The banking system’s credit to the private sector, which is put at N21,424.95 billion, grew by 13.5 percent, quarter-on-quarter, in second quarter compared with the growth of 0.9 percent and 1.3 percent at end-June 2016, and the end of the corresponding period of 2015, according to the Central Bank of Nigeria (CBN).
The development was due to the growth in claims on the core private sector. Over the level at end-December 2015, banking system’s credit to the private sector grew by 14.5 percent compared with the growth of 0.9 percent and 4.3 percent recorded at the end of the preceding quarter and the corresponding period of 2015, respectively.
Relative to the level at the end of the preceding quarter, foreign assets (net) of the banking system rose by 2.8 percent to N7,105.7 billion at end-June 2016, in contrast to the decline of 1.8 percent at the end of the preceding quarter. The development was attributed, largely, to the increase in foreign asset holdings of the banks, following the adoption of a flexible exchange rate regime.
Over the level at end-December 2015, foreign assets (net) rose by 25.7 percent at end-June 2016, in contrast to the decline of 1.8 and 14.4 percent at the end of the preceding quarter and the corresponding period of 2015, respectively.
The CBN’s economic report for the second quarter of 2016 revealed that at N24,318.14 billion, aggregate domestic credit (net) to the economy, on quarter-on-quarter basis, grew by 7.3 percent compared with the growth of 4.9 percent and 3.8 percent at the end of the preceding quarter and the corresponding quarter of 2015, respectively.
The development, relative to the preceding quarter was attributed to the 13.5 percent growth in claims on the private sector. Over the level at end-December 2015, net domestic credit rose by 12.5 percent, compared with the growth of 4.9 per cent at the end of the preceding quarter. The development reflected the growth in claims on the private sector.
Banking system’s credit (net) to the Federal Government fell by 23.5 percent to N2,893.2 billion, in contrast to the growth of 30.7 and 26.5 percent at the end of the preceding quarter and the corresponding quarter of 2015, respectively. The development was due to the fall in banks’ holding of government securities. Relative to the level at end-December 2015, net claims on Federal Government rose marginally by N0.96 million (0.00003%) at the end of the review period, compared with the growth of 30.7 percent and 118.5 per cent at the end of the preceding quarter and the corresponding period of 2015, respectively.
Provisional data from the report indicated that growth in the key monetary aggregates accelerated at the end of the second quarter of 2016. On quarter-on-quarter basis, broad money supply (M2), at N21,684.97 billion, grew by 5.9 per cent, compared with the growth of 2.2 per cent at the end of the preceding quarter, but in contrast to the decline of 1.7 per cent at the end of the corresponding period of 2015.
The development reflected the 28.0 per cent, 7.3 per cent and 25.7 per cent increase in net foreign assets, domestic credit (net) and other assets (net) of the banking system, respectively. Over the level at end- December 2015, broad money supply (M2) grew by 8.3 per cent, compared with the growth of 2.2 per cent at the end of the preceding quarter. The development reflected the 25.7 and 12.5 per cent growth in foreign assets (net) and domestic credit (net) of the banking system.
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