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CBN Report Outlines Banks’ Deposit, Lending Rates

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  • CBN Report Outlines Banks’ Deposit, Lending Rates

The Central Bank of Nigeria (CBN) has made public, the deposit and lending rates obtainable in commercial and merchant banks.

In a CBN report titled: ‘Deposit and Lending Rates in the Banking Industry’ obtained by The Nation, the apex bank said the disclosure is in furtherance of the transparency and full disclosure stance of the regulator.

It also aligns with the Monetary Policy Committee (MPC) decision that the lending rates obtainable in Deposit Money Banks (DMBs) be made public to guide business decisions.

The applicable rates for banks as at May 18 showed that while some banks lend cheaply to prime borrowers, their maximum lending rate to other category of borrowers went as high as 49.50 per cent per annum for the agricultural sector.

The report showed that Union Bank Plc lends to public utilities sector at 17.50 per cent, prime rate, and 24.50 per cent maximum rate. The bank lends for general purpose at 17.50 per cent, prime, and 52.50 per cent maximum.

Average rate for demand deposit at Union Bank is 0.50 per cent; 4.20 per cent for savings and 12.48 per cent for demand deposit. The bank however, lends to agriculture at 23.50 per cent, prime, and has 49.50 per cent as its maximum lending rate for the sector. Mining and quarrying borrow at 17.50 per cent, prime, and 33 per cent maximum. Power and Energy borrow at 22 per cent, prime, and 22 per cent, maximum, while oil and gas borrow at 7.50 per cent, prime, and 26 per cent maximum.

The CBN’s data showed that Unity Bank pays the highest average interest rate of 16 per cent per annum to depositors on time deposit, while GTBank pays the lowest of 7.13 per cent to time depositors.

First City Monument Bank (FCMB) lends at three per cent to oil and gas sector, prime rate, but its maximum rate to the sector is 30 per cent. Stanbic IBTC Bank lends at 11 per cent to oil and gas sector, prime rate, and has 30 per cent as its maximum rate to the sector.

The data showed that Skye Bank lends at nine per cent to government, prime rate, and 31 per cent maximum rate to the market segment.

Diamond Bank lends to oil and gas at 20 per cent prime, and has 30 per cent as its maximum lending rate to the sector.

For FirstBank, its average interest rate on demand deposit is zero per cent; 4.20 per cent average interest rate for savings deposit and 7.50 per cent for time deposit. The bank lends to agriculture at nine per cent, prime, 27 per cent maximum; manufacturing borrows at 20 per cent, prime, and 28 per cent maximum, while real estate borrows at 20 per cent, prime, and 27 per cent maximum. Finance and insurance borrow at 20 per cent prime, and 27 per cent maximum, while education borrows at 19 per cent prime, and 27 per cent maximum.

The power sector borrow at 19 per cent prime, 27 per cent maximum while capital market borrows from the bank at nine per cent prime, and 27 per cent maximum; oil and gas borrow at 20 per cent prime, and 28 per cent maximum.

For United Bank for Africa (UBA PLc), its average interest rate on deposit is 0.28 per cent; the lender pays 4.20 per cent on savings deposit, and 10.86 per cent for time deposit. The bank lends to agriculture at seven per cent, prime, and 25 per cent, maximum; manufacturing, 19 per cent, prime and 29 per cent maximum.

Access Bank’s average interest rate on demand deposit is 0.05 per cent; savings deposit is 4.20 per cent while time deposit is 11.84 per cent. The bank’s prime lending rate for agriculture, forestry, and fishing is 19 per cent; while maximum lending rate for the sector is 30.50 per cent. The bank’s prime lending rate to manufacturing is 14 per cent; while 30.5 per cent is its maximum lending rate. The lender lends to government at 16 per cent, prime, and 26.50 per cent maximum rate.

Its loans to education sector is priced at 19 per cent; and 30.50 per cent is the maximum rate. Power ad energy, oil and gas borrow at 15 per cent form the bank, prime while its maximum rate is 30.50 per cent.

Guaranty Trust Bank Pls’ average interest rate on demand deposit is 2.90 per cent; savings deposit at 4.20 per cent and time deposit at 7.713 per cent. The bank lends to agriculture at seven per cent, prime, 21 per cent maximum rate.

Manufacturers borrow from GTBank at 12 per cent, prime, 25 per cent maximum. The bank lends to real estate at 19 per cent, prime, 23 per cent maximum, while finance and insurance sector borrow from the lender at 21 per cent prime, 25 per cent, maximum. Government borrows at 18 per cent, prime, 18 per cent, maximum rates.

Speaking on the lending rates, Director-General, Lagos Chamber of Commerce and Industry, Muda Yusuf, said such rates further depresses investment and hurt the economy. According to him, it further alienates and causes disconnection between the banks and their customers.

“It will be an investment suicide for any businessman to borrow at such rates. It is an abnormality to lend at such rates in an economy that wants to create jobs and recover from recession. I urge the CBN to critically look at those rates and take immediate decision that will boost the real sector,” he said.

Yusuf added: “If you want the private sector to be engine of growth, you have to deal with interest rate. Lending to customers at such rates will further increase the level of default of borrowers because the higher the lending rate, the higher the default rate”.

On banks’ claims that their cost of operations is high, he said the apex bank can also reduce the Cash Reserve Ratio and Monetary Policy Rate (MPR) to reduce cost of funds for banks.

“Banks need to create credit that supports the economy, by boosting production and reducing poverty,” Yusuf said.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Insurance

Heirs Insurance Group Unveils Revolutionary Website for Seamless Insurance Experience

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Heirs Insurance Group has launched a website designed to revolutionize the insurance experience for its customers.

With a focus on simplicity, accessibility, and personalized service, the new website aims to streamline the process of obtaining insurance coverage and empower customers to make informed decisions about their insurance needs.

The website boasts a range of innovative features that make navigating insurance options easier than ever before.

From simple and intuitive navigation menus to personalized insurance recommendations, the website is designed to guide customers through every step of the insurance process quickly and efficiently.

According to Ifesinachi Okpagu, the Chief Marketing Officer of Heirs Insurance Group, the new website embodies the company’s commitment to delivering exceptional customer service.

“Today’s customers want simplicity, and this new website delivers on that request,” Okpagu said. “We are empowering customers to take control of their lives, their businesses, assets, and their most cherished people.”

One of the key features of the website is its personalized insurance experience, which takes customers through a short journey to help them identify the best insurance plan for their needs.

Whether customers are looking for coverage for their home, car, business, or loved ones, the website provides tailored recommendations to ensure they find the right insurance solution quickly and easily.

With its user-friendly interface and innovative features, the new website from Heirs Insurance Group sets a new standard for the insurance industry, making it easier than ever for customers to protect what matters most to them.

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Banking Sector

Safaricom, Access Holdings Forge Partnership to Revolutionize Remittance Corridor in Africa

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Safaricom, the leading telecommunications company in Kenya, has entered into a strategic partnership with Access Holdings, spearheaded by Aigboje Aig-Imoukhuede.

The collaboration aims to revolutionize the remittance corridor between East and West Africa, marking a significant step towards enhancing financial inclusion and empowering millions of individuals across the continent.

The partnership comes on the heels of Access Holdings’ recent acquisition of the National Bank of Kenya Limited, signaling the company’s ambitious expansion into the East African market.

Leveraging Safaricom’s extensive network and expertise in mobile money through M-Pesa, which currently dominates the mobile money market in Kenya, the alliance seeks to create seamless and efficient channels for remittance transactions.

Aigboje Aig-Imoukhuede, the driving force behind Access Holdings, expressed enthusiasm about the collaboration, highlighting its potential to transcend traditional boundaries and foster greater economic connectivity between East and West Africa.

He highlighted the fusion of collective expertise and resources between the two entities, underlining their shared commitment to driving financial inclusion and empowerment across the continent.

The partnership holds promise for addressing the challenges faced by millions of Africans in accessing affordable and reliable remittance services.

By connecting more than 60 million customers and 5 million businesses across eight countries, the collaboration aims to facilitate over $1 billion in daily transaction value, significantly boosting the flow of remittances within and outside Africa.

With the first phase of the collaboration focusing on key markets such as Nigeria, Kenya, Ghana, and Tanzania, stakeholders anticipate a transformative impact on the remittance landscape, paving the way for greater intracontinental trade and economic integration in line with the objectives of initiatives like the African Continental Free Trade Area (AfCFTA).

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Banking Sector

EFCC Urged to Repatriate Recoveries to NDIC for Depositors’ Relief

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The Nigeria Deposit Insurance Corporation (NDIC) has made a fervent plea to the Economic and Financial Crimes Commission (EFCC) to expedite the repatriation of recovered funds to its coffers to facilitate the timely reimbursement of depositors affected by bank failures.

During a recent meeting between the Managing Director of NDIC, Bello Hassan, and the Executive Chairman of the EFCC, Ola Olukoyede, at the NDIC headquarters in Abuja, Hassan stressed the importance of enhanced collaboration between the two agencies in recovering depositors’ funds lost due to bank failures.

Hassan emphasized that the return of recoveries made by the EFCC on behalf of the NDIC would significantly contribute to the prompt reimbursement of affected depositors.

He commended the EFCC for its unwavering efforts in combating corruption and financial crimes, highlighting its crucial role as a key member of the Taskforce on Implementation of the Failed Banks Act chaired by the NDIC.

The NDIC boss also highlighted the existing partnership between the two organizations, which led to the establishment of the NDIC Help Desk at the EFCC in 2022.

He disclosed that several high-profile cases referred to the EFCC were currently under investigation.

In response, Olukoyede reiterated the EFCC’s commitment to collaborating closely with the NDIC to combat financial crimes and safeguard the integrity of the Nigerian banking sector.

He pledged to intensify efforts to repatriate recovered funds promptly, acknowledging the interconnectedness between criminal activities and bank failures.

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