The total assets in the banking sector rose by N6.97tn between April 2020 and April 2021, according to the Central Bank of Nigeria.
Despite the effect of the COVID-19 pandemic, the assets rose from N46.2tn to N53.17tn between April 2020 and April 2021, figures obtained from the CBN’s Monetary Policy Committee’s report showed on Wednesday.
The report said, “The financial system continued to record strong growth with total asset increasing by N6.97tn from N46.2tn to N53.17tn between April 2020 and April 2021, driven mainly by increase in credit.
“Total credit increased by N2.84tn or 15.26 per cent between the end of April 2020 and end-April 2021, largely due to CBN’s Loan to Deposit Ratio policy and increased credit demand by businesses and households as economic activities picked up following the lifting of COVID-19 restrictions.”
The CBN said financial market conditions during the review period was subpar, with a bearish stock market, tepid liquidity in the money market, and lingering exchange market pressure.
It said weighted average inter-bank call and open buy-back rates rose from 1.8 per cent and 1.5 per cent, respectively, in March 2021 to 15.3 per cent and 14.6 per cent in April.
It said, “Comparably, at 3.5 per cent, annualised growth rate of broad money supply was below the 10.8 per cent recorded in December 2020 and reflected the 10.2 per cent annualised growth in net domestic asset below the 15.9 per cent at end-2020.
“Monetary condition was steered by the 32.0 per cent annualised expansion of private sector credit in the review month exceeding the 15.2 per cent recorded in 2020.”
The CBN said the observed growth in credit illustrated the continued potency of the bank’s LDR policy and targeted interventions.
It added that it underscored the need to sustain credit flows to the private sector, especially at this critical time when the economy needed to support its productive machinery.
The CBN emphasised the imperatives of enhanced credit flows to strategic high-impact private sector ventures through an effective collaboration of all stakeholders to strengthen economic fundamentals.
It also said it would continue to finetune liquidity conditions to minimise speculative activities that destabilised money and foreign exchange markets.
The CBN added that it would accentuate ongoing efforts to diversify the economy, enhance domestic productivity, and bolster aggregate demand through its interventions to critical private sector ventures and MSMEs.