Banks have been frequenting the Central Bank of Nigeria (CBN) Window to borrow cash to boost their liquidity positions, according to the CBN Economic Report for the second quarter, released yesterday.
Twenty-one commercial banks borrowed N4.06 trillion from the CBN’s Window in the first quarter- between April and June.
The figure, the report said, was by far higher than N560.8 billion borrowed in the first quarter- from January to March this year, the report released yesterday showed.
The funds came through the Standing Lending Facility (SLF), which is an overnight CBN credit available on banking days between 2 pm and 3.30 pm, with settlement done on same day value. Funds were sourced mainly from time, savings and foreign currency deposits, as well as accretion to unclassified assets. The funds were used, largely, to extend credit to the private sector and payment of claims on demand deposit.
The CBN attributed the huge borrowing figure by banks to foreign exchange illiquidity in the system, which it said, hindered the smooth running of the foreign exchange inter-bank market and this led the bank to float a special foreign exchange auction.
The apex bank said the settlement of these transactions drained liquidity in the money market. Consequently, inter-bank money market rates spiked and the trend in standing facilities reversed as there was more patronage at the Standing Lending Facilities (SLF) than the Standing Deposit Facility (SDF).
The regulator said provisional data indicated that total value of money market assets outstanding at the end of the second quarter of 2016 stood at N10.46 trillion, showing an increase of 6.7 per cent, compared with the level in the first quarter. The development reflected the 8.09 per cent and 2.73 per cent growth in Federal Government of Nigeria bonds and treasury bills, respectively.
The report, posted on the CBN’s website, said developments at the CBN standing facilities window in the review quarter indicated higher patronage at the SDF window, during the first two months of the review quarter.
The trend, however, reversed with the settlement of a large volume of foreign exchange purchased at the special auction conducted on June 20.
“Total request for Standing Lending Facility (inclusive of Intraday lending facilities converted to overnight repo) during the review period amounted to N4.06 trillion, with N1.46 billion in interest earned, compared with SLF of N560.80 billion and interest earned of N0.28 billion in the preceding quarter,” it said.
This amounted to N3.50 trillion and N1.18 billion increase in SLF and interest earned, respectively, from the levels in the first quarter of this year. It said the total deposit at the SDF window during the review period was N6.01 trillion with a daily average of N100.22 billion, compared with N6.61 trillion in the first quarter of this year.
The report said the cost incurred on SDF in the review quarter stood at N1.74 billion, compared with N1.08 billion, in the preceding quarter.
It said the commencement of the new foreign exchange policy on June 20 influenced the direction of the financial market thereafter.
CBN data also showed that the total assets and liabilities of the commercial banks stood at N31.23 trillion at the end of the preceding quarter of 2016, representing an increase of 9.6 per cent over the level at the end of the preceding quarter.
The funds, it said, were sourced, mainly, from time, savings and foreign currency deposits, foreign liabilities and unclassified liabilities. The funds were used, mainly, to increase claims on private sector, acquire foreign and unclassified assets.
FG Implores Parastatals to Promote the Country’s Digital Economy Initiative
FG Tells MDAs to Promote the Country’s Digital Economy
The Ministry of Communications and Digital Economy under the management of Dr. Isa Pantami, has implored all the federal government parastatals to promote and safeguard the country’s digital economy initiative.
Dr. Isa Pantami, while presenting the keynote address in a virtual forum organised by the Association of Telecoms Companies of Nigeria (ATCON), said based on the negative effects of COVID-19 pandemic, the demand for critical data infrastructure and broadband is now high.
The minister urged government parastatals to put in effort to uphold and promote government’s digital economy initiative designed to reduce the effect of the pandemic on the nation. He also disclosed that the interests of all Nigerians would also be protected by the government.
“Federal government will continue to develop its digital economy policy for a digital Nigeria. Both the Nigerian Communications Commission (NCC) and the National Information Technology Development Agency (NITDA) that are under the supervision of my ministry, now have special departments that promotes digital economy initiative and I urge them and all other parastatals under my supervision, to ensure that they promote the digital economy initiative of the federal government in order to maintain investor’s confidence and to protect the interest of Nigerians, especially telecoms consumers.
“Government on its part will ensure that the interests of telecoms companies and the interest of Nigerians are protected. Government is currently addressing the challenges in the cost of investments such as the issue of vandalisation of telecoms infrastructure, and President Muhammadu Buhari has officially directed all security institutes, through the Office of the National Security Adviser (ONSA), to protect telecoms investments in the country,” Pantami said.
The Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta, when making his presentation said “The COVID-19 pandemic rapidly and sharply ravaged the globe, Nigeria is no exception. Governments therefore, faced unprecedented challenges from COVID-19 pandemic. The impact affects most sectors of the global economy, ranging from health, to education, to finance, to trade and investment.”
While explaining the Commission’s efforts at resolving consumer-related issues, Danbatta noted that less than 500,000 people activated Do-Not-Disturb (DND) code as at 2015 when the code was introduced by the Commission but presently, over 22,722,366 people line on the code.
He also made it known that the commission has resolved 98 per cent of service-related complaints received from telecoms consumers from January 2019 to April 2020.
according to Danbatta “the Commission has monthly engagements with operators as well as quarterly industry working group on Quality of Service and Short Codes, and is currently monitoring 2G Key Performance Indicators, while the KPIs for 4G are being prepared.”
Mambilla Power Project: FG Spends N1.2bn on Survey, Sensitisation
FG Releases N1.2bn for 3,050MW Mambilla Hydroelectric Power Project
The Federal Government has released a total sum of N1.2 billion to the Taraba State Government for the 3,050 megawatts Mambilla Hydroelectric Power Project to finally take-off.
Investigations have revealed that the funds were released for the sensitisation of host communities around the site where the plant is to be constructed and survey works.
The N2 trillion power project is to be located in Sardauna Local Government Area of Taraba State after four decades of on and off planning.
Checks revealed that Sale Mamman, the Minister of Power, visited Taraba State last week, where he met with Darius Ishaku, the State Governor, and discussed the final take-off of the 3,050MW project, among other things.
Mamman on Wednesday had tweeted some of the highlights of his Wednesday visit, saying the Federal Government and Taraba State Government discussed how to speed up the project.
He said, “I paid a visit to the Taraba State Government House where I met with the governor and brother.
“We held discussions centered on how to speed up the final take-off of the Mambilla Hydroelectric Power Project and other power issues affecting the state.”
FBN Holdings Boost First Bank CAR With N25 Billion Capital Injection
First Bank Boosts CAR With N25 Billion Capital Injection
FBN Holdings Plc announced it has boosted the Capital Adequacy Ratio (CAR) of its commercial banking subsidiary, First Bank of Nigeria Limited by N25 billion.
According to the statement released by the bank on the Nigerian Stock Exchange website, the capital injection represents part of the net proceeds of the company’s divestment from FBN Insurance Limited.
It noted that the capital injection upped the bank’s Capital Adequacy Ratio to 16.53 percent –before capitalising year to date profit– as at June 2020.
Oyewale Ariyibi, the Chief Financial Officer of the Company, was quoted as saying “the divestment is in line with the Group’s medium to long term strategic objectives. The divestment has unlocked significant value embedded in the former subsidiary which is being leveraged to strengthen the core banking business for which the Group is renowned“.
Ariyibi further stated that the Company’s objective is to increase capital across the Group in order to drive business growth, enhance efficiency and improve overall shareholders’ value.
Uk Eke, the Group Managing Director, who commented on the company’s performance for the first half of 2020 said “The H1 2020 financial results are impressive and reconfirm our consistent focus on enhanced shareholder value. Despite the difficult operating environment, the results demonstrate our capacity to deliver exceptional services to our customers in these uncertain times. Looking ahead, we remain cautious, but confident that our business is fundamentally strong to surmount any future challenge towards delivering superior financial performance“.
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