Discount Houses total assets, liabilities rise by 40.1% in one month

Total assets and liabilities of the discount houses stood atN153.3 billion at end-April 2015, showing  an increase of 40.1 per cent above the  level  at  end-March 2015, the Central Bank of Nigeria (CBN) said in a report.

The development was accounted for, largely, by the 242.3 and 875.4 percent rise in claims on state government and other investments, respectively.

Correspondingly, the increase in  total  liabilities  was attributed  to  the 153.5 and 114.4 percent rise in “capital  and  reserves” and borrowings, respectively.

The CBN’s Economic Report for the month of April show that discount  houses’  investment  in  Federal  Government securities stood at N41.64 billion and accounted for 40.0 per cent of their total deposit liabilities.

Thus, investment in  Federal  Government  Securities  was 20.0 percentage points  below  the  prescribed  minimum  level  of  60.0  percent. At that level, discount houses’ investment on NTBs fell by 17.5 percent below the  level  at  the  end  of  the preceding  month.  Total  borrowing and  amount  owed by  the  discount  houses  was N52.3 billion,  while  their capital  and  reserves  amounted  to N33.91 billion.  This resulted in  a  gearing  ratio  of 1.5:1,  compared  with  the stipulated maximum target of 50:1 for fiscal 2015.

On the other hand, total assets and liabilities, of the deposit money banks amounted to N28,962.8 billion, showing  an  increase of 0.9 per cent over the level at the  end  of March 2015. Funds were sourced mainly from increased claims on the central government; time, savings and foreign currency deposits as well as central government deposits. The funds were used, largely, for accretion to reserves, acquisition of unclassified assets and reduction in foreign liabilities.

At N16,825.2 billion, banks’ credit   to   the   domestic economy declined by 2.6 percent below the  level in the preceding month. The development was attributed to the fall in claims on the federal government and the private sector during the review month.

Total  specified  liquid  assets  of  the commercial  banks stood  at N6,330.8 billion,  representing 34.8 per cent  of their  total  current  liabilities.  At  that  level,  the  liquidity ratio fell by 0.3 percentage point below the level in the preceding month,   but was 4.8 percentage points above  the  stipulated  minimum  ratio  of  30.0  per  cent.

The loans-to-deposit ratio, at 64.9 per cent, was 1.2 and 15.1 percentage points below the  levels at  the  end  of the  preceding month, and the  prescribed  maximum ratio of 80.0 per cent, respectively