Sterling Bank Plc, one of Nigeria’s tier 2 banks reported that the Central Bank of Nigeria’s CBN restricted about N215.5 billion of its customer deposits as of June 2020.
The bank reported this in its 2020 half-year interim results published on the website of the Nigerian Stock Exchange. According to the data, Sterling Bank’s confirmed the amount of its customer deposits now held by the CBN is about N215.5 billion and explained it “represent mandatory reserve deposits and are not available for use in the bank’s day-to-day operations” which can be interpreted as Cash Reserve Requirement “CRR”.
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Sterling Bank Data
- Deposits from Customers – N915.3b (N892. 6billion)
- Loans to customers – N615 billion (Dec 2019: N618.7 billion)
- Sterling Bank CRR – N215.5 billion (Dec 2019: N122.1 billion)
- Sterling Bank got debited N93 billion so far this year
- This breaks down to about N71.1 billion and N21.9 billion debited in the first and second quarters respectively.
- CRR as a percentage of deposits as at June 2020 – 23.5%
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CBN CRR Policy
The central bank of Nigeria increased its cash reserve requirement (CRR) to 27.5% from 22.5% at the monetary policy committee meeting held on January 23rd to 24th. The CRR is the amount the CBN debits from banks accounts in compliance with its monetary policy objective of mandatorily keeping cash on behalf of banks. The amount is not available for banks to use.
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Sterling Bank Results
The Bank also published its 2020 second-quarter results showing net interest income was up 16% to N18 billion.
- Pre-tax profits also rose 24% YoY to N3.3 billion despite the Covid-19 pandemic induced economic lockdowns.
- Despite the improved profits, the bank did report a spike in its provisions for impairments jumping almost 3 folds to N5.3 billion.
- To put this into context, Sterling Bank suffered an impairment of N5.8 billion in the whole of 2019.
- Sterling Bank’s cost to income ratio remains high at about 86%.