• Login
  • Register
Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
Nairametrics
No Result
View All Result
Home Opinions Blurb

CBN says banks create N2 trillion new loans in 6 months

Abiola Odutola by Abiola Odutola
January 28, 2020
in Blurb, Business News
External reserves, CBN to hold MPC meeting next week, Demand for credit by household increases in Q2 2020 - CBN, CBN grants licenses to 3 Payment Service Banks, Mobile money loan CBN Governor, CBN, Three PSBs get Apex Bank’s provisional to commence operations, Milk Import: Experts advise CBN on FX restriction , CBN automates trading system, introduces electronic form to facilitate exports , CBN campaigns for Made-in-Nigeria products , CBN recent macroeconomic policies, others lead to a higher Fitch rating; from negative IDR to a stable ‘B’ rating, AGSMEIS: CBN expand beneficiaries to 14,638.
Share on FacebookShare on TwitterShare on Linkedin

Central Bank of Nigeria’s monetary policy committee has disclosed that banks have created about new N2 trillion loans in the last six months. The apex bank made this claim in its monetary policy communique.

Commenting on developments in the banking sector, the regulator expressed “delight” in the increase in lending to the private sector since it introduced its policy on loan to deposit ratios (LDR).

“The Committee observed with delight that over the last six months, aggregate credit grew by N2.0 trillion and urged the Management of the Bank to sustain the current momentum of improved flow of credit to the Private Sector while exploring other options with the fiscal authorities to strengthen the legal framework for the enforcement of credit recovery.”

RelatedStories

Zenith Bank

Zenith Bank shareholders blame CBN fines for lower dividend payouts in 2024 

May 5, 2025
CBN, forex

Court backs CBN, rejects interim ban on eNaira trademark use 

May 2, 2025

Bank’s non-performing loan ratios also dropped from 6.6% to 6.1%, according to excerpts from the communique.

So, who do banks lend to?

The CBN lists the sectors that benefited from the new credit across the private sector:

“Credit to the Private Sector also grew to 13.1% in December 2019, from 12.82% in the previous month. Consequently, the sectoral distribution of credit between end-May 2019 and end-December 2019 was as follows:”

  • Manufacturing (N446.44 billion);
  • General Retail and Consumer Loans (N419.02 billion);
  • General Commerce (N248.48 billion);
  • Agriculture, Forestry, and Fishing (N160.94 billion);
  • Information and Communications (N156.47 billion);
  • Finance and Insurance (N129.87 billion);
  • Construction (N86.54 billion); and
  • Transportation and Storage (N68.61 billion), amongst others.

On its LDR policy

The CBN noted that banks are yet to reduce interest rates on loans despite an obvious drop in deposit rates. This means that the financial institutions rejected deposits from some customers just to meet up with their LDR ratios. Banks were also reported to have switched from investing in government securities to lending to the private sector.

The Committee noted the improvement in the financial soundness indicators, growth in assets of the banking system and the gradual switch in the composition of DMB assets from investments in government securities to growth in the credit portfolio.

It, however, noted that lending rates at the retail segment of the market had remained fairly sticky downwards as deposit rates had declined substantially. It also noted that in some cases, DMBs were not encouraging term deposits in their portfolios and therefore, emphasized the Bank’s commitment towards the implementation of the Loan-to-Deposit ratio (LDR) policy.

Nine out of 11 members of the central bank’s committee voted to increased the bank’s cash reserve requirement (CRR) from 22.5% to 27.5% as it worried about the increase in money supply as well as other structural issues affecting the rise in the inflation rate. The bank-owned up that while the move was counterintuitive, it had no choice.

Although tightening would limit the ability of DMBs to create money, ultimately leading to a reduction in money supply and curtail their credit creation capabilities, which would eventually lead to the rising cost of credit and credit risk as DMBs re-price their risk assets.  The MPC believes that the aggressive pursuit of the current loan-to-deposit ratio policy thrust would continue to help to catalyze credit growth and positively impact growth and prices.


Follow us for Breaking News and Market Intelligence.
Tags: Central Bank of Nigerialoan to deposit ratiosMonetary Policy Committee
Abiola Odutola

Abiola Odutola

For further inquiries about this article, contact: Email: abiola.odutola@nairametrics.com Twitter: @AbiolaOdutola @nairametrics

Related Posts

Zenith Bank
Exclusives

Zenith Bank shareholders blame CBN fines for lower dividend payouts in 2024 

May 5, 2025
CBN, forex
Breaking News

Court backs CBN, rejects interim ban on eNaira trademark use 

May 2, 2025
CBN
Economy

Credit to government drops to N24.52 trillion in January 2025 – CBN  

February 28, 2025
CBN, forex
Financial Services

Experts ask CBN to take legal action against bank directors with bad loans to enforce corporate governance 

February 25, 2025
Dangote refinery is a major milestone on the path to macroeconomic stability
Economy

Bismarck Rewane backs CBN’s efforts to defend the Naira, says currency is undervalued

February 25, 2025
Dangote refinery is a major milestone on the path to macroeconomic stability
Economy

Supporting an “undervalued” naira is “necessary” – Rewane clarifies naira defense comment 

February 24, 2025
Next Post
okada ban

Lagos State says it did not license anybody to operate motorbike business

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Emple
first bank
Zenth Bank









DUNS

Recent News

  • Lagos Govt demolishes buildings encroaching on Ikota River in Lekki estates after extended deadline 
  • Lagos Govt begins demolition of shanties, unapproved buildings in Ikeja GRA 
  • TeKnowledge expands across Africa with new brand identity and AI-First expert services to accelerate enterprise transformation 

Follow us on social media:

Recent News

Lagos govt mandates permits for amplified sound in nightclubs, worship centres 

Lagos Govt demolishes buildings encroaching on Ikota River in Lekki estates after extended deadline 

May 10, 2025
Lagos Govt begins demolition of shanties, unapproved buildings in Ikeja GRA 

Lagos Govt begins demolition of shanties, unapproved buildings in Ikeja GRA 

May 10, 2025
  • iOS App
  • Android App
  • Contact Us
  • Home
  • Markets
  • Sectors
  • Economy
  • Business News
  • Financial Literacy
  • Disclaimer
  • Ads Disclaimer
  • Copyright Infringement

© 2025 Nairametrics

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Social Media Auto Publish Powered By : XYZScripts.com
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Login
  • Sign Up

© 2025 Nairametrics