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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.

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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Business News

Sterling Bank posts gains amid dip in GT Bank and Zenith

The NGX Banking Index saw another decline for the second time in the month of May.

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Top banks’ stocks plunge, as bears overwhelms Nigerian tier-2 banks’ rally, Financial Institutions generate N24.77 billion VAT in 2020, up by 44.4% Y-o-Y.

The NGX Banking Index saw another decline for the second time in the month of May. The index points dropped to 345.00 depicting a loss of -1.69%. Technical analysis shows that the bears dominated the trading session from start to finish. The NGX Banking Index saw 4 gains opposing 5 losses with 1 stalemate.

Sterling Bank’s performance was outstanding again today with a profit of +8.11% pushing the price upwards from its previous close of N1.53 to N1.60. Technical analysis shows that bullish momentum was maintained throughout the trading session. Access bank also posted a profit of +3.36% pushing the price upwards to N7.70 from N7.45 from its previous day’s close.

Jaiz bank posted a profit of +1.67% pushing the price upward from N0.60 to N0.61. Ecobank was also saved from the claws of the bears as it held profits of +0.97% pushing the price to N5.20. Technical analysis says that the price went up to meet selling pressure plunging it downwards. However, the fall was not sufficient as Ecobank still closed in profit.

Guarantee Trust BANK saw its shares crashing down as it took a -3.65% loss plunging the price downwards from N30.10 at the previous day’s close to N29.00. Technical analysis shows that there was a steady sell-off as the bearish trend was maintained with minimal interruptions.

Zenith Bank was the 2nd biggest loser as it saw its share price crash down by -3.18% pushing price downwards from N22.00 to N21.30. Technical analysis shows that consolidation was maintained almost throughout the trading session before breaking to the selling pressure at the end of the trading session.

Wema Bank saw a dip of -1.64% pushing the price from N0.61 to N0.60. Union bank also posted similar losses of -1.02% to settle the price at N4.85 from N4.90. Fidelity bank was not left out of the loss as it plunged -0.44% settling price at N2.24.

UBA held a stalemate, settling its price N7.20.

Outlook

  • Market sentiments trend bearish as 5 losses were held with 4 gains and 1 stalemate.
  • Nairametrics advises cautious participation amid growing uncertainties.

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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.

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Guaranty Trust Bank

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:

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