As members of the Nigerian banking public await the 2013 full year financial reports of money deposit banks, which are currently going through the Central Bank of Nigeria’s scrutiny, the apex bank, at the weekend said the unaudited total profits of the banking industry for the first half of 2013 stood at N300.5 billion, a 22.95 per cent increase over the N244.4 billion achieved in the second half of 2012.
The disclosure which was contained in the CBN’s latest Financial Stability Report posted on its website at the weekend also indicated that the industry’s interest income, which increased by 13.47 per cent, largely accounted for the higher profit level.
The report also showed that the industry’s liquidity ratio stood at 67.8 per cent compared with 68.0 per cent at end-December 2012, saying all banks met the 30 per cent minimum regulatory liquidity ratio throughout the review period.
According to the Financial Stability Report, “the Nigerian banking sector continued to record improvements in key performance indicators. For instance, capital adequacy and Tier I capital to risk-weighted assets ratios increased to 19.2 and 17.2 per cent at end-June 2013, f r o m 1 8.1 and 1 6.1 pe r c e n t, respectively, at end-December 2012.”
The improvement in the ratios was said to have been facilitated by the retained profits and the raising of additional Tier II capital by some banks.
The report showed that banks’ total loans increased to N8,814 billion, from N8,150 billion at end-December 2012, reflecting an increase of N664 billion or 8.1 per cent at end-June 2013, while non-Performing Loans (NPLs) to total loans deteriorated to 3.7 per cent at end-June 2013, from 3.5 per cent at end-December 2012. The NPL ratio, however, remained within the 5 per cent threshold at end-June 2013. The NPL coverage ratio improved to 71.2 per cent at end-June 2013, from 68.7 per cent at end-December 2012, indicating a reduction.
Similarly, total deposits increased to N15,157 billion at end-June 2013,from N14,386 billion at end-December 2012, reflecting an increase of N771 billion or 5.35 per cent.