Bank customers deposit N21trn in three months

Depositors lodged N21 trillion into Nigerian banks in the first three months (Q1) of 2024, according to the Central Bank of Nigeria (CBN).

In 15 months to March 2024, total deposits stood at N136 trillion, driven by an increase in public confidence and trust.

However, total deposits in 2023 was N115 trillion.

Audited reports and regulatory filings reveal that both individuals and institutions are increasingly entrusting their funds to Nigerian banks. The total deposits in the banking sector rose by 63 percent from N70.5 trillion in 2022 to N115 trillion in 2023.

Big banks have reported substantial increases in their deposit bases. Zenith Bank’s deposits rose from N8.98 trillion in 2022 to N16.78 trillion in March 2024. FCMB Group saw its deposits increase from N2.07 trillion in 2022 to N3.7 trillion in Q1 of 2024. Newer institutions like Premium Trust Bank have also demonstrated significant growth, with deposits rising by 382 percent from N55 billion in December 2022 to N404 billion in March 2024.

Fidelity Bank’s deposits rose steadily from N2.58 trillion in 2022 to N4.02 trillion in 2023, closing the first quarter of 2024 at N4.71 trillion. United Bank for Africa (UBA) saw deposits grow from N10.86 trillion in 2022 to N14.9 trillion in 2023, reaching N18.4 trillion in March 2024.

Access Holdings had a significant jump from N11.3 trillion in 2022 to N19.8 trillion in 2023 and N24.7 trillion by March 2024. Sterling Holding Financial Company crossed the N2 trillion mark, reaching N2.15 trillion in Q1 of 2024 from N1.4 trillion and N1.8 trillion in 2022 and 2023, respectively. Guaranty Trust Holding Company (GTCO) doubled its deposits from N4.6 trillion in 2022 to N9.2 trillion in the first quarter of 2024.

This deposit growth reflects broad public confidence and participation in the banking sector. Banks have been able to manage costs effectively, recording substantial increases in low-cost deposits, which are crucial for maintaining liquidity and funding, analysts say.

According to the Federal Reserve Board (FRB), deposits are a primary funding source for most banks, significantly affecting a bank’s liquidity and enabling them to fund loans and investments. This growing deposit base underscores the dynamism and effectiveness of banks’ management and their growing contribution to the Nigerian economy.

The increase in deposits has also bolstered banks’ lending capacity. The CBN reports that loans and support to the private sector have risen by about N30 trillion over the past year. Credit to the private sector reached N74.31 trillion in May 2024, a 65.9 percent increase from N44.79 trillion in May 2023.

This growth in lending supports the national economic agenda and demonstrates the resilience of banks’ balance sheets. Additionally, banks’ profitability has seen significant growth, driven by business expansions and gains from foreign exchange revaluation, contributing more than N1 trillion in taxes to the government over the past two years.

The steady growth in deposits and lending underscores the strength and resilience of the Nigerian banking sector, reflecting a broader economic stability and public trust in the financial system.