basis.

The DMBs borrowed N1.019the, N671bn and N614bn through the CBN’s SLF window during the first, second and third week of December respectively, the central bank data showed.

While the N614bn borrowed last week was eight per cent lower than the N671bn loan obtained the penultimate week, the latter was 34 per cent lower than the N1.019tn the banks borrowed from the CBN three weeks ago.

The CBN SLF data showed that banks borrowed N231.92bn, N217.08bn, N228.26bn, N178.28bn, and N164bn, respectively from the central bank between December 4 and 8, 2017.

Between December 11 and 15, the amounts borrowed were N178.02bn, N135.3bn, N123.77bn, N116.73bn and N117.64bn, respectively.

Between December 18 and 22, the banks borrowed N119.836bn, N132.651bn, N163.135bn, N110739bn, and N87.892bn, respectively.

During the last week of October and November, the CBN data showed that the banks’ borrowing from the apex bank rose significantly.

Some analysts attributed the trend to liquidity squeeze and banks’ demand for funds to participate in the special foreign exchange auctions conducted by the regulator.

In November, the commercial banks borrowed N2.77tn with an average amount of N154bn.

The highest and lowest amounts the lenders borrowed from the central bank last month were N260bn and N108bn, respectively.

Economic and financial experts said that the CBN’s lending to banks had increased in recent times on the back of liquidity issues in the economy.

Banks with liquidity challenges are often seen more on the CBN SLF window than others.

For example, Skye Bank Plc was said to be more frequent on the CBN SLF window months before the CBN sacked its board and appointed a new one.

The apex bank, which is described as a lender of last resort, has been accused of lending more to the Federal Government in recent months.

A member of the CBN Monetary Policy Committee, Dr. Doyin Salami, had recently accused the central bank of acting like a “piggy bank” with its funding of the government.

Salami said he was struggling to understand the apex bank’s economic rationale for such action.

Monetary data showed a sharp rise in the CBN’s financing of the government deficit this year, Salami said after the MPC meeting some months ago.

He stated that the CBN’s claims on the government had risen 20-fold to N814bn from the end of 2016, while its purchases of government treasury bills increased by 30 per cent to N454bn.

“It is clear that the CBN has provided piggy-bank services to the Federal government. While I still wonder what the underlying economics is, I sincerely hope it works,” Salami added.

The Federal Government is struggling to raise enough revenue amid economic challenges.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Banking Sector

Dennis Olisa Invests N53.6 Million in Zenith Bank

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Executive Director of Zenith Bank Plc Buys 2 Million Shares of Zenith Bank at N53.6 Million

Executive Director of Zenith Bank Plc, Dennis Olisa, has invested a combined N53.58 million in shares of Zenith Bank.

The leading financial institution stated in a disclosure statement filed with the Nigerian Stock Exchange (NSE) on Monday.

Olisa carried out the purchase in two different transactions on February 24, 2021 at the Nigerian Stock Exchange in Lagos, Nigeria.

He purchased 1 million units of Zenith Bank at N26.60 each and another 1 million shares at N26.50 per share.

On aggregate, Olisa purchased 2 million shares of Zenith Bank at N26.79 per share or N53.58 million. See the details below.

Dennis Olisa was appointed as Zenith Bank’s executive director three years ago.

Prior to his appointment, Mr. Olisa was the Chief Inspector at Zenith Bank Plc and served as its Director from March 3, 2017 until March 16, 2017.

He also served as General Manager and Heads of the Energy Oil & Gas Group at Zenith Bank Plc and served as its Deputy General Manager. He served as Head of Internal Control & Audit Group at Zenith Bank Plc

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Finance

Emefiele Pledges Accommodative Monetary Policy to Boost Economic Growth

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Godwin Emefile

Emefiele Pledges Accommodative Monetary Policy to Boost Economic Growth

The Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has pledged to adopt accommodative monetary policy stance in 2021 in order to support economic growth in the country.

Emefiele, said this on Friday, while speaking at a CBN/Bankers’ Committee’s initiative for economic growth, which is a one-day special summit on the economy by bank chief executive officers.

The theme of the summit is: “How to Overcome the Pitfalls of Recession.”

Nigeria’s economy recently came out of recession, according to the Gross Domestic Product report for fourth quarter 2020 released by the National Bureau of Statistics.

Owing to the slump GDP growth of 0.11 per cent that lifted the economy out of recession, Emefiele said it was imperative that, “we do all we can in 2021 and beyond to ensure that we build on the positive momentum and strengthen our efforts at stimulating growth.”

He expressed optimism that with the discovery and deployment of vaccines worldwide, 2021 would be a year of massive global recovery and Nigeria must not be left out.

“The banks CEOs are here, whether by moral suasion or by force, they will have to participate in this journey. In order to drive and sustain this recovery therefore, we need to sustain the accommodative fiscal and monetary policy measures aimed at improving access to finance for households and businesses.

“Secondly, we must prevent a resurgence in Covid-19 related cases. Thirdly, we must ensure that a significant number of our population is significantly vaccinated and also improve foreign exchange inflows into our country,” he added.

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Banking Sector

CIT Microfinance Bank Disburses Over N16bn Loans

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micro-finance-bank

CIT Microfinance Bank Disburses Over N16bn Loans

CIT Microfinance Bank Limited says it has disbursed about N16bn loans since it commenced operations as part of its contributions to the financial sector and empowerment of businesses.

The Managing Director of the microfinance bank, Mr Kingsley Eremionkhale, disclosed this during the company’s 10th anniversary in Lagos recently.

He reiterated that the bank was committed to supporting the growth of small and medium-scale enterprises in the country.

“Since inception, we have disbursed loans worth about N16bn. Our operation is not just about profit-making, but we have impacted many lives, empowered many businesses, and done a lot in terms of our core mandate as a microfinance bank.”

While appreciating its customers who had been loyal to it for years, he said it was concerned about their business success.

The managing director said, “We are part of our customers’ businesses. We provide services beyond lending and savings products and we also give financial advisory services.”

He appreciated the customers who had stayed with the financial institution for many years.

The managing director noted that the MfB is a state-licensed bank operating in Lagos, and a subsidiary of Capitalfield Investment Group.

He also attributed the success of the MfB to the board of directors which it said had been supportive, the management team and its workforce in the past 10 years.

While saying that the bank could lay claims to exponential growth, he said the public should expect more from it.

He also said that it was driving its operations through its digital offerings and our e-channels, to improve its services to our customers.

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