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Financial Services

FUGAZ Banks suffer N1.9 trillion in CRR Debits in Q2

In total, the CBN now holds a total of N6.57 trillion in CRR debits from the nation’s top 5 banks

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Artificial Intelligence

Nigeria’s top 5 banks; First Bank, UBA, GT Bank, Access Bank, and Zenith Bank suffered a N1.9 trillion debit in CRR sequesters in the second quarter of 2020 (April – June).

This is according to information in the financial statements of the banks tracked by Nairalytics the research arm of Nairametrics.

READ: MTN Nigeria revenues rise to over N100 billion monthly in 2020

Nigeria’s central bank has since 2019 debited Nigerian banks a chunk of their deposits as part of a mutually inclusive cash reserve requirement (CRR) and Loan to Deposit Ratio policy that is targeted at coercing banks to lend more to the private sector.

In total, the CBN now holds a total of N6.57 trillion in CRR debits from the nation’s top 5 banks a whopping 43% higher than the N4.58 trillion held in March and more than double the N3.5 trillion CRR debits as at December 2020.

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According to our records, the top 5 banks have a total customer deposit (excluding subsidiary balances) of N18.26 trillion thus CRR debits represent about 35.9% of total customer deposits as of June 2020.

READ: UPDATED: Nigeria’s GDP contracts by 6.10% in Q2 2020, as critical sectors plunge

CRR Debit by banks as at June 2020

  • First Bank, Nigeria’s oldest bank suffered N576 billion debit in the second quarter of the year alone. First Bank now has a total CRR debit of N1.6 trillion kept with the CBN.
  • UBA, the Nigerian bank with the most African presence suffered a CRR debit of N521.7 billion in the quarter ending June 2020. The bank’s total deposit with the CBN is now N1.5 trillion.
  • GT Bank, Nigeria’s largest bank by market capitalization reported a CRR debit of N251.5 billion in the quarter under review representing about 8.4% of its N2.49 trillion customer deposits. The bank now has a total of N881.6 billion in CRR debits held by the CBN.
  • Access Bank reported a CRR debit of N158.6 billion, the lowest of the FUGAZ banks in the quarter under review. A total of N1.1 trillion in the bank’s customer deposits has now been sequestered by the CBN.
  • Zenith Bank, Nigeria’s largest bank by profits suffered a CRR debit of 472.9 billion in the second quarter of 2020 taking its total CRR haul to N1.4 trillion. About 9.6% of the bank’s customer deposits are held by the CBN.

READ: UPDATED: Nigeria received $1.29 billion capital inflows in Q2 2020, down by 78.6%

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Upshots: The central bank is likely to continue with this controversial policy as it continues to mount pressure on banks to lend. In August, Nairametrics reported the CBN debited banks with about N321 billion from commercial banks.


Article contributions from Samuel Oyekanmi, John Nwokolo, and Ugo Obi-Chukwu

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Financial Services

CBN reviews appointment requirements for CCOs in Banks

The CBN has reviewed the appointment criteria for CCOs in Merchant Banks and Regional Banks.

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Access Bank Plc, Herbert Wigwe, CBN, interest payment on bank deposits, CBN review appointment requirements for Chief Compliance Officers in Banks

The Central Bank of Nigeria (CBN) has reviewed the appointment criteria for Chief Compliance Officers in Merchant Banks and Regional Banks (Commercial and specialized).

This is according to a circular issued by the apex bank dated October 9, 2020, and signed by its Director of Financial Policy and Regulation Department, Kevin Amugo.

READ: CBN has rolled out new anti money laundering penalties that should get any banker worried

According to the latest notice, Merchant banks and Regional banks are hereby granted dispensation to appoint CCOs on a grade not below an Assistant General Managers. However, the CCOs will report directly to the ECO of the financial institutions who have sole responsibility for compliance matters in the bank.

READ: CBN to “reduce” savings rate to 1% declare OMO bills as “Poison”

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Backstory

This latest action by the CBN is the sequel to consultations and engagement with stakeholders emanating from its earlier circular referenced FPR/DIR/GEN/CIR/06/004 of September 28, 2016, in which the tentative requirements for Executive Compliance Officers and Chief Compliance Officers of deposit money banks were mooted.

(READ MORE:CBN moves to ring-fence Disco collections)

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Meanwhile, the requirements and responsibilities of Executive Compliance Officers remain as earlier communicated in the circular dated 28 September 2016.

A part of the recent circular signed by Mr. Kevin read thus,

READ: CBN grants approval for banks to debit accounts of loan defaulters 

“Further to the circular referenced FPR/DIR/GEN/CIR/06/004 of 28 September 2016 on the appointment of Executive Compliance Officers (ECO) and Chief Compliance Officers (CCO) of deposit money banks, the CBN has, after due considerations and presentations by stakeholders on the size, structure, operation, and dynamics of classes of operators in the sectors reviewed the requirements for the appointment of Chief Compliance Officers.”

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Business

#EndSARS: We were not hacked – CBN

The Central Bank of Nigeria has dismissed rumours that its website was hacked by hacker group, Anonymous.

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CRR Debits, #EndSARS: We were not hacked - CBN

The Central Bank of Nigeria (CBN) has debunked rumours that its website was hacked. This was disclosed via its official Twitter handle in the early hours of today.

Explore Data on the Nairametrics Research Website 

Explore Some Advanced Financial Calculators On Nairametrics

The apex bank assured the Nigerian public that there was no cause for alarm and it would do everything within its statutory power to protect its proprietary data from being breached.

READ: #EndSARS: National Human Rights Commission sets up independent investigative panel

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READ: $70 billion per annum will be needed to tackle pandemic induced poverty – World Bank

The press release concluded by advising the Nigerian public to ignore such false claims, designed at undermining the credibility of the CBN.

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Backstory

Nigerians were shocked yesterday when the website of the CBN was temporarily off the grid, leaving many to suspect that it may have been hacked. Recall that Anonymous, an international hackers group, had earlier claimed via its Twitter handle, that it breached some Nigerian government websites.

READ: CBN invests over N120 billion on 320,000 farmers across CTG within four years

The act is said to be in support of the ongoing #EndSARS protests that have taken over many cities in Nigeria, following calls for the disbandment of the notorious police unit – FSARS.

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Financial Services

Stanbic IBTC retains Fitch’s AAA Rating

Stanbic IBTC Holdings PLC and Stanbic IBTC Bank PLC were rated high based on the potential support from their parent company, Standard Bank Group.

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Stanbic IBTC

Globally renowned credit rating agency, Fitch Ratings, has reaffirmed that Stanbic IBTC Holdings PLC and its subsidiary, Stanbic IBTC Bank PLC, have retained their National Long-Term’ AAA (nga)’ and National Short-Term’ F1+(nga)’ ratings.

Fitch Ratings is a leading provider of credit ratings, commentary and research for global markets. The National Long-Term’ AAA (nga)’ and National Short-Term’ F1+(nga)’ Ratings are the highest possible ratings on Fitch’s rating scale.

Stanbic IBTC Holdings PLC and Stanbic IBTC Bank PLC were rated high based on the potential support from their parent company, Standard Bank Group, which is based in South Africa.

According to Fitch Ratings, both organisations retained their ratings as a result of the vital role they play in Standard Bank Group’s primary operations in West Africa as well as its size and high operational integration.

“The National Long-Term Ratings on Stanbic IBTC Bank’s N30 billion senior unsecured notes and the National Long- and Short-Term Ratings on the N150 billion structured note programme for senior unsecured debt are in line with the Bank’s issuer ratings,” Fitch says.

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Stanbic IBTC Holdings PLC is a subsidiary of the Standard Bank Group. Its principal operating entity is Stanbic IBTC Bank, a mid-tier commercial bank, which represented 96 per cent of the holding company’s consolidated assets at the end of 2019.

Both entities are highly integrated with Standard Bank Group’s risk-management framework with access to Standard Bank Group’s competitive advantages relative to peers. This also includes connectivity to its network and the ability to serve large domestic and multinational companies.

The ‘AAA (nga)’ is given to issuers with the lowest expectation of default risk when compared with their competitors. The National Short-Term Rating of ‘F1+(nga)’ is assigned to issuers that have the strongest capacity for timely payment of financial commitments in comparison to other issuers in Nigeria

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