Bank lending rose by 12.5% in August ' CBN

The Central Bank of Nigeria has said that credit by Deposit Money Banks to the domestic economy rose to N12.140tn in August, from N10.791tn recorded in July, representing an increase of 12.5 per cent.According to a publication released by the apex bank, titled Economic Report for August 2011, the breakdown, on a month-on-month basis, showed that credit to states and local governments and credits to the core private sector rose by 11.5 and 9.8 per cents respectively, above their levels in July 2011.It said, "CBNs credit to the DMBs, largely, loans and advances, fell marginally by 0.04 per cent to N384.61bn at end-August 2011, while specified liquid assets of the DMBs stood at N3116.62bn, representing 21.5 per cent of their total current liabilities."This level of liquid assets was 12.9 percentage points above the preceding months ratio, but 8.5 percentage points below the stipulated minimum ratio of 30 per cent for fiscal 2011. The loan-to-deposit ratio was 43.6 per cent and was 36.4 percentage points below the stipulated maximum target of 80 per cent."Data in the publication shows that total assets and liabilities of DMBs amounted to N19.48tn, showing an increase of 4.3 per cent above the July level.It adds that funds sourced mainly from increased capitalisation, drawdown on reserves and increase in unclassified liabilities were used, largely, to extend credit to private sector and purchase Federal Government securities.The publication reads, "At N1.37tn, currency in circulation at the end of August 2011 rose by 2.7 per cent over the level recorded in July 2011. The development reflected wholly the increase in currency outside banks by two per cent. Similarly, it rose by 0.1 per cent over the level at the end of December 2010. Total deposits at the CBN amounted to N4.72tn, indicating a decline of 13.2 per cent from the previous month."The development reflected, largely, the 44.0 and 9.3 per cent decline in DMBs and FG deposits, respectively. Of the total deposits, the percentage shares of FG, banks and others were 79.5, 9.8 and 10.7 per cent, respectively. Reserve money fell by 15.1 per cent to N1.84tn below the N2.16tn recorded at the end of the preceding month, reflecting the trends in DMBs deposits with the CBN."
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