Foreign Assets of Banks Surged by 10.2% in Q1, 2020

The Central Bank of Nigeria has said net foreign assets of Nigerian banks rose by 10.2 percent in the first quarter due to the recent Naira devaluation.

The central bank disclosed this in its monthly economic report for the quarter.

It said “Foreign assets (net) of the banking system, on quarter-on-quarter basis, rose by 10.2 per cent to N6.39tn at end-March 2020, compared with the growth of 7.5 per cent in the fourth quarter of 2019, but was in contrast to the growth of 15.3 per cent at the end of the first quarter of 2019.

“The increase in net foreign assets was due largely to the exchange rate adjustment during the review period.”

On a quarterly basis, the central bank said claims on domestic economy (net) expanded by 5 percent to N37.97 trillion in the first quarter.

It said, “This reflected wholly the 2.6 and 5.8 per cent increase in net claims on government and claims on other sectors, compared with the growth of 1.4 per cent and 15.9 per cent at the end of the fourth quarter of 2019 and the first quarter of 2019, respectively.

“Net banking system claims on government, on quarter-on-quarter basis, grew by 2.6 per cent at end-March 2020, compared with a growth of 48.0 per cent in the first quarter of 2019, but was in contrast to the 4.4 per cent decline recorded at the end of the fourth quarter of 2019.”

The apex bank said the development was a result of an increase in holdings of government securities by the monetary authority.