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
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.
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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.
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%
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
GTB reacts to news on changes in management
GTB neither confirmed nor denied media reports but admitted it was engaging with regulators on the matter.
Nigeria’s largest bank by market capitalization, GT Bank has reacted to a Nairametrics report which revealed the bank’s succession plans in the wake of the retirement of Segun Agbaje as MD/CEO of the Bank.
In a press release signed by Company Secretary, Erhi Obebeduo, the bank neither confirmed nor denied the report but did admit it was engaging with regulators on the matter and will communicate such officially once it obtains regulatory approvals.
See excerpt below:
“The attention of Guaranty Trust Bank plc (the Bank) has been drawn to news circulating in the media about imminent changes on the Board and Management of the Bank.
As an organization listed on the Nigerian Exchange Limited and regulated by the Central Bank of Nigeria, there are processes that guide such Board changes and channels of communication of such changes as required by regulation.
The Board of the Bank has approved certain changes in its constitution and is presently engaging its primary regulator on same and would formally communicate upon the conclusion of all required regulatory engagements.”
Banks are not allowed to make such announcements public until they obtain the approval of their regulators. Such announcements are also routed via the Nigerian Stock Exchange before being made public.
Nairametrics had reported on Monday that the bank had approved a slew of management and board changes that pave the way for new leadership at one of Nigeria’s most respected bank.
See the full press release below:
