By Omodele Adigun
Although, total deposits at the Central Bank of Nigeria (CBN) was down by 1.2 percent last May, the apex bank nevertheless recorded about N23.22 trillion deposits within two months.
Investigation by Daily Sun shows that total deposits held by CBN in April amounted to about N11.68 trillion before it declined to about N11.54 trillion in May, according to the apex bank’s current Economic Report.
The Report states that ‘total deposits at the Central Bank of Nigeria (CBN) declined by 1.2 per cent to N11,539.53 billion at end-May 2017, as a result of the fall in both Federal Government and banks deposits, which more than offset the increase in private sector deposit with the CBN. Of the total deposits at CBN, the shares of the Federal Government, banks and the private sector were 47.7, 31.2 and 21.1 per cent, respectively.’
The document adds that ‘Reserve money,’-which is currency in circulation plus banks’ deposits and other deposits- , ‘fell by 6.2 per cent on month-on-month basis to about N5.5 trillion at end of May, reflecting a significant decline in net domestic assets. The corresponding decline in CBNs liability resulted from the fall in both currency-in-circulation and total bank reserves.
Meanwhile, 11 deposit money banks (DMBs), also known as deposit-taking banks, deposited N2.34 trillion with CBN last year.
The top four tier-1 banks in the country deposited about N1.56 trillion with the CBN in 2016, 11 per cent over the N1.4 trillion deposited the previous year.
The banks are Zenith Bank Plc, United Bank for Africa Plc (UBA), FBN Holdings and Access Bank Plc.
Analysis showed that Zenith Bank’s mandatory deposit with CBN appreciated by 11 per cent from N403 billion to N447.5 billion in 2016 while UBAs notched up its to N321 billion from N276.7 billion in 2015.
The other two banks, FBN Holdings and Access Bank had deposits of N542 billion and N250.8 billion respectively with the apex bank during the period. FBN’s 2016 figure was 13.7 per cent higher than its mandatory deposit of N477 billion with the CBN in 2015, while Access Bank’s figure inched up by 0.4 per cent from its N249.96 billion kept with the CBN in 2015.
On the other hand, some tier-2 banks recorded mixed deposits with CBN in 2016.
These include Sterling Bank, Wema, FCMB Group Plc, Fidelity Bank, Diamond Bank, Unity Bank and Stanbic IBTC Holdings.
Sterling Bank’s reserve with CBN grew by 11.9 per cent to N94.48 billion as against N84.4 billion in 2015 while Wema Bank deposit dropped by 14.9 per cent to N48.16 billion from N56.6 billion in 20015.
FCMB Group and Fidelity Bank’s mandatory deposit with CBN appreciated by 11.1 per cent and 12.6 per cent to N139 billion and N170 billion in 2016 as against N125 billion and N151 billion in 2015 respectively.
Unity Bank mandatory deposit with CBN rose significantly by 171.4 per cent from N14.87 billion in 2015 to N40.37 billion in 2016.
However, Diamond Bank’s figure dropped by 0.8 per cent to N204 billion from N206 billion in 2015, while Stanbic IBTC Holdings mandatory deposit moved from N104 billion to N88.77 billion in 2016.
Just as the impact of the withdrawal of public sector funds through the Single Treasury Account (TSA) continued to hit the banks harder, the lenders had to take shelter under the Standing Facilities window of the CBN.
According to the Economic Report, this was to enable them square-up their positions either by borrowing from the CBN or depositing the excess in their reserves at the end of each business day.
The states: “The trend at the CBN standing facilities window showed more patronage at the standing lending facility (SLF) window, compared with the standing deposit facility window (SDF). The rates at the SLF and SDF remained at 16.00 and 9.00 per cent, respectively.
Total request for the standing lending facility granted during the reviewed month was N4.05 trillion, compared with N5.34 trillion in the preceding month. This was made up of N1.24 trillion direct SLF and N2.81 trillion intra-day lending facility (ILF) converted to overnight repo. Daily request ranged from N171.62 billion to N345.69 billion, resulting in daily average of N225.03 billion for the 18 transaction days. Total interest earned was N2.81 billion, compared with the total interest of N4.05 billion earned in the preceding month.
Total standing deposit facility granted during the review period was N467.33 billion with a daily average of N29.21 billion, compared with N369.45 billion in April 2017. The cost incurred on SDF was N0.16 billion in May 2017, compared with N0.12 billion in April 2017.”
Commenting on how the banks have been faring since losing the public sector funds to TSA, an economist, Mr Marcel Okeke, said the development has brought out creativity in banking.
Hear him: “The banking industry that got the shock, because the money was largely pulled out from the banks, have since been able to absorb the shock and have moved on. Of course, no bank collapsed because of TSA. And if anything, it has brought some creativity in banking, not only to survive, but to make the best out of the situation. In that regard, we take it as one of the positives of the TSA.
“And since the government appears to be moving on with wherever the money is kept and however the money is kept, I think that is alright. That is okay, as long as it makes good accounting, and government is able to see it, look into its pocket and see 100 per cent of how and where its money is coming from. That is good ,as long as the sector that got the greatest shock-the banking industry-was not stifled to death, so to speak.
The banks were able to quickly absorb the shock and become more creative and has since moved on.”